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

Saturday, August 12, 2017

week ending Aug 12

The Fed’s economic ‘experiment’ isn’t over, KC Fed’s Esther George says -- The Federal Reserve’s frequent dissenter from Kansas City is on board with its “gradual” approach to unwinding trillions of dollars of economic stimulus — up to a point.Esther George, president of the Federal Reserve Bank of Kansas City, said Monday that she and other Fed policymakers need to stay on their intended path to ensure that inflation doesn’t have a chance to grab hold of the economy.“Inflation moves quickly,” George said after speaking to members of the Fairfax Industrial Association at the Kansas City Fed. “I don’t think you need to wait to see the whites of its eyes.” The Fed has set a schedule for unwinding much of the $4.5 trillion it holds in mostly long-term Treasury bonds and securities backed by home mortgages. It scooped them up in three rounds of quantitative easing, or QE, in an effort to boost a sluggish recovery from the Great Recession and financial crisis. Each purchase increased the reserves that banks held and presumably helped to lower or hold down long-term interest rates for prospective borrowers.“We saturated the economy with money that could be loaned out,” George said during her presentation. “You can’t leave it out there forever. It can create issues.”

Goldman Cuts Rate Hike Odds After 5th Consecutive Inflation Miss -- The Fed is becoming increasingly trapped: despite the FOMC's "best intentions" to telegraph that the economy is improving with the unemployment rate at a paltry 4.3% - because otherwise it clearly wouldn't be hiking, right - CPI has now missed consensus estimates for 5 consecutive months, and what worse, the biggest historical driver of inflation in recent years, shelter and rent inflation, appears to have peaked and is now declining. Worse, wage inflation is nowhere to be found, much as one would expect from a bartender and waiter-led "recovery."Of course, never one to miss a scapegoat, earlier today Dallas Fed president Robert Kaplan blamed the lack of inflation on technology, saying at an event in Texas that technological disruption is "a new and powerful structural factor that is influencing inflation" and finally noticing that "technology is increasingly replacing people in the jobs market" while "allowing consumers to change shopping habits, and is limiting the pricing power of businesses. That - in addition to global factors - has an impact on inflation."Predictably there was no discussion of how it is the Fed's trillions in excess liquidity that has allowed VCs to invest tens if not hundreds of billions in money-losing ventures, which have made this tech-driven deflation possible. And while the Fed ponders how to escape this trap it has created for itself, in which zombie companies refuse to die and where cash burning tech companies push inflation ever lower, at least until rates rise enough to crush the VC party once and for all, here is Goldman which moments ago once again cut its forecast for a rate hike possibility in 2017. The consumer price index rose 0.11% in July in both the headline and the core, missing expectations for the fifth consecutive month. The primary sources of weakness were lodging away from home and new vehicle prices, and we suspect the former will rebound in coming months. Nonetheless, we now estimate that the core PCE price index rose just 0.08% month-over-month in July, or 1.40% from a year earlier, down from +1.5% in June. Accordingly, we now place the subjective odds of a third hike this year at 55% (vs. 60% previously).

Who will be the next Fed chair? -- With Federal Reserve Board Chair Janet Yellen's term due to expire in February, speculation is rampant in D.C. about who might replace her -- or whether she will be replaced at all.  President Trump has been coy about whether he plans to renominate Fed Chair Janet Yellen, who first became chair in 2014 after serving as vice chair at the agency since 2010. In an interview with The Wall Street Journal in late July, Trump said he "liked her," referring to her as a "low interest-rate person." When pressed about whether she might be reappointed, Trump said, "She's in the running to stay." Despite the president's words, however, a reappointment is still considered unlikely. For starters, Yellen faces opposition among conservative Republicans, who want to see significant changes at the Fed. Trump has also been critical of Yellen in the past, accusing her of trying to help the Obama administration. It seems unlikely Trump would risk political blowback from his own party by reappointing Yellen.  (10 slides via Bloomberg)

Key Measures Show Inflation mostly below 2% in July -- The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.0% annualized rate) in July. The 16% trimmed-mean Consumer Price Index also rose 0.2% (1.8% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.1% (1.3% annualized rate) in July. The CPI less food and energy also rose 0.1% (1.4% annualized rate) on a seasonally adjusted basis.Note: The Cleveland Fed released the median CPI details for July here. Motor fuel declined 14% in July annualized.  This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.1%, the trimmed-mean CPI rose 1.9%, and the CPI less food and energy rose 1.7%. Core PCE is for June and increased 1.5% year-over-year.On a monthly basis, median CPI was at 2.0% annualized, trimmed-mean CPI was at 1.8% annualized, and core CPI was at 1.4% annualized. Using these measures, inflation was soft again in July.  Overall these measures are mostly below the Fed's 2% target  (Median CPI is slightly above).

Q2 2017 GDP Details on Residential and Commercial Real Estate - The BEA has released the underlying details for the Q2 advance GDP report. The BEA reported that investment in non-residential structures increased at a 5.2% annual pace in Q2.  This is a turnaround from early last year when non-residential investment declined due to less investment in petroleum exploration. Investment in petroleum and natural gas exploration increased substantially in Q2, from a $59 billion annual rate in Q4 2016 to a $97 billion annual rate in Q2 2017 - but is still down from a recent peak of $165 billion in Q4 2014. The first graph shows investment in offices, malls and lodging as a percent of GDP. Office, mall and lodging investment has increased a little recently, but from a very low level. Investment in offices increased in Q2, and is up 13% year-over-year - and is now almost as high as the housing bubble years as a percent of GDP. Investment in multimerchandise shopping structures (malls) peaked in 2007 and was up slightly year-over-year in Q2.   The vacancy rate for malls is still very high, so investment will probably stay low for some time. Lodging investment decreased in Q2, however lodging investment is up 8% year-over-year.  The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).

US Hitting On All Cylinders -- 3Q17 GDP Forecast Near 4% -- GDP Now -- August 6, 2017 -- Latest forecast: 3.7 percent — August 4, 2017 The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.7 percent on August 4, down from 4.0 percent on August 3. The forecasts of third-quarter real consumer spending growth and real fixed investment growth declined from 3.0 percent and 5.2 percent to 2.8 percent and 4.1 percent, respectively, after this morning's employment report from the U.S. Bureau of Labor Statistics.  The model's estimate of the dynamic factor for July—normalized to have mean 0 and standard deviation 1 and used to forecast yet-to-be released monthly GDP source data—decreased from 0.64 to 0.27 after the report.

Q3 GDP Forecasts --From the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.5 percent on August 9, down from 3.7 percent on August 4. From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 2.0% for 2017:Q3. The effects of news from this week’s data releases were small, leaving the nowcast broadly unchanged.From Merrill Lynch: 3Q GDP tracking remained unchanged on net at 2.8%. 2Q tracking was bumped up a tenth to 2.5%, owing to better wholesale inventories data.CR Note: Looks like real GDP growth will probably be in the 2s again in Q3.

 U.S. economic expansion to last another two years or more: Reuters poll (Reuters) - The U.S. economic expansion will last at least another two years, according to a majority of economists polled by Reuters who also forecast growth will not accelerate the way the Trump administration has predicted. The recovery from the devastating 2007-2009 financial crisis has been unusually lengthy. The latest growth stretch has already lasted 96 months, and if the poll predictions come true it would mark the longest economic expansion in more than 150 years. Growth has still not picked up as quickly as thought recently, leading forecasters to lower expectations again slightly in the poll of more than 100 economists taken Aug. 7-10. Still, the U.S. expansion has more than two years to go, according to 34 of 57 economists who answered an additional question on the business cycle. Of those economists, 21 said it would last two to three years and 13 said more than three years. "Expansions don't go on forever," said Sam Bullard, senior economist at Wells Fargo, who said there was another two to three years to go. "Steady, moderate growth looks like it could stay in place for a while." The remaining 23 respondents said the expansion would only last one to two years. None of the economists, based in the United States, Canada and Europe, expected it to end within a year. U.S. President Donald Trump's administration aims to boost annual growth to 3 percent, mainly through sweeping tax cuts. But with the failure to repeal and replace the Affordable Care Act, significant fiscal stimulus appears less likely and the economy has shown no signs of accelerating to meet that target.

AP EXPLAINS: Daunting budget deadlines loom for government — The Trump administration and Congress face a daunting set of budget-related deadlines in the coming weeks. Blowing them could upend global financial markets and cause a partial government shutdown.  The problem: The most important piece of business is the need to increase the United States' $19.9 trillion debt limit to permit the government to continue borrowing money to pay its bills, including Social Security and interest payments. The government hit its borrowing cap in March, but Treasury Secretary Steven Mnuchin has been using a well-worn set of accounting moves to free up cash. Nevertheless, Mnuchin says the debt ceiling needs to be raised by Sept. 29 to avert the risk of a first-ever U.S. default.What's next? Since Republicans control both Congress and the White House, it's their responsibility to ensure that the government doesn't default. In the past, that would have meant that Republicans would have to put up virtually all of the votes. During Democratic President Barack Obama's recent tenure, congressional Republicans surrendered to Obama's demand for a debt measure that was "clean" — no GOP provisions — provided Democrats produce almost all of the votes. Trump is demanding a clean debt bill, too, but tea party lawmakers and outside conservative groups are demanding spending cuts as the price for increasing the debt limit. Consequences of failure: It's never happened so nobody knows for sure, but financial experts warn that default on U.S. bond payments could roil financial markets. The government's credit rating would take a hit forcing it to pay higher interest rates. The government could likely "prioritize" payments to creditors — an option considered by some conservatives — but delays or failure to make other payments could have harsh, if unforeseen, consequences.

How Bad Will It Be If We Hit The Debt Ceiling? -- Paul Krugman - The odds of a self-inflicted US debt crisis now look pretty good: hard-line Republicans are eager to hold the economy hostage, Democrats are in no mood to make concessions, and Trump is both spiteful and ignorant. So it looks fairly likely that by October or so there will come a day when the U.S. government stops paying some of its bills, including interest on debt.How bad will that be? The truth is that we don’t know; but it may be helpful to talk about *why* we don’t know.Until now, US debt has played a special role in the world economy, because it is — or was — the ultimate safe asset, the thing people can use to secure transactions with no questions about it retaining its value. In a way, the dollar is to other moneys as money is to other assets, and US dollar debt is the form in which dollars are held with ultimate safety.Taking away that role could be very nasty.  Deprive them of dollar debts as safe assets, and terrible things could happen. The question then becomes whether an interruption in payments would really knock out the special role of U.S. debt.  Suppose that everyone expected normal payments to resume, with back interest, in a couple of weeks. In that case, even a slight discount on, say, Treasury bills would make them a very good investment — so speculators would basically step in and support the value of U.S. debt despite temporary default. In that case default might not be that big a deal. The big problem would come if investors see the default as more than a temporary glitch — if they see it as a sign of enduring, critical dysfunction in American governance. In that case they wouldn’t necessarily step in to buy our debt, and their confidence in the whole economic edifice would take a severe hit.

Goldman on the "Debt Limit" --A few brief excerpts from some analysis by Goldman Sachs economists: The Treasury projects that the debt limit will need to be raised by September 29, and we expect Congress to take at least that long to raise it... What happens if Congress does not raise it in time? Scheduled federal payments would be delayed and financial markets would be disrupted. The primary consequence of a failure to raise the debt limit before October 2 would be a likely failure to make some payments on that day or soon thereafter. This could include, for example, the main monthly payment to Social Security beneficiaries, which occurs on the 3rd of every month. All told, the decline in federal payments that would be necessary to avoid breaching the debt limit would be roughly equal to the budget deficit, resulting in a temporary fiscal contraction of 3-4% of GDP for the period the debt limit is binding. A sharp decline like this would likely be disruptive to financial markets and could have consequences for the real economy, which is why Congress has managed to avoid such an outcome in the past. CR note: I'll have much more on the "debt limit" as the deadline approaches. I've written about this nonsense before, from 2011: Unfortunately "debt ceiling" sounds virtuous, but it isn't - it is actually a question of "paying the bills". And here from 2014: There are certain politicians who think it is OK to not pay the bills as long as the U.S. makes interest and principal payments on the debt.  That is crazy talk.  There is a name for people who don't pay their bills: deadbeats.  If politicians don't pay their personal bills, they are deadbeats.  But if they stop the government from paying the bills, we are all deadbeats.  And there will be serious economic consequences for not paying the bills on time.  The consequences will build over time, but in a few months, not "paying the bills" will ripple through the entire economy.

Debt limit debate complicated by Fannie, Freddie dividend… — The debate over whether Fannie Mae and Freddie Mac should be allowed to keep some of their profits and rebuild capital is occurring against the backdrop of a larger, arguably more consequential battle over the U.S. debt limit.  Under the current arrangement with the Treasury Department, the government-sponsored enterprises give any profit to the U.S. government on a quarterly basis. But this quarter’s payment comes at a critical time if Congress is unable to raise the debt ceiling, raising the specter of a potential default by the U.S. for the first time in the country’s history.

US and Russia chief diplomats show ′readiness′ to talk despite escalating tensions - Russian Foreign Minister Lavrov and US Secretary of State Tillerson have met for lengthy talks amidst rising tensions between the two nations. Their meeting follows fresh US sanctions and Russia's US diplomat expulsion.Russian Foreign Minister Sergey Lavrov said on Sunday that despite tensions with Washington, he believed his US colleagues were prepared to keep communication lines open with Moscow. "We felt the readiness of our US colleagues to continue dialogue. I think there's no alternative to that," Lavrov told reporters after what he said was a lengthy meeting with US Secretary of State Rex Tillerson. Russian-German ventures to be hit by US sanctions Lavrov said his US counterpart asked him extensively about Russia's decision to expel US diplomats in retaliation for Washington's latest round of economic sanctions on Moscow. "He was primarily interested ... in details of those decisions that we grudgingly made in response to the law on anti-Russian sanctions," Lavrov said. He said he shared with Tillerson how Russia planned to carry out the expulsions but didn't provide details to reporters. Tillerson emerged from the meeting an hour after it started without taking questions or giving remarks to reporters.

Tillerson says U.S., Russia can settle problems, ease tension  (Reuters) - U.S. Secretary of State Rex Tillerson said on Monday he believes Washington and Russia can find a way to ease tensions, saying it wouldn't be useful to cut ties over the single issue of suspected Russian meddling in the U.S. election. Tillerson said Russia had also expressed some willingness to resume talks about the crisis in Ukraine, where a 2015 ceasefire between Kiev's forces and Russian-backed separatists in the eastern part of the country is regularly violated. "We should find places we can work together... In places we have differences we're going to have to continue to find ways to address those," Tillerson told reporters. Tillerson met his Russian counterpart, Sergei Lavrov, on the sidelines of an international gathering in Manila on Sunday, where he also asked about Moscow's retaliation against new U.S. sanctions. Tillerson said he told Lavrov the United States would respond to the Kremlin's order for it to cut about 60 percent of its diplomatic staff in Russia by September 1. "We have not made a decision on how we will respond to Russia's request to remove U.S. diplomatic personnel. I asked several clarifying questions...I told him we would respond by September first," Tillerson said. The meeting was their first since President Donald Trump reluctantly signed into law the sanctions that Russia said amounted to a full-scale trade war and ended hopes for better ties.

Diplomats Question Tactics of Tillerson, the Executive Turned Secretary of State — Several times a week the State Department sends a greeting to a foreign country on the occasion of its national day. By tradition, the salutations have been written by low-level diplomats and routinely approved by their superiors. But not anymore. Now the messages go through Secretary of State Rex W. Tillerson’s office, where his top assistants insist on vetting them, and where they often sit for weeks before coming back with extensive editing changes, according to several department officials. To these officials, it is a classic case of micromanagement — and emblematic of the way Mr. Tillerson has approached running the State Department. Introduced by President Trump as a “world-class player” when he nominated him, Mr. Tillerson had never worked in government. But as the chief executive of Exxon Mobil, he brought to the State Department the kind of managerial experience shared by predecessors like George P. Shultz, who had been president of Bechtel, the giant engineering company, and George Marshall, a five-star Army general once described by Winston Churchill as “the organizer of victory” in World War II. Even skeptics of Mr. Tillerson’s foreign policy credentials thought the State Department, an agency of 75,000 employees, could use some of the management skills he had picked up as the head of a major corporation. Mr. Tillerson was supposed to know that leaders of large organizations should quickly pick a trusted team, focus on big issues, delegate small ones and ask for help from staff members when needed. He has done none of those things, his critics contend. Instead, he has failed to nominate anyone to most of the department’s 38 highest-ranking jobs, leaving many critical departments without direction, while working with a few personal aides reviewing many of the ways the department has operated for decades rather than developing a coherent foreign policy.  “He has to delegate, and that’s what’s missing now.” 

 Trump Thanks Putin For Kicking Out 755 Diplomats: "We'll Save A Lot Of Money" -- In a statement that has been buried by the rest of Trump's barrage of soundbites today, including the ongoing back on forth verbal war on North Korea, as well as Mueller, Manafort and McConnell, during his second meeting with reporters at his golf complex in Bedminster, President Trump said something which could push his war with the intel community and the "deep state" into uncharted territory. In his first public comment on the recent decision by the Kremlin to seize two US compounds and kick out 755 US diplomats in retaliation for a similar move by Obama in December, Trump said "I want to thank" Russian President Vladimir Putin for ousting hundreds of US embassy employees "because we're trying to cut down our payroll." Trump: "I greatly appreciate the fact that they’ve been able to cut our payroll." (via ABC) pic.twitter.com/iR5JbHLHZj The president said the move would "cut payroll." And even as many have received the comments in jest, we are confident that hundreds of humorless spooks will use this as a green light to leak even more NSA intercepts. Trump has so far been quiet on the expulsion of US workers from Russia. "I greatly appreciate the fact that we've been able to cut our payroll of the United States," Trump said, adding "we're going to save a lot of money… there's no real reason for them to go back." Hardly a glowing endorsement of the US "intelligence" apparatus.

North Korea ready to teach U.S. 'severe lesson', says U.N. abused its authority | Reuters: - North Korea is ready to give the United States a "severe lesson" with its strategic nuclear force if it takes military action against it, and will not put its nuclear program or its missiles on the negotiating table, it said in a statement to a regional meeting on Monday. In a transcript of a statement by Foreign Minister Ri Yong-ho, which was distributed to media in Manila, Pyongyang called new U.N. sanctions "fabricated" and warned there would be "strong follow-up measures" and acts of justice. It said the resolution showed the United Nations had abused its authority. It said its intercontinental ballistic missile tests in July proved that the entire United States was in its firing range, and those missiles were a legitimate means of self-defense. It was not immediately clear whether the statement was read to the ASEAN Regional Forum on Monday. 

Let’s try and understand North Korea’s actions: it sees the world as its enemy -- North Korea continued flaunting its burgeoning weapons arsenal on Friday by firing off one of its sophisticated long range ballistic Hwasong-14 missiles. This missile landed in Japanese waters. By the end of the first term of Trump’s presidency, experts suggest, similar missiles could be capable of hitting Los Angeles and Washington with thermonuclear warheads. Late-night missile launched in Chagang province reportedly flew for about 1,000km and landed within Japan’s exclusive economic zoneThe test prompted the lastest Trump Twitter assault on China. “Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet … they do NOTHING for us with North Korea, just talk.When Kim Jong-Il, the father of the country’s current leader, was asked why he was spending his country’s scarce resources on ballistic missiles, he replied: “I have to let them know I have missiles because this is the only way the US will talk to me.” His son might put it differently: “It’s the only way the US will not attack us, and the only way they will not remove me from power.”The Kims have seen the recent history of Iraq and Libya and must surely glean the lesson: give up your nuclear weapons programme and your regime does not survive.I visited North Korea last year with the aim of understanding how people inside the country thought. Of course my experience was restricted. I was accompanied everywhere by minders who were loyal and obedient advocates of the regime. The people I spoke to all saw the outside world as threatening. Material conditions have improved for some, but psychologically many North Koreans are still victims of their history. They constantly referred to the past – the Korean War, the Japanese occupation, the end of Soviet aid and the looming power of the US. In the Korean war alone, 20% of the population was killed. When the bombing stopped in 1953, the US never declared a full armistice. In North Korean eyes, the Americans still retain the right to attack their country and they want a permanent peace treaty.

US "Confirms" N.Korea Has ICBM-Ready Nuclear Warheads - First thing this morning we reported that according to a 500-page report by the Japanese Defense Ministry, North Korea may now be in possession of a miniature nuclear warhead. That said, the report did not move the market because the Japanese report was largely inconclusive and did not claim with certainty that this is the case.Now, moments ago, the exact same narrative escalated when the WaPo echoed what Japan said, only it now "confirms" that North Korea has successfully produced a miniaturized nuclear warhead that can fit inside its missiles, "crossing a key threshold on the path to becoming a full-fledged nuclear power, U.S. intelligence officials have concluded in a confidential assessment."As the WaPo adds, the analysis completed last month by the Defense Intelligence Agency comes on the heels of another intelligence assessment that sharply raises the official estimate for the total number of bombs in the communist country’s atomic arsenal.“The IC [intelligence community] assesses North Korea has produced nuclear weapons for ballistic missile delivery, to include delivery by ICBM-class missiles,” the assessment states, in an excerpt read to The Washington Post. The assessment’s broad conclusions were verified by two U.S. officials familiar with the document. It is not yet known whether the reclusive regime has successfully tested the smaller design, although North Korean officially last year claimed to have done so.The U.S. calculated last month that up to 60 nuclear weapons are now controlled by North Korean leader Kim Jong Un. Some independent experts believe the number of bombs is much smaller. As Jeff Bezos' paper of record adds, the findings are likely to deepen concerns about an evolving North Korean military threat that appears to be advancing far more rapidly than many experts had predicted. The "conclusion" will also accelerate US plans, already in place, to intervene "preemptive" in North Korea, just as the neo-con/warhawks in Washington desire, once again binding Trump in the process.

Trump warns North Korea will be met with 'fire and fury' if threatens U.S. (Reuters) - U.S. President Donald Trump on Tuesday warned North Korea it would be met with "fire and fury" if it threatens the United States, ratcheting up the rhetoric with the nuclear-armed nation. Earlier Pyongyang said it was ready to give Washington a "severe lesson" with its strategic nuclear force in response to any U.S. military action. Washington has warned it is ready to use force if need be to stop North Korea's ballistic missile and nuclear programs but that it prefers global diplomatic action, including sanctions. The consequences of any U.S. strike would potentially be catastrophic not only for North Koreans but also South Korea, Japan and the thousands of U.S. military personnel within range of any North Korean retaliatory strikes. "North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen," Trump told reporters at the Trump National Golf Club in Bedminster, New Jersey. The U.N. Security Council unanimously imposed new sanctions on North Korea on Saturday over its continued missile tests, that could slash the reclusive country's $3 billion annual export revenue by a third. North Korea has made no secret of plans to develop a nuclear-tipped missile able to strike the United States and has ignored international calls to halt its nuclear and missile programs. It says its intercontinental ballistic missiles (ICBMs) are a legitimate means of defense against perceived U.S. hostility. It has long accused the United States and South Korea of escalating tensions by conducting military drills. 

Trump Threatens ‘Fire and Fury’ Against North Korea if It Endangers U.S — President Trump threatened on Tuesday to unleash “fire and fury” against North Korea if it endangered the United States, as tensions with the isolated and impoverished nuclear-armed state escalated into perhaps the most serious foreign policy challenge yet of his administration.In chilling language that evoked the horror of a nuclear exchange, Mr. Trump sought to deter North Korea from any actions that would put Americans at risk. But it was not clear what specifically would cross his line. Administration officials have said that a pre-emptive military strike, while a last resort, is among the options they have made available to the president.“North Korea best not make any more threats to the United States,” Mr. Trump told reporters at his golf club in Bedminster, N.J., where he is spending much of the month on a working vacation. “They will be met with fire and fury like the world has never seen.” Referring to North Korea’s volatile leader, Kim Jong-un, Mr. Trump said, “He has been very threatening beyond a normal state, and as I said, they will be met with fire and fury, and frankly power the likes of which this world has never seen before.” Undaunted, North Korea warned several hours later that it was considering a strike that would create “an enveloping fire” around Guam, the western Pacific island where the United States operates a critical Air Force base. In recent months, American strategic bombers from Guam’s Andersen Air Force Base have flown over the Korean Peninsula in a show of force. “Will only the U.S. have option called ‘preventive war’ as is claimed by it?” the Strategic Force of the North’s Korean People’s Army, or K.P.A., said in a statement. “It is a daydream for the U.S. to think that its mainland is an invulnerable Heavenly kingdom.” “The U.S. should clearly face up to the fact that the ballistic rockets of the Strategic Force of the K.P.A. are now on constant standby, facing the Pacific Ocean and pay deep attention to their azimuth angle for launch,” the statement said.

Cautious Congressional Response to Trump’s ‘Fire and Fury’ With North Korea - President Donald Trump’s warning of “fire and fury” in response to additional provocations by North Korea is not being received lightly by senior lawmakers.“North Korea best not make any more threats to the United States,” Trump said Tuesday at his golf club in Bedminster Township, N.J., according to the White House pool covering Trump. “They will be met with fire and fury like the world has never seen. He has been very threatening beyond a normal statement, and as I said they will be met with fire and fury and frankly power, the likes of which this world has never seen before.”Senate Armed Services Chairman John McCain thought the language might be ill-advised, particularly since carrying out a strike on North Korea could lead to significant destruction in South Korea.The Arizona Republican signaled he would prefer the “speak softly and carry a big stick” of President Theodore Roosevelt. “I take exception to the president’s comments because you’ve gotta be sure you can do what you say you can do,” McCain said.  “I don’t think that some of the great leaders that I have admired would have taken that same path,” McCain said. “I don’t know how you deal with North Korea. That’s the problem with what he had to say. If we meet with fire and fury, they still can launch those rockets from across the [Demilitarized Zone] and strike Seoul, and I’m telling you that the catastrophe of that would be incalculable.”

America no longer sees Kim Jong Un as a joke -- WASHINGTON Commentators laughed last year when a photograph emerged of Kim Jong Un standing next to an orb, which a North Korean newspaper stated was a miniaturized nuclear weapon. “That’s a weird looking disco ball,” joked one intelligence contractor on Twitter. Not many are laughing anymore. On Tuesday, the Washington Post reported that a U.S. intelligence assessment concluded North Korea has successfully produced a miniaturized nuclear warhead, a disclosure that rapidly intensified an already tense standoff with the rogue nation. Soon after the report, President Donald Trump warned Kim against making further threats, saying North Korea “will be met with the fire and the fury like the world has never seen.” Whether Kim truly possesses the ability to miniaturize a nuclear warhead — and successfully launch it on an intercontinental missile — is unknown and remains hotly debated. Yet there is no doubt now that Kim has scored one major achievement: He is finally being taken seriously by the foreign policy establishment and intelligence agencies, evidenced by the latest assessment on his nuclear capabilities. 

 Trump appears to grant China banks sanctions reprieve after U.N. deal | Reuters: (Reuters) - The Trump administration appears to be granting Chinese banks dealing with North Korea a temporary reprieve from threatened U.S. sanctions to give Beijing time to show it is serious about enforcing new U.N. steps against Pyongyang, U.S. officials said. The White House has also held off on much-anticipated trade action against China after Beijing backed U.N. Security Council sanctions passed on Saturday, although it is unclear how long President Donald Trump will delay this given domestic pressures to make good on campaign promises to crack down on unfair trade practices. Washington has made clear it is reluctant, for the moment, to take steps that would antagonize China when its cooperation is needed to tighten the screws on its ally and neighbor North Korea over its nuclear and missile programs. U.S. officials and U.N. diplomats say the threat of unilateral U.S. "secondary sanctions" against Chinese firms with North Korean ties and trade pressure from Washington helped persuade China to drop opposition to the new U.N. sanctions. "It played an important role to get China on board," one diplomat said, speaking on condition of anonymity.The 15 Security Council members voted unanimously on Saturday to impose the toughest U.N. sanctions yet on North Korea after it tested two intercontinental ballistic missiles (ICBMs) in July. The measures are designed to choke off a third of North Korea's $3 billion annual export revenue.  China, North Korea's main trading partner, has pledged to enforce the new sanctions but some critics are skeptical given what is widely seen as Beijing's lax policing of existing restrictions.

North Korea Says It Might Fire Missiles Into Waters Near GuamNorth Korea said Thursday that it was drawing up plans to launch four intermediate-range ballistic missiles into waters near Guam in the Western Pacific to teach President Trump a lesson, after the president warned of “fire and fury” against the North if it persisted in threatening the United States.If the North were to follow through on its threat to launch an “enveloping strike” in the vicinity of Guam, it would be the first time that a North Korean missile landed so close to an American territory. The North’s official Korean Central News Agency reported that, according to the plan, four of the country’s Hwasong-12 intermediate-range ballistic missiles would fly over the three southern Japanese prefectures of Shimane, Hiroshima and Koichi before hitting the ocean about 19 to 25 miles from the coast of Guam. In addition to serving as a warning to the United States, the proposed missile firings would also be a challenge to Japan. Some of the North Korean missiles launched in recent months have fallen in waters near Japan, but none of them have actually flown over the country. The North has said it launched its previous test missiles at highly lofted angles so that they would not fly over Japan.

A "Furious" North Korea Mocks Trump, Vows To Complete Plan To Nuke Guam --So much for Rex Tillerson's tepid attempt to de-escalate Trump's "fire and fury" statement. Moments ago, the state run-KCNA new agency issued a statement in which it cited a commander of the Korean People's Army according to whom President Donald Trump's threat was a "load of nonsense," failed to grasp "grave situation," and said that "sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him," referring to Trump’s comments about unleashing "fire and fury." Adding fuel to the fire, N. Korea said it is "seriously examining the plan for an enveloping strike at Guam through simultaneous fire of four Hwasong-12 intermediate-range strategic ballistic rockets in order to interdict the enemy forces on major military bases on Guam and to signal a crucial warning to the U.S." Noting that it is getting exhausted and angry with Trump's "load of nonsense", the General said that Trump's threats are "extremely getting on the nerves of the infuriated Hwasong artillerymen of the KPA." "The KPA Strategic Force will finally complete the plan until mid August and report it to the commander-in-chief of the DPRK nuclear force and wait for his order" and N. Korea will closely watch U.S. "speech and behavior." Turning the tables on Trump's statement that only harsh language can work on Kim Jong Un, N.Korea responded that "sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him." The North Korean statement also says the military action its army "is about to take" will be effective for restraining America's "frantic moves" in and near the southern part of the Korean Peninsula. Hinting that Pyongyang will continue planning an attack, the General adds that "the military action the KPA is about to take will be an effective remedy for restraining the frantic moves of the U.S. in the southern part of the Korean peninsula and its vicinity. "

Rex Tillerson just erased the reckless red line Trump drew on North Korea - WaPo - Secretary of State Rex Tillerson on Wednesday morning defended President Trump’s reckless threat to rain “fire and fury” on North Korea, but make no mistake: In the course of doing so, Tillerson quietly erased the red line that Trump laid down, and redrew it in a relatively more reasonable place.Tillerson’s comments will in this sense have a calming effect. But they are also cause for a different sort of alarm: They raise additional questions as to why Trump made the comments in the first place; what process went into the creation and delivery of them, if any; and what will — or won’t — be done to ensure that there is a sane process in place to shape further comments from Trump as this crisis unfolds. Tillerson, returning from Asia, defended Trump’s comments this way:“What the president is doing is sending a strong message to North Korea in language that Kim Jong Un would understand, because he doesn’t seem to understand diplomatic language … I think it was important that he deliver that message to avoid any miscalculation on their part.”  In this sense, Tillerson stood by Trump’s threat. But Tillerson also sought to reassure Americans by saying this: “I think what the president was just reaffirming is that the United States has the capability to fully defend itself from any attack, and our allies, and we will do so. So the American people should sleep well at night.” Trump, recall, said this Tuesday: “North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen.” Trump then once again alluded to Kim Jong Un’s threats, and reiterated that they “will be met with fire, fury and frankly power, the likes of which this world has never seen before.”In other words, Trump clearly stated — twice — that any further threats from North Korea would be met with a response that dwarfs any show of military power ever seen in human history, including, presumably, America’s dropping of nuclear bombs on Japan. Anything Trump does, or threatens to do, will be bigger and stronger than what came before it, including nuclear annihilation. But Tillerson backed off of that. He recast Trump’s comments to mean that we will respond to defend ourselves from any attack, not respond with force to any further threats. (Indeed, North Korea crossed the red line Trump drew only hours later.)

Trump Intensifies Warnings to North Korea on Missile Threat - President Donald Trump stepped up his campaign of pressure on North Korea, warning the regime not to follow through with a missile test near Guam and promising massive response to any strike against the U.S. or its allies.“They should be very nervous, because things will happen to them like they never thought possible, OK?” Trump told reporters Thursday in Bedminster, New Jersey. “He’s been pushing the world around for a long time,” referring to North Korean leader Kim Jong Un.Trump stood by his threat Aug. 8 to bring down “fire and fury” on North Korea, saying that the statement maybe “wasn’t tough enough.” He declined to rule out a preemptive strike on Pyongyang, saying, “We’ll see what happens.”Trump’s latest remarks reinforced the aggressive stance the U.S. president has taken in the confrontation with North Korea, despite efforts by Secretary of State Rex Tillerson to tamp down rhetoric. Trump held meetings on the situation during the day with Vice President Mike Pence, National Security Adviser H.R. McMaster and White House Chief of Staff John Kelly. The president’s warning continues days of escalating rhetorical exchanges between the U.S. and North Korea sparked, in part, by the Aug. 5 unanimous vote in the United Nations Security Council to impose new sanctions on the Kim regime. Trump indicated he expects China to do more. The standoff has rattled financial market worldwide. The S&P 500 Index lost 1.5 percent, the steepest slide since May 17, and the CBOE Volatility Index spiked 45 percent to 16.12, its highest closing price of Trump’s presidency. Gold, a haven asset, climbed 0.5 percent to $1,283.28 an ounce, the strongest in two months.

Trump Escalates War Of Words With N.Korea: "Things Will Happen To Them Like They Never Thought Possible"  --The verbal "war of words" ping-pong between Trump and North Korea notched up another level on Thursday afternoon, when instead of de-escalating growing US threats (which are now backed by the US air force ready to conduct a preemptive strike on N.Korean missile and nuclear facilities at a moment's notice) Trump told reporters in Bedminster, NJ that "if anything" his statement on "fire and fury" "was not tough enough,” in response to questions on North Korea's regime calling the U.S. leader’s warning “nonsense.”Trump said that if North Korea does anything to U.S. or its allies “they can be very, very nervous” and said that "It’s not acceptable" what North Korea has “been doing and what they’ve been getting away with.”He also said that the American people should feel “comfortable,” regarding N. Korean threats and added that "the people of our country are safe, our allies are safe.""We're backed 100% by our military, we're backed by everybody, and we're backed by many other leaders."Trump also took another shot at China, saying he thinks "China can and will do more on North Korea", although that appears unlikely after today's latest "provocation", in which a US ship sailed 12 miles away from one of China's artificial islands in the South China Sea.Today's punchline, however, was Trump threat to North Korea that “things will happen to them like they never thought possible” and concluded that "people of North Korea should be careful, or they’re going to be in trouble like they’ve never been before."And now we wait for the KCNA response.

North Korea Responds: Vows To "Mercilessly Wipe Out Provocateurs", Blasts "US Will Suffer Final Doom" - The ping pong war of words between Trump and Kim has continued for a third straight day.Earlier today, Trump said that "if anything" his statement on fire and fury  "was not tough enough, and proceeded to warn North Korea that "things will happen to them like they never thought possible" and concluded that "people of North Korea should be careful, or they’re going to be in trouble like they’ve never been before." At that moment the countdown to the KCNA-carried response by North Korea started, and we didn't have long to wait.Moments ago, North Korea's state-run KCNA news agency responded to the latest iteration of mutually-assured threats of destruction, blasting that it will "mercilessly wipe out the provocateurs making desperate attempts to stifle socialist country" and adds that "the U.S. will suffer a shameful defeat and final doom if it persists in extreme military adventure, sanctions and pressure."NEW: North Korea releases statement vowing to “mercilessly wipe out the provocateurs” and say the US would suffer “a shameful defeat"pic.twitter.com/pMgEOihMy9— The Situation Room (@CNNSitRoom) August 10, 2017  Developing, although readers can probably figure out where this goes from here.

Lockheed fielding more missile defense queries amid North Korea tests (Reuters) - Lockheed Martin Corp, the Pentagon's No. 1 weapons supplier, said on Tuesday its customers want to defend themselves against possible incoming missile attacks and are increasingly asking about missile defense systems. The greater interest comes amid a surge of North Korean long-range missile tests, unsettling its neighbors South Korea and Japan, as well as the United States. "The level of dialogue around missile defense is now at the prime minister and minister of defense level," Tim Cahill, the vice president of Lockheed's Air and Missile Defense business, told Reuters in an interview. U.S. President Donald Trump on Tuesday said: "North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen." Some countries are putting missile defense at the top of their list of desired capabilities, Cahill said. Interest has increased over the last 12 to 18 months, as have threats, he said. Shares of Lockheed are up nearly 8 percent, to $300.10, since North Korea's first long-range missile test on July 4. The stock is up 20 percent year-to-date. The increased demand could turn into sales over the coming years. The U.S. government sanctions weapons sales in a process that can take years and often requires the approval of U.S. legislators.

Trump: military solutions 'locked and loaded' against North Korea threat (Reuters) - U.S. President Donald Trump issued another warning to North Korea on Friday with a reference to American weapons as being "locked and loaded." "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely. Hopefully Kim Jong Un will find another path!" Trump wrote on Twitter, a day after his defense secretary said the United States was ready to counter any threat from Pyongyang.

China Warns Trump: "We Will Prevent A North Korea Regime Change" -- In a troubling repudiation of President Donald Trump’s demands that Beijing do more to rein in its bellicose neighbor, Beijing, through the state-owned media, cautioned the US president on Friday that it would intervene (militarily) on North Korea’s behalf if the US and South Korea launch a preemptive strike to “overthrow the North Korean regime,” according to a statement in the influential state-run newspaper Global Times. "If the U.S. and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so," it said. At the same time, the Chinese regime  made it clear that its preferred outcome would be a continuation of the status quo, warning Kim Jong Un that it would "remain neutral if North Korea were to strike first." The article, cited by Rueters,  reiterated calls for a diplomatic solution. However, the possibility of talks between the two sides was looking increasingly remote as both Trump and Kim continued to exchange threats of nuclear annihilation, with Trump clarifying Thursday that his earlier promise to respond with “fire and fury” should the North continue to threaten the US may not have gone far enough. China - North Korea's most important ally and trading partner -  has reiterated calls for calm during the current crisis. Beijing has expressed frustration with both Pyongyang's repeated nuclear and missile tests and with behavior from South Korea and the United States, such as military drills, that it sees as escalating tensions.

Trump Provokes China Again, Sends Another Destroyer To South China Sea -- A US Navy destroyer sailed within 12 miles of an artificial island built by China in the South China Sea on Thursday, a "provocation" that threatens another angry response from the Chinese government and further complicating President Donald Trump’s efforts to align the Communist Party in his pursuit to find a diplomatic resolution to the North Korean crisis.  As Reuters reports, the USS John McCain (yes, he the Senator has a ship named after him) passed by the Mischief Reef in the Spratly Islands in what US military officials justified as yet anoter “freedom of navigation” operation, the third since Trump took office. Over the past six months, the US has grown increasingly bold, or provocative as Beijing calls it, by sending aircraft and ships to contested waters in the South China Sea to the anger and frustration of Beijing. As is well-known, China has been engaged in a long-running dispute with its neighbors over its decision to build a network of artificial islands in the area. Last summer, the Philippines won a lawsuit filed in a UN court challenging China’s claim to ocean territory within a “nine-dash line.” However, China refuses to recognize the ruling.Meanwhile, the US military maintains that it’s within its rights to send military ships through the contested territory, adding that the dispute is “separate” from the US’s political considerations involving China. Here's Reuters with more:“The United States has criticized China's construction of islands and build-up of military facilities in the sea, and is concerned they could be used to restrict free nautical movement. The U.S. military has a long-standing position that its operations are carried out throughout the world, including in areas claimed by allies, and they are separate from political considerations.  The Trump administration has vowed to conduct more robust South China Sea operations.”

The Game Is Over and North Korea Has Won -- The Washington Post reported yesterday that North Korea has a large stockpile of compact nuclear weapons that can arm the country’s missiles, including its new intercontinental ballistic missiles that are capable of hitting the United States. That’s another way of saying: game over.Also: I told you so.There are really two assessments in the Post’s report. One, dated July 28, is that the intelligence community — not just the Defense Intelligence Agency, contrary to what you may have heard — “assesses North Korea has produced nuclear weapons for ballistic missile delivery, to include delivery by ICBM-class missiles.” The other assessment, published earlier in July, stated that North Korea had 60 nuclear weapons — higher than the estimates usually given in the press. Put them together, though, and its pretty clear that the window for denuclearizing North Korea, by diplomacy or by force, has closed. These judgments are front-page news, but only because we’ve been living in collective denial. Both intelligence assessments are consistent with what the North Koreans have been saying for some time, for reasons I outlined in a column here at Foreign Policy immediately after the September 2016 nuclear test titled, “North Korea’s Nuke Program Is Way More Sophisticated Than You Think: This is now a serious nuclear arsenal that threatens the region and, soon, the continental United States.”Authors rarely get to pick titles, and almost never like them, but I think the editors at FP got this one about right. It is about as subtle as a jackhammer, although even so the message didn’t seem to sink in. Let’s walk through the evidence.

North Korea’s “not quite” ICBM can’t hit the lower 48 states - Bulletin of the Atomic Scientists -- On July 3, 2017, a lone rocket rose from North Korea on a near-vertical trajectory. After five to six minutes of powered flight, the second stage of the missile shut down and coasted to an altitude of about 2,720 kilometers. It then fell back to Earth, reentering the atmosphere above the Sea of Japan some 900 kilometers to the east of where it had launched.  Within hours, the news of the launch was trumpeted by the US mainstream press: North Korea had flown an intercontinental ballistic missile (ICBM), a missile that could carry nuclear warheads to Anchorage, Alaska, and to the continental United States as well! But the Western press apparently did not know one crucial fact: The rocket carried a reduced payload and, therefore, was able to reach a much higher altitude than would have been possible if it had instead carried the weight associated with the type of first-generation atomic bomb North Korea might possess. Only three and a half weeks later, on July 28, there was a second launch of the same type of missile, this time at night, Korean time. The rocket flew approximately the same powered flight trajectory that it had on July 3 (or July 4 in North Korea), this time, however, reaching a higher altitude—a reported 3,725 kilometers. This longer flight path led to yet more unwarranted conclusions that the continental United States was now directly under threat of nuclear attack by North Korea. Actually, however, in this second case, by our calculations, the second stage of the so-called ICBM carried an even smaller payload and tumbled into the atmosphere at night over the Sea of Japan. From the point of view of North Korean political leadership, the general reaction to the July 4 and July 28 launches could not have been better. The world suddenly believed that the North Koreans had an ICBM that could reach the West Coast of the United States and beyond. But calculations we have made—based on detailed study of the type and size of the rocket motors used, the flight times of the stages of the rockets, the propellant likely used, and other technical factors—indicate that these rockets actually carried very small payloads that were nowhere near the weight of a nuclear warhead of the type North Korea could have, or could eventually have. These small payloads allowed the rockets to be lofted to far higher altitudes than they would have if loaded with a much-heavier warhead, creating the impression that North Korea was on the cusp of achieving ICBM capability.

The Madman With Nuclear Weapons is Donald Trump, Not Kim Jong-un - Donald Trump has a point. “We can’t let a madman with nuclear weapons let on the loose like that,” he told Philippines President Rodrigo Duterte, according to the transcript from their bizarre phone conversation that was leaked to The Intercept in May.  The madman the U.S. president was referring to, of course, was North Korean dictator Kim Jong-un. The madman the rest of us should be worried about, however, is Trump himself, who — lest we forget — has the sole, exclusive and unrestricted power to launch almost 1,000 nuclear warheads in a matter of minutes, should he so wish.  Most nonproliferation experts — as well as former President Jimmy Carter and a number of former Pentagon and State Department officials, both Republican and Democrat — agree that the brutal and murderous Kim, for all his bluster, is not irrational or suicidal, but bent on preserving his regime and preventing a U.S. attack. Nuclear weapons are a defensive, not an offensive, tool for the North Korean leadership — which, as Bill Clinton’s defense secretary William Perry observed on Fox News in April, may be “ruthless and … reckless” but “they are not crazy.” Got that? Kim is bad, not mad. The same cannot be said of The Donald. Think I’m being unfair? In February, a group of psychiatrists, psychologists and social workers wrote to the New York Times “that the grave emotional instability indicated by Mr. Trump’s speech and actions makes him incapable of serving safely as president.” In April, another group of mental health experts told a conference at Yale University’s School of Medicine that Trump was “paranoid” and “delusional” and referred to the president’s “dangerous mental illness.” Is it any wonder then that so many recent reports suggest that South Koreans are more worried about Trump than they are about the threat posed by their hostile and paranoid neighbor?

Trump White House weighs unprecedented plan to privatize much of the war in Afghanistan - The White House is actively considering a bold plan to turn over a big chunk of the U.S. war in Afghanistan to private contractors in an effort to turn the tide in a stalemated war, according to the former head of a security firm pushing the project. Under the proposal, 5,500 private contractors, primarily former Special Operations troops, would advise Afghan combat forces. The plan also includes a 90-plane private air force that would provide air support in the nearly 16-year-old war against Taliban insurgents, Erik Prince, founder of the Blackwater security firm, told USA TODAY. The unprecedented proposal comes as the U.S.-backed Afghan military faces a stalemate in the war and growing frustration by President Trump about the lack of progress in the war. The U.S. military has 8,400 U.S. troops there to train and guide local forces. They do not have a direct combat role, and presumably would be replaced gradually by the contractors. The plan remains under serious consideration within the White House despite misgivings by Trump's national security adviser, H.R. McMaster, an Army three-star general, and Defense Secretary Jim Mattis. Other White House officials, such as chief strategist Stephen Bannon, appear open to using private contractors. “At what point do you say a conventional military approach in Afghanistan is not working,” said Prince, a former Navy SEAL. “Maybe we say that at 16 years.” Blackwater, founded 1997, worked extensively in the wars in Iraq and Afghanistan. Prince sold the company in 2010. The White House did not respond to requests for comment. Prince said the plan will cost less than $10 billion a year, significantly lower than the more than $40 billion the Pentagon has budgeted this year.

US Preparing For Airstrikes Against ISIS In The Philippines -- Now that ISIS - the perpetual scapegoat for US intervention in the Syrian proxy war - is no longer viable, with the Qatar, Saudi-funded and Pentagon-equipped terrorist organization scattered and on the run, and there is no longer an imperative to remove Assad from power as the Qatar natgas pipeline to Europe is mothballed indefinitely while Russia and Iran are the de facto undisputed rulers of Syria, it is time to focus popular anger against ISIS elsewhere... like in the Philippines.  And not wasting any time, NBC reports that the Pentagon is considering a plan allowing the U.S. military to conduct airstrikes on ISIS in the Philippines. Unlike in Syria where the US arrived (and is now on its way out) to wage war against the Assad regime ISIS uninvited, the authority to strike ISIS targets as part of collective self-defense could be granted as part of an official military operation that may be named as early as Tuesday, said the anonymous officials who spoke to NBC. The strikes would likely be conducted by armed drones.If approved, the U.S. military would be able to conduct strikes against ISIS targets in the Philippines that could be a threat to allies in the region, which would include the Philippine forces battling ISIS on the ground in the country's southern islands.Since the U.S. military has been sharing intelligence with the Philippines for years, according to Pentagon spokesperson Capt. Jeff Davis, the US drones will have no problem orienting themselves.  "We have had a c onsistent CT [counterterror] presence in the Philippines for fifteen years now," he said. And, like in Syria, there is already a small U.S. military presence on the ground supporting the counter-ISIS fight, called Joint Special Operations Task Force Trident. We expect the presence will get bigger.

U.S. troops are on the ground in Yemen for offensive against al-Qaeda militants - A contingent of U.S. troops is involved in a Yemeni operation to push al-Qaeda militants from one of their key strongholds in central Yemen, the Pentagon said Friday. A small number of troops are there to help with “intelligence sharing,” Pentagon spokesman Capt. Jeff Davis said, though he did not rule out that more U.S. forces could be committed to the operation in the coming weeks. The announcement comes a day after the United Arab Emirates said in a statement that its forces, along with U.S. troops, were supporting the Yemeni military in the Shabwa governorate in a bid to oust al-Qaeda fighters entrenched there. The operation is just the latest U.S.-backed move against the terrorist group, known as al-Qaeda in the Arabian Peninsula, and signals the next phase of the invigorated U.S. counterterrorism campaign against the militants that began shortly after Donald Trump took office.  Since Feb. 28, the United States has conducted roughly 80 airstrikes against al-Qaeda militants in Yemen, Davis said, a number that remains little changed in past weeks. U.S. Special Operations forces have also been involved in a limited number of ground operations in the country, including one that ended in the death of a Navy SEAL in January.

Trump says he’s considering military response to Venezuela (AP) — President Donald Trump said Friday that he wouldn't rule out military action against Venezuela in response to the country's descent into political chaos following President Nicolas Maduro's power grab.Speaking to reporters at his Bedminster, New Jersey, golf club, Trump bemoaned the country's growing humanitarian crisis and declared that all options remain on the table — including a potential military intervention."We have many options for Venezuela and by the way, I'm not going to rule out a military option," Trump volunteered, adding, "A military operation and military option is certainly something that we could pursue."Trump's comment mark a serious escalation in rhetoric for the U.S., which has up until now stressed a regional approach that encourages Latin American allies to escalate pressure on the Maduro regime. Hours before Trump's comments, a senior administration official speaking on condition of anonymity stressed that approach while briefing reporters on Vice President Mike Pence's upcoming trip to the region later this week. Venezuela's defense minister called Trump's talk of a military intervention an act of "craziness" and "supreme extremism."

U.S. Troops Train in Eastern Europe to Echoes of the Cold War - NYT — After more than a decade spent fighting Islamic insurgents in Iraq and Afghanistan, the United States Army is scrambling to relearn Cold War-era skills to confront potential threats from Russia here in Eastern Europe, territory formerly defended by the Soviet Army. The adjustments to the new threats are wide ranging. Hundreds of desert-tan battle tanks and armored fighting vehicles must be repainted dark green to blend into European terrain. Soldiers accustomed to operating from large, secure bases in Iraq and Afghanistan must now practice using camouflage netting to disguise their positions and dispersing into smaller groups to avoid sophisticated surveillance drones that could direct rocket or missile attacks against personnel or command posts. American troops no longer have unfettered right of way in the air or priority access on the ground, as they did across Iraqi river valleys and Afghan mountain ranges. In today’s Europe, borders count in all matters military. On a recent Friday, an American Army supply convoy rushing ammunition from Germany to Romania was held up at the Austrian border until the next Monday by restrictions on military convoys during busy summer vacation travel periods. A 10-day exercise last month involving 25,000 American and allied forces spread across three former Warsaw Pact countries — Hungary, Romania and Bulgaria — offered a window into how a generation of senior Army commanders are rehearsing updated tactics and strategies once used to counter Soviet troops, tanks and artillery, including nighttime aerial assaults by hundreds of paratroopers. The commanders are training a younger force that has mainly faced shadowy terrorist foes in the Middle East and Southwest Asia since the attacks on Sept. 11, 2001.

US Is "The Greatest Threat To Peace In The World Today," New Poll Finds --It has happened again: yet another international poll finds that the US is viewed by peoples around the world to be the biggest threat to world peace.  On August 1st of 2017, Pew Research Center has issued results of their polling of 30 nations in which they had surveyed, first in 2013, and then again in 2017, posing a less-clear but similar question (vague perhaps because they were fearing a similar type of finding — embarrassing to their own country, the US), in which respondents had been asked«Do you think that the United States’ power and influence is a major threat, a minor threat, or not a threat to (survey country)?» and which also asked this same question but regarding «China,» and then again but regarding «Russia,» as a possible threat instead of «United States». (This wasn’t an open-ended question; only those three nations were named as possible responses.) On page 3 of their 32-page pdf is shown that the «major threat» category was selected by 35% of respondents worldwide for «US power and influence», 31% worldwide selected that for «Russia’s power and influence,» and also 31% worldwide said it for «China’s power and influence». However, on pages 23 and 24 of the pdf is shown the 30 countries that had been surveyed in this poll, in both 2013 and 2017, and most of these 30 nations were US allies; only Venezuela clearly was not. None of the 30 countries was an ally of either Russia or China (the other two countries offered as possibly being «a major threat»). And, yet, nonetheless, more respondents among the 30 sampled countries saw the US as «a major threat», than saw either Russia or China that way. Furthermore, the trend, in those 30 countries, throughout that four-year period, was generally in the direction of an increase in fear of the US — increase in fear of the country that had been overwhelmingly cited in 2013 by people in 65 countries in WIN/Gallup’s poll, as constituting, in 2013, «the greatest threat to peace in the world today».

We Have Been at War in Iraq for 27 Years - For the historical record: There was the initial build-up of Desert Shield, followed by Desert Storm and its lethal cloud of depleted uranium. There were the sanctions/bombing Clinton years when we blew up sewage treatment plants and denied children vaccines in an ongoing act of biological warfare. Then, there was the second Bush invasion based on unprosecuted criminal lies, the long massacre of occupation and torture, the Obama occupation and drone war, the drawdown, the draw-back-up because of ISIS. Now, there is the current trembling mayhem of air strikes, car bombs, militias, factions, confusion and an overwhelming ocean of refugees.  No one in politics or the media seems capable of recognizing this series of events for what it truly is: One large event with a tangible beginning, a middle and no end in sight. There is no dicing it up. It is all of a piece, one long war, the longest by miles in our nation's history. The most recent invasion and occupation saw nearly 5,000 US service members killed and close to 40,000 wounded. That casualty count does not include the many thousands of veterans who have returned home after multiple deployments suffering from a variety of maladies caused by prolonged exposure to chemicals, combat and carnage.

If America Was Trying To Start A World War, This Is How It Would Happen - Last Wednesday, U.S. President Donald Trump signed new sanctions into law against Russia, Iran, and North Korea. The legislation was supported so overwhelmingly in Congress that President Trump’s ability to veto the legislation was rendered completely ineffective.Even anti-interventionist Hawaii Rep. Tulsi Gabbard voted in favor of the bill, once again proving that Republicans and Democrats always find common ground when it comes to beating the drums of war against sovereign nations who have taken very little unwarranted hostile action — if any — towards the United States.But these are just sanctions, not acts of war, right? There’s nothing wrong with economically bullying other countries into submission over non-compliance with the current global order, right?  Not quite. Sanctions are always a prelude to war.  Though few are aware, the Japanese attack on Pearl Harbor in 1941 was arguably in response to America’s attempt to cripple Japan’s booming economy through embargos and asset freezes, ending Japan’s commercial relationship with the United States and provoking the desperation that led to their attack. In August 1990, the U.S. began a sanctions regime against Saddam Hussein in Iraq. In 1991, the United States invaded Iraq and completely decimated its armed forces, also directly targeting its civilian infrastructure. Following this devastation, the U.S. extended and expanded these economic sanctions on Iraq as further punishment. The U.N. estimated these sanctions led to the deaths of 1.7 million Iraqi civilians, including between 500,000 and 600,000 children.   Libya also faced American-imposed sanctions beginning in the 1990s, as well, and we all know how that story ended.  In May of 2004, the U.S. imposed economic sanctions on Syria, supposedly over Syria’s support for terrorism and its “failure to stop militants entering Iraq” – a country the U.S. destabilized in the first place. Iran has been battling with sanctions for some time now, with the anti-Iranian sanctions regime serving as a smokescreen for regime change in the same manner that Libya, Syria, and Iraq were targeted previously.

What’s Worse: Trump’s Campaign Agenda or Empowering Generals and CIA Operatives to Subvert it?  - Glenn Greenwald - Some of Trump’s advocated assaults on D.C. orthodoxy aligned with long-standing views of at least some left-wing factions (e.g., his professed opposition to regime change war in Syria, Iraq/Libya-style interventions, global free trade deals, entitlement cuts, greater conflict with Russia, and self-destructive pro-Israel fanaticism), while other Trump positions were horrifying to anyone with a plausible claim to leftism, or basic decency (reaffirming torture, expanding GITMO, killing terrorists’ families, launching Islamophobic crusades, fixation on increasing hostility with Tehran, further unleashing federal and local police forces). Ironically, Trump’s principal policy deviation around which elites have now coalesced in opposition – a desire for better relations with Moscow – was the same one that Obama, to their great bipartisan dismay, also adopted (as evidenced by Obama’s refusal to more aggressively confront the Kremlin-backed Syrian government or arm anti-Russian factions in Ukraine).It is true that Trump, being Trump, was wildly inconsistent in virtually all of these pronouncements, often contradicting or abandoning them weeks after he made them. And, as many of us pointed out at the time, it was foolish to assume that the campaign vows of any politician, let alone an adept con man like Trump, would be a reliable barometer for what he would do once in office. And, as expected, he has betrayed many of these promises within months of being inaugurated, while the very Wall Street interests he railed against have found a very welcoming embrace in the Oval Office. Nonetheless, Trump, as a matter of rhetoric, repeatedly affirmed policy positions that were directly contrary to long-standing bipartisan orthodoxy, and his policy and personal instability only compounded elites’ fears that he could not be relied upon to safeguard their lucrative, power-vesting agenda. In so many ways – due to his campaign positions, his outsider status, his unstable personality, his witting and unwitting unmasking of the truth of U.S. hegemony, the embarrassment he causes in western capitals, his reckless unpredictability – Trump posed a threat to their power centers.

Bannon "Increasingly Isolated" As Breitbart's War On McMaster Backfires - First it was Preibus, then Kushner and now General H.R. McMaster.  Breitbart has seemingly waged war on many of President Trump's closest advisors over the past several months but it seems that the only person they're actually hurting is their former Executive Chair, Steve Bannon.  As Politico notes this morning, whether true or not, every time Breitbart drops a negative article on the White House, all eyes turn to Bannon. “Fair or not, common sense would dictate that Steve Bannon has reach and influence and communication with these alt-right platforms whose editorial bent more often than not, aligns with Steve’s agenda,” said Kurt Bardella, a former Breitbart spokesperson. “I think [the stories] gave ammunition to his detractors internally, to either ID him or his people as part of the problem.”“The guy is desperately trying to lay low and keep his fights from spilling out into the public,” said one White House official. “Because he knows that he gets blamed.”A White House spokeswoman did not respond to a request for comment. Bannon declined to comment.A Wall Street Journal editorial earlier this week also accused Bannon of using Breitbart and other conservative media outlets to go after his ideological foes, questioning his loyalty to the president and placing blame for White House dysfunction squarely on his shoulders.Meanwhile, the attacks on McMaster have put Bannon in an especially awkward position with his new boss, retired Marine general John Kelly, who has been increasingly defensive of McMaster, a longtime friend and fellow general. According to Politco, McMaster, who pushed Bannon off the National Security Council principals’ committee, hasn’t spoken to Bannon in weeks.

Trump and the Leaked Transcripts - The American Conservative --The Washington Post published transcripts of Trump’s conversations with the Mexican president and Australian prime minister. I agree with critics that transcripts of confidential presidential calls with foreign leaders shouldn’t be leaked to the press, and I don’t think anything worthwhile was gained from their publication. For example, we see in the transcript of the call with Prime Minister Turnbull that Trump is 1) staggeringly ignorant on matters of policy; 2) stubbornly resistant to taking correction when someone explains the issue to him; 3) vehemently opposed to everything associated with Obama; 4) convinced that all deals agreed to before he took office are bad deals for the U.S. negotiated by stupid people; 5) completely out of his depth when representing the U.S. in dealings with other governments.   That tells us nothing about Trump that we didn’t already know from his public statements. All that the leaking of these conversations achieves is to make it harder for future presidents to speak in confidence with their foreign counterparts. We know from his foreign trips and public appearances that Trump disdains diplomacy and manages relations with close allies poorly, so we aren’t learning anything that we needed to know from these transcripts that we couldn’t find out another way. Publishing these transcripts was intended to embarrass Trump, and it has succeeded, but it has done so at a cost to future U.S. diplomacy that isn’t worth whatever brief satisfaction it may give the people responsible for it. Climate change has contributed to this transformation because public policy demands the low-carbon power like the dams produce.

Rare Earths Are China's Most Potent Weapon In A Trade War --In October 1973, the world shuddered when the Arab members of the Organization of Petroleum Exporting Countries imposed an oil embargo on the United States and other nations that provided military aid to Israel in the Yom Kippur war. At the same time, they ramped up prices.The United States realized it was dependent on imported oil — and much of that came from the Middle East, with Saudi Arabia the big swing producer. It shook the nation. How had a few foreign powers put a noose around the neck of the world’s largest economy?Well, it could happen again and very soon. The commodity that could bring us to our knees isn’t oil, but rather a group of elements known as rare earths, falling between 21 and 71 on the periodic table.This time, just one country is holding the noose: China.China controls the world’s production and distribution of rare earths. It produces more than 92 percent of them and holds the world in its hand when it comes to the future of almost anything in high technology.  Rare earths are great multipliers and the heaviest are the most valuable. They make the things we take for granted, from the small motors in automobiles to the wind turbines that are revolutionizing the production of electricity, many times more efficient. For example, rare earths increase a conventional magnet’s power by at least fivefold. They are the new oil. Rare earths are also at work in cell phones and computers. Fighter jets and smart weapons, like cruise missiles, rely on them. In national defense, there is no substitute and no other supply source available. At present, the rare earths threat from China is serious but not critical. If President Donald Trump — apparently encouraged by his trade adviser Peter Navarro, and his policy adviser Steve Bannon — is contemplating a trade war with China, rare earths are China’s most potent weapon. A trade war moves the rare earths threat from existential to immediate.

NAFTA’s ‘Broken Promises’: These Farmers Say They Got The Raw End Of Trade Deal - You’ve heard that American agriculture loves trade. And it’s easy to see why: Under NAFTA, American farmers have quadrupled their exports to Canada and Mexico and the two nations rank second and third, after China, as markets for U.S. farm goods.  But despite the largely pro-trade drumbeat in the ag sector, there are plenty of farmers who feel otherwise. From tomato growers in Florida to cattle ranchers in Montana, some farmers bruised by NAFTA think it has favored agribusiness over small-scale farms, lowered environmental standards and made it harder to compete against cheaper imports. Now that the White House is scheduled to revise the treaty in talks slated to start on Aug. 16, the question for many of these disgruntled farmers is whether Trump will remember them at the negotiating table. Free-trade proponents argue there are always winners and losers in globalization, but overall, gains outweigh losses. Farmers may see more competition, but consumers get lower food prices. That “everyone’s better off” argument, though, rang hollow among Rust Belt workers left behind in globalization — and in rural areas, even as farm exports took off. Their discontent – fed by Donald Trump’s promises to rip up NAFTA, calling it the “worst trade deal maybe ever signed anywhere” – helped land him in the White House.

Why Trump will win on taxes -- So what's up next? Tax "reform" — most likely meaning big cuts heavily skewed toward the very rich. And this time, chances are good that Republicans will get what they want. Why? Because nobody will be immediately and directly hurt by slashing tax rates for the rich. As David Dayen explains, Republicans have a choice to make regarding the arcana of Senate procedure. They only have 52 votes (which they already have trouble corralling), and so need either at least eight Democratic votes to overcome a filibuster, or to use "reconciliation" procedures to sidestep the requirement for a 60-vote supermajority and instead pass legislation with just 51 votes. If it's the latter route, Republicans will use a placeholder budget bill containing reconciliation instructions as a vehicle to later be filled in with budget-related material (subject to about a billion complicated rules). At the beginning of the 2017 session, Republicans set up reconciliation instructions that queued up a health-care vote. The idea was to bash that through, and then use the 2018 reconciliation to get to tax cuts. But with TrumpCare seemingly dead in the water, there's a lot of pressure to scrap the health-care push, pass the budget, and then queue up another round of reconciliation to get to taxes. At any rate, there are two ways to get tax reform. Either Republicans can try to build a bipartisan coalition around closing some loopholes but lowering rates (long the fetish object of Washington centrists), which would obviously sidestep the filibuster, or they can try a party-line vote with a fresh reconciliation bill — meaning huge tax cuts for the rich.  If they choose the second option, they'll have two enormous advantages. First, there will be a tidal wave of propaganda supporting the bill — especially from the corporate sector, which was mainly either neutral or opposed to TrumpCare. Business elites were none too excited about throwing tens of millions of people off their insurance, Second, there won't be nearly as much opposition. TrumpCare meant facing literal death for many people — it's part of why disability activists staged so many sit-ins in congressional offices around the country.

Why Tax Reform Is So Fiendishly Difficult ---  President Donald Trump has been talking about tax reform for months, but true to form, his administration is moving away from a specific proposal rather than toward one. And that’s fine with Democrats: They’ve just set conditions for cooperating on taxes that are as much about gaining political advantage as advancing the prospects of reform. What a shame. The U.S. tax system is such an atrocity of self-defeating complexity that it offers enormous scope for improving both fairness and efficiency -- an overhaul that should please liberals and conservatives alike. But to grasp this possibility, both parties need to start looking for ways to agree, not disagree.The key to this win-win opportunity is simplification. A needlessly complex code hurts businesses and economic growth, because it makes firms and households worry more about minimizing tax liabilities than maximizing economic gain. But it’s also unfair, because the rich and their advisers can game the system so much more effectively than ordinary taxpayers.The core of successful tax reform -- last achieved in the U.S. more than 30 years ago -- must be an effort to limit, and as much as possible eliminate, deductions and other preferences from personal and corporate taxes, while using the proceeds to lower tax rates.This basic strategy could address multiple defects in the current code: unintended spikes in tax rates due to small changes in income; vastly different tax rates paid by companies and households with similar incomes; the subsidy that flows from low-income renters to high-income homeowners with mortgages; the mountain of profits parked in low-tax jurisdictions abroad; the bias in favor of debt finance over equity finance; the carried-interest loophole; and on and on. The Republicans aren’t opposed to this approach -- they typically pay lip service to it -- but they seem completely incapable of producing a plan. Earlier this year they had one specific idea, to apply so-called border adjustment to corporate taxes, but their latest vapid declaration on taxes withdrew even that suggestion. So they’re back to zero actual proposals.

A taxing moment -- Jared Bernstein --I wrote a bit on what real tax reform would look like for yesterday’s WaPo, and the NYT editorial board followed up w/ a similar piece today. Both pieces make an important distinction between tax cuts and tax reform.The definition of the former is obvious, and in R’s hands, tends to be regressive cuts that hemorrhage much-needed revenues. Real reform, OTOH, avoids exacerbating market-driven income and wealth inequalities, while raising the revenues needed to meet the challenges we face.That last bit may sound esoteric, so let me give a very concrete e.g. of what I mean. According to CBO, demographic and others pressures are such (see my piece) that by 2027 it will take 2.5 percentage points more of GDP to meet our obligations to Soc Sec and public health care programs. We either raise that in revenues, cut spending elsewhere, cut benefits, or put it on the debt (adding “or we grow at some unrealistic growth rate” not allowed).The NYT piece is very up front about raising revenues and suggests lots of great ways to do so, including a link to my old financial transactions tax oped. I still like that idea and do not understand why an FTT generates so little buzz among progressives.In fact, some on the left, or at least center-left, argue that the NYT approach to tax reform is misguided. To lead with your chin like that–to explicitly lean into revenue raisers–in the hurly-burly of the debate just reduces to “R’s want to cut taxes; D’s want to raise them; you choose.” D’s can counter that they just want to raise taxes on the rich, sometimes adding that they want to cut middle-class taxes. Here’s my take on that:

Republicans Discuss a Mix of Temporary, Permanent Tax Cuts -- Republicans struggling to pass a major tax overhaul that doesn’t add to the federal deficit are discussing a kind of compromise: mixing permanent revisions with temporary rate cuts for individuals and businesses.  Officials on the House and Senate tax committees are talking with the White House about a hybrid approach that would combine lasting tax code changes to deter offshore profit shifting by corporations with lower rates for a number of years, according to three people familiar with the discussions. Mixing and matching proposals -- making some permanent and others temporary --- could be a potential workaround for GOP leaders who want to use a budgetary process known as reconciliation to prevent Senate Democrats from blocking tax legislation. That course limits the scope of the overall bill because it requires that any tax changes that add to the nation’s long-term deficit would have to expire.  The combined approach has emerged as administration and congressional staff evaluate the effects of various proposals, said the people, who described it on the condition of anonymity. “It’s the best of both worlds,” said Daniel Clifton, a former tax lobbyist who was involved in the tax-cut negotiations under former President George W. Bush in 2001. “But if you’re a purist for tax cuts or a purist for tax reform, it’s going to be neither.” Critics caution that temporary changes won’t spur the level of economic growth that President Donald Trump and congressional leaders have targeted.

GOP and Democrats Push Trump on Tax Reform -- Yves here. In this Real News Network interview, Bill Black describes how the tax reform plans, such as they are, for both parties are lousy, although the Republicans’ by design is much lousier for the non-rich. And a point not often included in these discussions is that spending in the US is regressive while it is progressive in other advanced economies.  The rush transcript had typos, mainly the absence of apostrophes. I cleaned some but not all of that up.

Trump Aides Copy Bush ‘Red Team’ Strategy in Tax Fight -- The White House is reaching back to the Bush administration for a strategy to get a tax code overhaul passed, as President Donald Trump’s advisers try to avoid the missteps that doomed the effort to repeal Obamacare. To take on a task that hasn’t been accomplished in Washington in three decades, senior aides are adopting a tightly orchestrated process and walking away from the improvisational approach that’s been the Trump administration’s hallmark. The centerpiece is a weekly, all-hands-on-deck meeting to coordinate the campaign by the president and his allies to win passage of sweeping changes to individual and corporate tax laws, according to four White House officials, who asked for anonymity to discuss internal plans. The regular Wednesday meetings, usually held around a long wooden table in the Roosevelt Room steps away from the Oval Office, include representatives of major power centers within the administration: the Office of American Innovation, led by Trump son-in-law Jared Kushner, the Treasury Department, headed by Secretary Steven Mnuchin, Vice President Mike Pence’s staff and Gary Cohn’s National Economic Council. Inside the White House, the assemblage is known as “The Red Team,” a term used in former President George W. Bush’s administration for similar groups organized for major fights. It’s taken from military and corporate parlance for a team that explicitly tests strategy from an opponent’s perspective. But the Trump team is using the label more broadly to convey a sense of urgency and close coordination, the administration officials said. White House officials acknowledge a major failure in the health care fight was getting outflanked by Democrats in organizing the public and activists. 

IRS Reports 40% Surge In People Underpaying Their Tax Bills - Paying taxes is just about as much fun as a root canal.  As such, apparently more and more people are just deciding not to do it.  As the Wall Street Journal points out today, the IRS saw a 40% surge in returns that owe tax penalties between 2010 and 2015. For reasons that aren’t clear, a growing number of people who pay taxes quarterly are getting their payments wrong and incurring penalties as a result. These taxpayers often owe estimated taxes because they have income that’s not subject to the same withholding as wages earned by employees. According to Internal Revenue Service data, the number of filers penalized for underpaying estimated taxes rose nearly 40% between 2010 and 2015—to 10 million from 7.2 million. In 2015, the total number of filers owing penalties may have exceeded the number filing estimated taxes, although final results aren’t out yet. This is possible because some who paid quarterly taxes may have made mistakes, and others who didn’t pay them should have. “The data suggest that millions of people don’t understand they need to pay quarterly taxes, or at least increase their withholding to avoid penalties,” says Eric Smith, an IRS spokesman.

These frightening new survey results describe a Congress in crisis - In the past few weeks, members of Congress have once again engaged in the time-honored practice of lambasting Congress for failing the American people. Most prominently, John McCain’s widely discussed Senate speech before the health care vote was a blistering indictment of the chamber’s current partisan practices, with a familiar call for more “regular order.” Less prominently, Sen. James Lankford (R-OK) also complained in a Wall Street Journal op-ed that “the Senate isn’t working.” And former House members Cliff Stearns (R-FL) and Martin Frost (D-TX) echoed McCain’s call in an op-ed in the Hill, writing, “In the myriad changes made to Congress, one stands out: abandoning regular order and the committee system as an integral mechanism to craft legislation.” All of these calls, and many others like them, lament that Congress has become a substance-free partisan arena, in which members don’t take time to learn about policy and deliberate — in contrast to an idealized “regular order” process.Partisanship is the most obvious problem.  But a second, equally important problem is capacity. Even if members truly want to translate their current pique at institutional dysfunction into genuine deliberation, into a process of “regular order” where committees develop legislation, where would they begin? They’d need to build back a whole lot of lost capacity.Consider some responses from a new survey of senior staff from the Congressional Management Foundation (CMF) titled “State of the Congress: Staff Perspectives on Institutional Capacity in the House and the Senate.” Below are the percentages of senior staff who said they were “very satisfied” with their chamber’s performance in the following benchmarks:

  • “The chamber’s human resource support and infrastructure is adequate to support staffers’ official duties (e.g., training, professional development, benefits, etc.)”: 5%
  • “Members have adequate time and resources to understand, consider, and deliberate policy and legislation”: 6%
  • “The technological infrastructure is adequate to support Members’ official duties”: 6%

“The chamber has adequate capacity and support (staff, research, capability, infrastructure, etc.) to perform its role in democracy”: 11%

Infrastructure borrowing drops as U.S. states await Trump plan details  (Reuters) - President Donald Trump arrived in office having promised a bold $1 trillion infrastructure investment plan over 10 years for roads, bridges, airports and transit systems crumbling by the day across the United States. But nearly seven months later the administration has produced few details on the future of federal infrastructure funding, one reason why state and municipal governments have issued fewer bonds to improve roads, water systems and other projects so far in 2017. An early budget by Republican Trump even proposed stripping popular transportation funding programs. Through July, new municipal deals to fund transportation, utilities and power projects totaled $50.7 billion, down 19.4 percent from the same period last year, according to an analysis of Thomson Reuters data. That decline outpaces a broader drop in the U.S. municipal bond market overall, with total issuance down 13.1 percent thus far in 2017 to $201.7 billion. New deals have lagged since November's post-election selloff, when state and local governments quickly issued bonds fearing potential policy changes and rate increases by the Federal Reserve. Since then, the lower issuance has been driven by plummeting refunding volumes. Such refinancings dominated last year's higher issuance levels, but the states and cities that sell such bonds were put off by the overall rise in rates. "I think people started to realize that the agenda within the Trump administration wasn't going to accelerate as quickly as had been advertised,"

 If Pence Shapes Trump’s Infrastructure Plan, Who Would Profit? Who Would Pay? - President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in its size and ambition, but it promotes a controversial model championed by Vice President Mike Pence in his home state of Indiana. The Hoosier flavor is hardly surprising: After his gubernatorial experience with road privatization, Pence has been a public face of the White House initiative, and executives from financial firms that helped privatize Indiana’s roads are now the Trump administration officials sculpting the details of the national plan. As that federal proposal now moves forward, Indiana’s experience with infrastructure privatization has become a political Rorschach test. Pence and his allies are extolling Indiana’s record selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor.   But opponents of privatization have depicted Indiana as a heartland cautionary tale of get-rich-quick scheming and secrecy that led the state to sell off valuable public assets, which were then wildly mismanaged. To them, the Indiana story reveals the ideological zealotry of a politician who is now a driving force behind an infrastructure program that could radically reshape local economies and commerce in communities across the country, and for generations to come. Pence believes in “this religion — the magic and mystery of markets is solving all the problems,” said Shaw Friedman, who represented Northwest Indiana counties’ unsuccessful efforts to press the Pence administration to let public entities reclaim the Indiana Toll Road when its private operator went bankrupt. “They allowed a philosophical aversion to the public sector bid." Public-private partnerships (P3s) involve private companies investing in, constructing and/or maintaining public assets such as roads, bridges and airports — in exchange for those companies pocketing tolls, fees or other public revenues generated by the assets. The number of P3s underway in the decade after 2000 more than tripled in comparison to the previous 10-year period, according to a newsletter from Public Works Financing, which compiles a database on P3 projects.

Aetna CEO: Obamacare ‘cannot be repealed, period‘ - CNBC -- Congress needs to move on from repealing the Affordable Care Act, says Aetna CEO Mark Bertolini. "The ACA cannot be repealed, period, end of sentence," Bertolini told CNBC's "Closing Bell" on Thursday. "What we should do is fix it. So either everyone gets their heads together over in the Senate and the House and does the job that the American people needs them to do, and fix what we already have, or they should move on to something else," he said. "It's really easy to fix this if they would just get over the politics of who is going to win the '18 election." For Aetna to rejoin the Obamacare markets, Bertolini says, the system needs to become more stabilized. "Any business that has the kind of changes this program has seen quarter over quarter, sometimes monthly, would not be able to sustain their business practices for any period of time," Bertolini said. "So when they get it right — which, it can be fixed, it very much can be fixed — and it's stable, we'll reconsider participation." Late in July, President Donald Trump tweeted that if a new health-care bill failed to pass, "bailouts" — referring to the payments the government needs to make to prevent premiums rising even more next year — for insurance companies could end very soon. However, Bertolini challenged what Trump called "bailouts." "They aren't bailouts," Bertolini said. "We don't keep that money. It goes directly to providers and directly to pay for premiums for members, so I think it's misinformed." "Our premiums are the same regardless, and it's the costs that need to be paid to hospitals and doctors that otherwise wouldn't be paid," he said. "[The] only people who get hurt are the members and the citizens of the United States who won't get health care as a result, so these aren't bailouts for the insurance company." 

What Could Happen If The Administration Stops Cost-Sharing Reduction Payments To Insurers? - First, insurers would have to decide whether to continue to participate in the exchanges. Those in the FFE have a contractual right to drop participation for the rest of 2017, but how exactly they would do this would depend on state law, and would probably require 90 days notice. Insurers would also not be able to terminate the policies of individuals covered through the exchange, although once the insurers left the exchange premium tax credits would cease and many policyholders would drop coverage. Insurers that tried to leave immediately would likely suffer reputational damage, and those that could financially would likely try to hold on until the end of the year. Some insurers might well decide that the government is an unreliable partner and give up on the exchanges for 2018. Indeed, some would conclude that the individual market is too risky to play in at all. The individual market makes up a small part of the business of large insurers; even though it has become more profitable in the recent past, some insurers might conclude that the premium increases that would be needed to make up for the loss of the CSRs would drive healthy enrollees out of the individual market. Rather than deal with a deteriorating risk pool, they might leave the individual market entirely (although they would probably have to give 180 days notice to do so.) Insurers that decide to stay would have to charge rates that would allow them to survive without the $10 billion dollars the CSR payments would provide. They would need to raise premiums significantly to accomplish this. How they did so would depend on guidance that they got from their state department of insurance or possibly from the Centers for Medicare and Medicaid Services.

Nurses: Paul Krugman Gives ‘Shallow Political Advice’ On Health Care Reform - Michael Lighty, Director of Public Policy at National Nurses United - With the explosive growth of the movement for single payer healthcare, it should not be a surprise to see the Empire Strikes Back. In the name of political reality, some liberal pundits, politicians and policy wonks are scolding progressives to give up on Medicare for All. There are many ways to achieve “universal coverage,” we’re told.  “Overhauling” the entire system is too hard, healthcare is too big a part of the economy, and politicians will not take out the health insurance companies. Yet, the alternative approaches to reform pose the same political problems: the insurance industry is likely to fight the elimination of their profits (Dutch and German health insurers, for example, are non-profit), and the severe reductions in executive compensation, elimination of shareholder dividends, and rate setting, all of which go away under European-style health insurance.  The benefits and rates are government mandated, the companies are essentially payment administrators. Either this regulated system of private health plans lowers prices through government –set rates and negotiations, or it fails to do so and costs shift to individuals.  But it is still the government role as rate setter/price negotiator that matters. Wouldn’t it be more straightforward and simpler to improve and expand Medicare? Progressives are badly served by shallow political advice from the likes of Paul Krugman. It obscures the reality working people actually face and undermines the fight for our values and program. Our health is not a commodity, it doesn’t belong in the “market,” it is a human right. Those who advise us to settle for models of national health systems in other countries are missing the fundamental difference from the broken U.S. scheme. What Australia, the Netherlands and Switzerland all have in common is they do not conflate “coverage” with healthcare. Those countries guarantee healthcare.

 Trump attacks Mitch McConnell for second day over Senate health policy failure (Reuters) - President Donald Trump attacked his own party's Senate majority leader, Mitch McConnell, for a second day on Thursday, complaining from the steps of his private New Jersey golf club about Republicans' failure to repeal and replace Obamacare. "I just want him to get repeal and replace done. I've been hearing repeal and replace now for seven years ... Mitch, get to work and let's get it done," Trump told reporters at a briefing on his vacation. In the aftermath of last month's collapse in the Senate of a years-long Republican campaign to gut the 2010 Affordable Care Act, commonly called Obamacare, Trump has berated McConnell and other Republican senators, urging them to return to the divisive issue of reforming the U.S. healthcare insurance system. Many senators, including McConnell, have been making the case that it is time to move on to other policies, such as tax reform and improving infrastructure. Asked at the briefing in Bedminster, New Jersey, if McConnell should consider stepping down as Senate Republican leader, Trump said: "If he doesn't get repeal and replace done, and he doesn't get taxes done ... and if he doesn't get a very easy one to get done - infrastructure - if he doesn't get them done, then you can ask me that question." 

Why on Earth Is Trump Attacking Nation's Nursing Home Population? - "Why does Trump hate grandmothers?" So asked Rep. Ted Lieu (D-Calif.) on Sunday as he decried a proposal from the administration that would prevent abused or mistreated seniors in nursing homes from getting their day in court, jeopardizing their health and safety. Lieu's concern and outrage over the effort is shared with fellow lawmakers as well as patient and consumer advocacy groups like Public Citizen, who said the effort to roll back protections from some of society's most vulnerable people is just part of "a disturbing trend of the Trump administration attempting to reverse critical protections against forced arbitration," which prevents individuals or groups of people from filing lawsuits or seeking damages for fraud, abuse, neglect, medical malpractice and other forms of wrongdoing. As Jason P. Steed, an appellate lawyer, kindly translated on Twitter: "Translation: Trump Admin making it easier for nursing homes to abuse elderly and not be held accountable for it."With Monday the last day for the public to weigh in on the Centers for Medicare and Medicaid Services (CMS) proposal to ditch an Obama-era rule prohibiting use of forced arbitration "ripoff clauses" in nursing home admission agreements, lawmakers and advocacy groups are trying to draw attention to the effort and also filing official objections to the rule with the agency. "Almost everyone will admit a loved one into a nursing home or long-term care facility," said Remington A. Gregg, counsel for civil justice and consumer rights in Public Citizen's Congress Watch division, who authored the group's objections. "This life-changing and often heart-breaking experience is made even worse when being forced to sign away your right to go to court if you are the victim of neglect or abuse. CMS should be doing all that it can to protect and honor our seniors rather than eliminating critical protections for their well-being."

Trump Hands McConnell a Daunting To-Do List to Regain His Favor - President Donald Trump laid out a path for Senate Majority Leader Mitch McConnell to get back in his good graces: replace Obamacare, overhaul the U.S. tax code and find a way to pay for big infrastructure improvements.Yet clearing Trump’s agenda anytime soon is close to impossible in the narrowly controlled Republican Senate that already has a packed agenda of must-pass legislation.Trump’s direction for McConnell came after he assailed the Senate Republican leader for two days on Twitter over the Senate’s failure to replace the Affordable Care Act. When asked by a reporter whether McConnell should step down, Trump said Thursday he would withhold judgment. “If he doesn’t get repeal and replace done,” along with taxes and infrastructure, Trump said, “then you can ask me that question.” Trump amplified his criticism Friday, saying McConnell “should have had health care approved” and that the Republican leader should have been more aggressive corralling votes from GOP senators: “Take away a committee chairmanship or do whatever you have to do.”Earlier Friday, Trump retweeted a Fox News story depicting his comments as a “warning shot” to the Republican leader. In another post, Trump highlighted a second Fox story saying that Republican senators were learning “the hard way about the fallout from turning on Trump.”Trump said during the presidential campaign that “I alone can fix it,” referring to the problems that he said plagued the U.S. But when his agenda goes adrift -- as it did with the GOP’s push to undo President Barack Obama’s signature health care law last month -- he is quick to fault others. "I’m very disappointed in Mitch," the president told reporters at his golf resort in Bedminster, New Jersey, where he is on a working vacation. "Repeal and replace of Obamacare should’ve taken place. And it should’ve been on my desk virtually the first week I was here."

Healthcare Triage News: The Trump Administration Has Many Options to Undermine Obamacare – Dr. Aaron Carroll video- While the Senate and the House haven’t been very effective in passing a repeal of Obamacare, the ACA’s provisions are still at risk. There’s a lot that Donald Trump’s administration can do (or not do) to undermine Obamacare’s provisions and marketplaces.

New data on H-1B visas prove that IT outsourcers hire a lot but pay very little -- Hard numbers have been released by the US government agency that screens visas for high-skilled foreign workers, and they are not pretty. Data made available by the US Citizenship and Immigration Services (USCIS) for the first time show that the widely made complaint about the visa program is true: a small number of IT outsourcing companies get a disproportionately high number of H-1B visas and pay below-average wages to their workers. The H-1B program was put in the spotlight in April, when US President Donald J. Trump signed an executive order called “Buy American, Hire American” as part of his push to tighten immigration rules. Three months later, the USCIS formally disclosed the number of H1-B visas issued over the last two years by employer. Previously, the data were only available as estimates for companies petitioning for information, or by request under the Freedom of Information Act. Almost 4,000 companies submitted H-1B visa applications in fiscal year 2016. The top 20 sponsors took home 37% of all visas issued 1. IT outsourcing companies made up the top five. The new data also give a more accurate picture of salaries of H-1B workers by employer. The top IT outsourcing companies on average paid much lower salaries to their workers.  The wage divide is largely a result of different education requirements of H-1B positions. H-1B visas are issued to workers with specialized skills which generally requires a Bachelor’s degree or higher. More than 98% of approved H-1B visa positions were awarded to workers with either a Bachelor’s or a Master’s degree in fiscal year 2016. ‘

Trump's RAISE Act Immigration Bill -- As I reported here the other day, the White House has endorsed an immigration reform bill by Sens. Cotton and Perdue, known as the RAISE Act. The bill seems to be already drawing both support and fierce opposition. CNN White House correspondent Jim Acosta was so upset about the Trump administration’s endorsement of the bill that he picked a fight with Trump’s senior policy adviser Stephen Miller during the latter’s press conference. Harvard economist George Borjas talks up the bill in a Politico column today.  RAISE plugs two longtime, gaping loopholes in immigration policy, both unintended consequences of the landmark 1965 Immigration Act. First there is the problem of family reunification aspects in the policy set in 1965, specifically what today is called the Fourth Preference. Under this provision, U.S. citizens can sponsor their adult siblings for immigration. It was sold, I believe, as means to reunite families that had been split up by war, both World War II and various conflicts related to the Cold War. It was anticipated that the provision would be lightly used, and that most beneficiaries would be European. The other unforeseen consequence of the 1965 Act was skyrocketing usage of welfare by elderly Asian immigrants, primarily the Chinese and Koreans. This includes cash in the form of SSI, health care through Medicaid, government-subsidized senior housing and so on. These benefits are typically enjoyed by people who have never worked a day in the U.S., absolutely not the intent of the 1965 Act nor of the welfare system.  From my point of view, the bill has two major drawbacks. First, as I mentioned earlier today, I don’t like point systems, as they are elitist. I believe the nation benefits by having a diversity of socioeconomic classes in its immigration pool. The second point is more subtle. Many of you are aware of various proposals to “staple a green card” to the diplomas of foreign STEM students earning master’s degrees or PhDs at U.S. universities. The immigration reform groups have rightly opposed such proposals, which would flood the STEM job market, greatly reducing wages and job opportunities for U.S. citizens and permanent residents. A particular harmful consequence would be to exacerbate the rampant age discrimination problem in the tech industry, since the Staple bills would apply to new graduates, who are young.

Amid Trump's Immigration Crackdown, More Mexicans Get Visas to Work in U.S. | Fox Business: Demand in America for Mexican farmhands, landscapers and other temporary workers is surging as the Trump administration moves to curb immigration and renegotiate its trade relationship with Mexico. That demand is prompting both countries to search for ways to ease labor shortages in key parts of the U.S. economy. In the first nine months of fiscal 2017, which began Oct. 1, the U.S. Labor Department certified more than 160,000 temporary workers -- the bulk of them from Mexico -- to harvest berries, tobacco and other crops in the U.S. under the H-2A agricultural visa program. That was up 20% from the period a year earlier. The annual issuance of H-2A visas nearly doubled from 85,248 in fiscal 2012 to 165,741 in 2016. The U.S. doesn't cap the number of these visas. Outside of agriculture, use of another type of seasonal-work visa also has surged in response to increased U.S. demand for unskilled laborers such as hotel housekeepers. The Department of Homeland Security in July raised the annual cap on H-2B visas by more than 20% to 81,000. The majority of workers receiving this type of visa also are from Mexico. Among the employers that applied in the past year for guest workers under the H-2B program are two operations owned by the Trump Organization, the real-estate company controlled by President Donald Trump's family: the Mar-a-Lago resort in Florida and a Virginia vineyard. The Trump Organization declined to comment.

Trump deportations lag behind Obama levels - POLITICO: The U.S. is deporting people more slowly than during the Obama administration despite President Donald Trump’s vast immigration crackdown, according to new data from U.S. Immigration and Customs Enforcement. From Feb. 1 to June 30, ICE officials removed 84,473 people — a rate of roughly 16,900 people per month. If deportations continue at the same clip until the fiscal year ends Sept. 30, federal immigration officials will have removed fewer people than they did during even the slowest years of Barack Obama's presidency.In fiscal year 2016, ICE removed 240,255 people from the country, a rate of more than 20,000 people per month. In fiscal year 2012 — the peak year for deportations under Obama — the agency removed an average of roughly 34,000 people per month. The lower rate of deportations doesn’t mean Trump has embraced a hands-off approach to immigration enforcement. But it may mean that deportations are lagging behind arrest rates or removal orders, which by all accounts have soared since Trump took office. Soon after being sworn in, Trump signed an order greatly broadening the universe of people who could be targeted for deportation. In the next 100 days, immigration arrests rose by nearly 38 percent compared with the same period a year earlier.  However, an arrest doesn’t always translate into a speedy deportation, and several factors have suppressed the removal rate.First, the number of people caught trying to cross the U.S.-Mexico border has dropped precipitously under Trump, an indication that his hard-line enforcement has scared people away.  Another factor is the immigration courts, which face a backlog of more than 610,000 cases, according to the Transactional Records Access Clearinghouse at Syracuse University.

Trump’s Border Wall Cedes the Rio Grande to Mexico! -- Tens of thousands of acres would effectively be lost to Mexico. Anything south of the wall would be of no use to anyone north of the wall. It would become, at best, a no-man’s land, and by default, ceded to Mexico – along with access to the river itself.Although the land and riverbank would technically still belong to the United States, it would be walled off fromTexas, and access to the Rio Grande River would be lost from the Texas side. It is difficult to build anything in a riparian flood way or in a flood plain as unpredictable as the Rio Grande’s, so, as a practical matter, the proposed wall, like the fencing that is on the border now, would have to be built at a considerable distance north of the river bank, as shown below.Since the wall would require a maintenance road on both sides – even when out of the flood plain – you are looking at anywhere from 100′ setback to several hundred feet of setback from the centerline of the river. Say that setback averages out to only 300 feet, which is the length of a football field, which happens to be about an acre. At 160 feet wide per football field, that’s the equivalent of 33 acres per mile – on just the Mexican side of the wall. 33 acres of private property per mile walled off into Mexico – for the entire length of the Rio Grande River in Texas – that’s 1,240 miles of river – the distance from New York to New Orleans – or 40,920 acres of private land lost to Mexico in Texas alone. Plus the river itself. Trump’s Folly would be almost 2,000 miles long, that’s 66,000 acres of land tacitly ceded to Mexico. Over 100 square miles carved out of the US, plus land federalized on the US side of the wall for access and maintenance for another 100 square miles or about ten times the size of Manhattan.

 Trump says he’ll beat opioid epidemic with law-and-order approach - President Donald Trump on Tuesday vowed his administration would beat the opioid epidemic by beefing up law enforcement and strengthening security on the southern border to stop illegal drugs from entering the country. Trump, joined in Bedminster, New Jersey, by Health and Human Services Secretary Tom Price and other administration officials, emphasized a tough law-and-order approach, rather than new treatment or social programs, as the White House's primary strategy for halting an epidemic that kills 142 Americans every day, according to federal statistics. .."Strong law enforcement is absolutely vital to having a drug-free society," Trump said. "I'm confident that by working with our health care and law enforcement experts we will fight this deadly epidemic and the United States will win." The remarks echoed similar comments made by Attorney General Jeff Sessions earlier this summer. Trump as a candidate vowed to confront a public health crisis that has hit states he carried in the presidential campaign — like West Virginia and Kentucky — especially hard. Trump on Tuesday stopped short of declaring the crisis a national emergency — a recommendation the White House's opioid commission, led by New Jersey Gov. Chris Christie, made last week. Price later told reporters the administration is treating the opioid epidemic as an emergency, but that it does not need to make a formal declaration. 

Jeff Sessions Endorses Theft - Ron Paul - Attorney General Jeff Sessions recently ordered the Justice Department to increase the use of civil asset forfeiture, thus once again endorsing an unconstitutional, authoritarian, and increasingly unpopular policy.Civil asset forfeiture, which should be called civil asset theft, is the practice of seizing property believed to be involved in a crime. The government keeps the property even if it never convicts, or even charges, the owner of the property.Police can even use civil asset theft to steal from people whose property was used in criminal activity without the owners’ knowledge. Some have even lost their homes because a renter or houseguest was dealing drugs on the premises behind the owners’ backs. Civil asset theft is a multi-billion dollar a year moneymaker for all levels of government. Police and prosecutors receive more than their "fair share" of the loot. According to a 2016 study by the Institute for Justice, 43 states allow police and prosecutors to keep at least half of the loot they got from civil asset theft. Obviously, this gives police an incentive to aggressively use civil asset theft, even against those who are not even tangentially involved in a crime. For example, police in Tenaha, Texas literally engaged in highway robbery — seizing cash and other items from innocent motorists — while police in Detroit once seized every car in an art institute’s parking lot. The official justification for that seizure was that the cars belonged to attendees at an event for which the institute had failed to get a liquor license. Anyone traveling with "too much" cash runs the risk of having it stolen by a police officer, since carrying large amounts of cash is treated as evidence of involvement in criminal activity.

 Maybe Americans don’t need fast home Internet service, FCC suggests - Americans might not need a fast home Internet connection, the Federal Communications Commission suggests in a new document. Instead, mobile Internet via a smartphone might be all people need. The suggestion comes in the FCC's annual inquiry into broadband availability. Section 706 of the Telecommunications Act requires the FCC to determine whether broadband (or more formally, "advanced telecommunications capability") is being deployed to all Americans in a reasonable and timely fashion. If the FCC finds that broadband isn't being deployed quickly enough to everyone, it is required by law to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market." The FCC found during George W. Bush's presidency that fast Internet service was being deployed in a reasonable and timely fashion. But during the Obama administration, the FCC determined repeatedly that broadband isn't reaching Americans fast enough, pointing in particular to lagging deployment in rural areas. These analyses did not consider mobile broadband to be a full replacement for a home (or "fixed") Internet connection via cable, fiber, or some other technology. Last year, the FCC updated its analysis with a conclusion that Americans need home and mobile access. Because home Internet connections and smartphones have different capabilities and limitations, Americans should have access to both instead of just one or the other, the FCC concluded under then-Chairman Tom Wheeler. But with Republican Ajit Pai now in charge, the FCC seems poised to change that policy by declaring that mobile broadband with speeds of 10Mbps downstream and 1Mbps upstream is all one needs. In doing so, the FCC could conclude that broadband is already being deployed to all Americans in a reasonable and timely fashion, and thus the commission could take fewer steps to promote deployment and competition.

Almost All of FCC’s New Advisory Panel Works for Telecoms -When the Federal Communications Commission went looking this year for experts to sit on an advisory committee regarding deployment of high-speed internet, Gary Carter thought he would be a logical choice. Carter works for the city of Santa Monica, California, where he oversees City Net, one of the oldest municipal-run networks in the nation. The network sells high-speed internet to local businesses, and uses the revenue in part to connect low-income neighborhoods.. One of the panel’s stated goals is to streamline city and state rules that might accelerate installation of high-speed internet. But one of the unstated goals, members say, is to make it easier for companies to build networks for the next generation wireless technology, called 5G. The advanced network, which promises faster speeds, will require that millions of small cells and towers be erected nationwide on city- and state-owned public property.  The assignment seemed to call out for participation from city officials like Carter, since municipal officials approve where and what equipment telecommunications companies can place on public rights of way, poles and buildings. But the FCC didn’t choose Carter — or almost any of the other city or state government officials who applied. Instead the FCC loaded the 30-member panel with corporate executives, trade groups and free-market scholars. More than three out of four seats on the BDAC are filled by business-friendly representatives from the biggest wireless and cable companies such as AT&T Inc., Comcast Corp., Sprint Corp., and TDS Telecom. Crown Castle International Corp., the nation’s largest wireless infrastructure company, and Southern Co., the nation’s second-largest utility firm, have representatives on the panel. Also appointed to the panel were broadband experts from conservative think tanks who have been critical of FCC regulations such as the International Center for Law and Economics and the Mercatus Center at George Mason University.

The Democrat’s “Better Deal” – Run75441 - In a recent email exchange with Yves Smith at Naked Capitalism: “This is not going to work with voters. Tom Frank has been all over this topic, saying again and again, the Dems are refusing to give up on their losing strategy of focusing on the 10%, and are trying to cover for their abandonment of middle and working class people with identity politics.”What Yves is commenting about is a recent post and the “ Better Deal” proposed by Schumer and Pelosi. Schumer: “When you lose to somebody who has 40 percent popularity, you don’t blame other things — Comey, Russia — you blame yourself,” In speaking on the Dems new plan, he continues; “So what did we do wrong? People did not know what we stood for, just that we were against Trump, and people still believe that.”Pelosi: In a separate interview, the House Minority Leader says the new focus “is not a course correction; but, it is a presentation correction.”Yves Smith again; “Pelosi is upfront that all the Dems are doing is trying a new PR strategy.”  Sounds like Schumer recognized the issue; but as Yves and Pelosi said, it “is not a course correction; but, it is a presentation correction.” In other words, we are going to say the same “stuff,” but it will be said in a different way. That is not going to work for urban and rural dwellers alike who are worried about everyday life. .  Progressives and activists both believe the repackaging of a failed message in 2016 is going to miss the targeted middle and lower income constituents needed to win the 2018 elections. Paul Ryan and his caucus speak of specifics such as “proposals to revamp poverty programs, health care and taxes, and a hawkish national security stance” which plays well to rural constituents who are fed news from conservative sources. In contrast, the Democrat party’s establishment economics addressing the 10% again fails to talk about the everyday life of the rest of voters with a progressive message addressing quality of life improvements. Democrats have to rebut Repub ideology with sound proposals reinforcing and improving healthcare, jobs, education, retirement, long term care, etc. which are attacked in Ryan’s message.

The Congressional Map Has A Record-Setting Bias Against Democrats -- When Democrats think about their party’s problems on the political map, they tend to think of President Trump’s ability to win the White House despite losing the popular vote and Republicans’ potent efforts to gerrymander congressional districts. But their problems extend beyond the Electoral College and the House: The Senate hasn’t had such a strong pro-GOP bias since the ratification of direct Senate elections in 1913. Even if Democrats were to win every single 2018 House and Senate race for seats representing places that Hillary Clinton won or that Trump won by less than 3 percentage points — a pretty good midterm by historical standards — they could still fall short of the House majority and lose five Senate seats.This is partly attributable to the nature of House districts: GOP gerrymandering and Democratic voters’ clustering in urban districts has moved the median House seat well to the right of the nation. Part of it is bad timing. Democrats have been cursed by a terrible Senate map in 2018: They must defend 25 of their 48 seats1 while Republicans must defend just eight of their 52.But there’s a larger, long-term trend at work too — one that should alarm Democrats preoccupied with the future of Congress and the Supreme Court. In the last few decades, Democrats have expanded their advantages in California and New York — states with huge urban centers that combined to give Clinton a 6 million vote edge, more than twice her national margin. But those two states elect only 4 percent of the Senate. Meanwhile, Republicans have made huge advances in small rural states — think Arkansas, North and South Dakota, Iowa, Louisiana, Montana and West Virginia — that wield disproportionate power in the upper chamber compared to their populations..

The Tale of the Brothers Awan - There has been surprisingly little media follow-up on the story about the July 25th Dulles Airport arrest of House of Representatives’ employed Pakistani-American IT specialist Imran Awan, who was detained for bank fraud while he was allegedly fleeing to Pakistan. The mainstream media somewhat predictably produced minimal press coverage before the story died. The speed at which the news vanished has prompted some observers, including Breitbart, to sound the alarm over a suspected cover-up of possible exposure of classified information or even espionage that just might be part of the story that we are now calling Russiagate.  To be sure, the tale is a strange one with plenty of unsavory links. Thirty-seven year old Awan, his wife, sister-in-law and two brothers Abid and Jamal worked as IT administrators, full and part-time, for between 30 and 80 congressmen, all Democrats, including former Democratic National Committee (DNC) chairman Debbie Wasserman-Schultz. They did not have security clearances and it is not even certain that they were in any way checked out before being hired. Nor were their claimed skills at IT administration confirmed as their work pattern reportedly turned out to consist more of absences than time spent in the House offices. One congressional IT staffer described them as “ghost employees.” At one point, Imran brought into the House as a colleague one Rao Abbas, someone to whom he owed money, best distinguished by his being recently fired by McDonald’s. Abbas lived in the basement of a house owned by Imran’s wife as a rental property. He may have had no qualifications at all to perform IT but the congressmen in question did not seem to notice. Abbas wound up working, on the rare occasions that he went into the building, in the office of Congressman Patrick Murphy, who was at the time a member of the House Intelligence Committee as well as for Florida Congressman Theo Deutch. He was paid $250,000. To cover for all the non-working but on the payroll employees, Imran also hired a high school friend Haseeb Rana, who actually did know something about computers. Rana reportedly did “all the work” and kept wanting to quit for that reason. It was also against House rules for an IT administrator to fill in for someone else, as Rana routinely did, since each such employee had be personally registered by the congressman.

A New Report Raises Big Questions About Last Year’s DNC Hack --There has been a long effort to counter the official narrative we now call “Russiagate.” This effort has so far focused on the key events noted above, leaving numerous others still to be addressed. Until recently, researchers undertaking this work faced critical shortcomings, and these are to be explained. . Forensic investigators, intelligence analysts, system designers, program architects, and computer scientists of long experience and strongly credentialed are now producing evidence disproving the official version of key events last year. Their work is intricate and continues at a kinetic pace as we speak. But its certain results so far are two, simply stated, and freighted with implications:

  • There was no hack of the Democratic National Committee’s system on July 5 last year—not by the Russians, not by anyone else. Hard science now demonstrates it was a leak—a download executed locally with a memory key or a similarly portable data-storage device. In short, it was an inside job by someone with access to the DNC’s system. This casts serious doubt on the initial “hack,” as alleged, that led to the very consequential publication of a large store of documents on WikiLeaks last summer.
  • Forensic investigations of documents made public two weeks prior to the July 5 leak by the person or entity known as Guccifer 2.0 show that they were fraudulent: Before Guccifer posted them they were adulterated by cutting and pasting them into a blank template that had Russian as its default language. Guccifer took responsibility on June 15 for an intrusion the DNC reported on June 14 and professed to be a WikiLeaks source—claims essential to the official narrative implicating Russia in what was soon cast as an extensive hacking operation. To put the point simply, forensic science now devastates this narrative.

This article is based on an examination of the documents these forensic experts and intelligence analysts have produced, notably the key papers written over the past several weeks, as well as detailed interviews with many of those conducting investigations and now drawing conclusions from them. Before proceeding into this material, several points bear noting.

Mueller Seeks White House Documents on Flynn — Investigators working for the special counsel, Robert S. Mueller III, recently asked the White House for documents related to the former national security adviser Michael T. Flynn, and have questioned witnesses about whether he was secretly paid by the Turkish government during the final months of the presidential campaign, according to people close to the investigation. Though not a formal subpoena, the document request is the first known instance of Mr. Mueller’s team asking the White House to hand over records. In interviews with potential witnesses in recent weeks, prosecutors and F.B.I. agents have spent hours poring over the details of Mr. Flynn’s business dealings with a Turkish-American businessman who worked last year with Mr. Flynn and his consulting business, the Flynn Intel Group. The company was paid $530,000 to run a campaign to discredit an opponent of the Turkish government who has been accused of orchestrating last year’s failed coup in the country. Investigators want to know if the Turkish government was behind those payments — and if the Flynn Intel Group made kickbacks to the businessman, Ekim Alptekin, for helping conceal the source of the money. The line of questioning shows that Mr. Mueller’s inquiry has expanded into a full-fledged examination of Mr. Flynn’s financial dealings, beyond the relatively narrow question of whether he failed to register as a foreign agent or lied about his conversations and business arrangements with Russian officials. Mr. Flynn lasted only 24 days as national security adviser, but his legal troubles now lie at the center of a political storm that has engulfed the Trump administration. For months, prosecutors have used multiple grand juries to issue subpoenas for documents related to Mr. Flynn.

FBI Agents Raided Manafort's Home -- Confirming that Special Counsel Mueller's probe has a particular interest in the business dealing of Trump's former campaign chairman, the WaPo reports that FBI agents "raided the Alexandria home of President Trump’s former campaign chairman late last month, using a search warrant to seize documents and other materials." Federal agents reportedly appeared at Paul Manafort’s home without advance warning two weeks ago, in the predawn hours on Wednesday, July 26, the day after he met voluntarily with the staff for the Senate Intelligence Committee. The WaPo reports that the served search warrant was "wide-ranging and FBI agents working with special counsel Robert S. Mueller III departed the home with various records."The raid came as Manafort has been voluntarily producing documents to congressional committees investigating Russia’s interference in the 2016 presidential election. The search warrant indicates investigators may have argued to a federal judge they had reason to believe Manafort could not be trusted to turn over all records in response to a grand jury subpoena.It could also have been intended to send a message to President Trump’s former campaign chairman that he should not expect gentle treatment or legal courtesies from Mueller’s team.Among the documents taken were materials Manafort had already provided to Congress, WaPo's sources said. “If the FBI wanted the documents, they could just ask [Manafort] and he would have turned them over,” said one adviser close to the White House. Clearly, the intention was different.For now, the significance of the records seized from Manafort’s apartment is unclear, with the publication adding that Manafort provided documents to both the Senate J udiciary Committee and the Senate and House intelligence committees.

Mueller Goes After Manafort's Family; Sought Cooperation From Son-In-Law Jeffrey Yohai --Just one day after we found out that FBI agents 'raided' former Trump campaign chairman Paul Manafort's Alexandria home on July 26th, we learn that Special Counsel Mueller has also been going after Manafort's family in order gather dirt on a person they clearly view as a material witness.  According to Politico's anonymous sources (and you know what that means), Manafort's son-in-law, Jeffrey Yohai, was approached earlier this summer regarding his "business deals" with Manafort.Federal investigators sought cooperation from Paul Manafort’s son-in-law in an effort to increase pressure on President Donald Trump’s former campaign chairman, according to three people familiar with the probe.Investigators approached Jeffrey Yohai, who has partnered in business deals with Manafort, earlier this summer, setting off “real waves” in Manafort’s orbit, one of these people said. Another of these people said investigators are trying to get “into Manafort’s head.”Manafort, who is a focus of the broad federal and congressional investigations into Russian meddling in the 2016 presidential campaign, is also under investigation for his business and real estate transactions, including some that involve Yohai.

Deputy Attorney General: Special counsel Mueller needs permission to expand Russia investigation - : Deputy Attorney General Rod Rosenstein said on Sunday that the special counsel investigating Russia's interference in the 2016 election needs permission from the Department of Justice to expand his investigation if he finds evidence of an unrelated crime. In an interview with Fox News Sunday, Deputy Attorney General Rod Rosenstein said special counsel Robert Mueller's investigation of Russia's role in the 2016 campaign and President Donald Trump's campaign's potential ties to Russia was "not a fishing expedition." "If he finds evidence of a crime that is within the scope of what Director Mueller and I have agreed is the appropriate scope of this investigation, then he can," Rosenstein said. "If it's something outside that scope he needs to come to the acting attorney general, at this time me, for permission to expand his investigation." The deputy attorney general also pointed out that special counsel Kenneth Starr needed permission to expand his investigation during his probe into former President Bill Clinton's handling of a land deal. Top Trump administration officials have dismissed the investigation and attempted to undermine Mueller's credibility. Last week, White House special counselor Kellyanne Conway dubbed the investigation a "fishing expedition."  But Mueller has broader authority in the investigation than the White House may realize.  In appointing Mueller, Rosenstein gave him the authority not only to investigate "any links and/or coordination between the Russian government and individuals associated" with Trump's campaign, but also to examine "any matters that arose or may arise directly from the investigation."  Rosenstein also gave Mueller the power to investigate "any other matters within the scope of 28 C.F.R. § 600.4(a)" — including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.  The mandate's scope is similar to that given by then-Acting Attorney General James Comey to special counsel Patrick Fitzgerald in 2003 to investigate who leaked the identity of former CIA operative Valerie Plame.

Republicans Strike Back: Congressman Circulates Letter Demanding Mueller Open Hearing According to an exclusive report from the Daily Caller, Representative Brian Babin (R-TX) has apparently circulated a letter in DC asking for congressmen to sign onto an effort to force special counsel Robert Mueller testify publicly in an open congressional hearing.  Among other things, Babin says that Congress has a right to question the independence of Mueller's investigative staff and the scope of his investigation.Babin’s letter, which was obtained by TheDC, was sent out to congressmen Thursday and asks for members to cosign a letter he plans to send to House Judiciary chairman Bob Goodlatte and Senate Judiciary chairman Chuck Grassley.“Every nominee for United States Attorney must be confirmed by the Senate, a process that brings to the forefront any concerns regarding the nominee’s ability to hold their position in a decent and impartial manner. However, as Special Counsel Robert S. Mueller III and his team of lawyers investigate our very own president, we as a nation wait in the dark with very little information about those given this great authority,” Babin wrote in the letter to his fellow representatives.Babin writes in the letter that there are “serious concerns” about conflicts of interest with regard to members of Mueller’s counsel who donated “generously” to Democrats or even represented Clinton herself.“In addition, this investigation has the potential to drag on for months, or even years, and cost millions in taxpayer dollars,” Babin added.Babin’s goal is to have one or both of the judiciary committees “bring Mr. Mueller and his team out of the shadows” to answer questions about the “potential expenses incurred by Mr. Mueller, the scope of his investigation and the selection of his special council team.”

 Trump Says He Hasn’t Considered Firing Mueller Despite Scorn -- Donald Trump said he hasn’t thought about firing Robert Mueller, the special counsel whose investigation into Russia’s meddling in the 2016 election is now examining some of the U.S. president’s family members as well as current and former aides.“I haven’t given it any thought,” Trump told reporters Thursday when asked if he wants to fire Mueller. “I’m not dismissing anybody.”Pressed further, Trump said “We’re working with him.”The more conciliatory tone toward Mueller comes after months in which Trump publicly fumed about the Russia probe and made statements suggesting he might look for ways to dismiss, or at least undercut, the special counsel.On Twitter, Trump has suggested that Mueller and members of his legal team have conflicts of interest because of donations to Democratic political candidates. In a New York Times interview last month, he said Mueller has “many other conflicts that I haven’t said, but I will at some point.” He’s also criticized Attorney General Jeff Sessions as “weak” for recusing himself from involvement in the inquiry.But with decades of experience in Washington, Mueller has broad bipartisan support.  Republican and Democratic senators have proposed legislation that would require a judicial review of any attempt to remove a special counsel. With Sessions recused from the probe, any effort to oust Mueller would require the consent of deputy Attorney General Rod Rosenstein. In Senate testimony in June, Rosenstein confirmed it would be his responsibility to fire Mueller if there was cause, adding that he wouldn’t follow orders to do so without justification. The investigation has dominated much of Trump’s presidency, entangling top White House officials and family members of the president. Trump has long slammed the Russia probe as a “witch hunt,” “fake news” and a “total fabrication.” He didn’t back down from that criticism Thursday, saying, “They’re investigating things that never happened.”

Democrats pressure Hensarling to investigate Russia-Trump financial ties — Democrats are ramping up the pressure on House Financial Services Committee Chairman Jeb Hensarling, R-Tex., to compel Deutsche Bank to release information related to an internal investigation tracing alleged financial ties between Russian nationals and President Trump. The latest effort includes a letter from the top Democrat on the panel, Rep. Maxine Waters of California, who notes that Hensarling has the “unilateral authority to compel Deutsche Bank to produce the information we requested through the issuance of a subpoena.”

Donald Trump representatives considering bid for Macau casino | South China Morning Post: A company representing US President Donald Trump has applied for a casino trademark in Macau. DTTM Operations LLC, a Delaware-based company responsible for handling the ownership of dozens of trademarks for the president, filed four applications in the world’s largest gaming hub under the brand name “Trump” in June. The local government made the requests public last week. Among the applications for trademarks was one for gambling and casino services and facilities. Trump was once a commanding figure in Atlantic City, the casino hub in America’s northeast, where his casinos accounted for nearly a third of gambling revenues in the early 1990s, according to The New York Times. At the peak of his casino investment, Trump had four properties. But the real estate mogul ended up losing control of the casinos after a series of bankruptcies, the latest in 2009. Last year he won a protracted legal tussle against a small company in Macau over the Trump trademark, with a local court authorising him to use his trademarks in hospitality, restaurants and similar businesses. The timing of the latest move may add significance, given the potential for big changes in Macau’s casino industry in just a few years. The licences of Macau’s six casino operators begin to expire on March 31, 2020. It is still unclear whether the six will be allowed to continue operating in the city, and if new bidders will be allowed into the market.

Here Are the Financial Disclosures of Hundreds of Officials Trump Has Installed Across the Government -- ProPublica has been collecting disclosure forms that lay out Trump administration officials’ financial holdings and employment backgrounds.  We now have disclosures from hundreds of officials and we’re sharing them with you.  They are from White House staffers, President Trump’s Cabinet and from the hundreds of members of so-called beachhead teams that the administration has installed with little notice at federal agencies.  The disclosures are crucial to understanding potential conflicts. Many lobbyists and political consultants now work at the agencies they sought to influence.  We've also incorporated ethics waivers that the administration has given to 28 officials. These are useful because we can match up officials who have gotten waivers – usually former lobbyists, lawyers or TV consultants – with details of their assets and job histories.  Which officials are worthy of scrutiny? Help us figure it out. You can also contact us at disclosures@propublica.org. Here is a guide for how to leak to ProPublica.

 Quelle Surprise! Financial Firm Fines Are Way Down Under Trump  -- Yves Smith - The Wall Street Journal published a solid, well-researched article on how much various Federal financial regulators have levied in fines in the first half of 2017 versus the first half of 2016. The decline is so large, a full 2/3, that it demonstrates that the Trump business-friendly stance, and the large number of ex-Goldmanites on his team, is proving beneficial for large financial firms. Admittedly, one would expect fines to be lower by the change of Administrations slowing things down a bit. Another factor in the year-to-year decline is that in what sure looked like an effort to burnish Obama’s record, a lot of outstanding crisis-related matters that had been moving slowly were finally wound up. But there were other late-in-Administration actions that were ginned up to get under the statute-of-limitations wire. The slowness to act would weaken any case the Feds could make. Litigators will tell you that delay weakens a plaintiff’s case since memories fade and records can legitimately be lost or have been discarded, even before getting to the more obvious problem that it makes “I’m the CEO and I can’t remember anything” defenses more credible.  Needless to say, various agency spokesfolks tried to say that the decline had nothing to do with more of a wink and nod attitude towards enforcement. With the SEC, one factor is policy change by new chairman Jay Clayton, that all he wants to pursue is folks like bucket shop operators, who are marginal both in terms of conduct and in terms of their absolute importance. Supposedly sophisticated investors who are ripped off by private equity firms and hedge funds have to fend for themselves, even though a group of state Treasurers and other prominent government officials who are also public pension fund trustees wrote the SEC asking for it to do more than the not-much it was doing under Mary Jo White. The Journal pointed out the SEC’s big fines in the first half of 2016 were settlements of alleged accounting abuses, an area White emphasized….and for which Clayton appears to have little to no interest.  Another impediment is that the SEC has only three of five commissioner seats filled. Michael Piwowar is almost rabidly pro-business and regulation hostile, so it’s not hard to imagine him barring enforcement actions from proceeding.

Federal Bank Regulator Drops a Bombshell as Corporate Media Snoozes -  Pam Martens - Last Monday, Thomas Hoenig, the Vice Chairman of the Federal Deposit Insurance Corporation (FDIC), sent a stunning letter to the Chair and Ranking Member of the U.S. Senate Banking Committee. The letter contained information that should have become front page news at every business wire service and the leading business newspapers. But with the exception of Reuters, major corporate media like the Wall Street Journal, Bloomberg News, the Business section of the New York Times and Washington Post ignored the bombshell story, according to our search at Google News.What the fearless Hoenig told the Senate Banking Committee was effectively this: the biggest Wall Street banks have been lying to the American people that overly stringent capital rules by their regulators are constraining their ability to lend to consumers and businesses. What’s really behind their inability to make more loans is the documented fact that the 10 largest banks in the country “will distribute, in aggregate, 99 percent of their net income on an annualized basis,” by paying out dividends to shareholders and buying back excessive amounts of their own stock.Hoenig writes that the banks are starving the U.S. economy through these practices and if “the 10 largest U.S. Bank Holding Companies were to retain a greater share of their earnings earmarked for dividends and share buybacks in 2017 they would be able to increase loans by more than $1 trillion, which is greater than 5 percent of annual U.S.  GDP.”Backing up his assertions, Hoenig provided a chart showing payouts on a bank-by-bank basis. Highlighted in yellow on Hoenig’s chart is the fact that four of the big Wall Street banks are set to pay out more than 100 percent of earnings: Citigroup 127 percent; Bank of New York Mellon 108 percent; JPMorgan Chase 107 percent and Morgan Stanley 103 percent.

Only Ten Years After the Last Financial Crisis the Banks Are At It Again -- Apparently the Banks have been lobbying heavily, and expending significant amounts of money again, leaning on their Congressmen and pressuring regulators, saying that their capital standards need to be relaxed so that they can make more loans to stimulate economic growth. But that, according to the FDIC Vice-Chairman, is utter nonsense."Hoenig, who was a high-ranking Federal Reserve official during the crisis, cautioned Senate Banking Committee Chairman Mike Crapo and the committee's senior Democrat, Sherrod Brown, "against relaxing current capital requirements and allowing the largest banks to increase their already highly leveraged positions."Using public data to analyze the 10 largest bank holding companies, Hoenig found they will distribute more than 100 percent of the current year's earnings to investors, which could have supported to $537 billion in new loans.On an annualized basis they will distribute 99 percent of net income, he added. He added that if banks kept their share buybacks, totaling $83 billion, then under current capital rules they could boost commercial and consumer loans by $741.5 billion.  “While distributing all of today’s income to shareholders may be received well in the short run, it can undermine their future returns and weaken the growth outlook for the larger economy,' he wrote. Reuters, Payouts, not capital requirements, to blame for fewer bank loans: FDIC vice chairman  The Banks are spending a substantial amount of their current income on dividends to shareholders and very large stock buyback programs designed to increase their share prices. The chart below shows in the first column the almost shocking Payout Ratios being maintained by some of the Banks.

The major flaw in big banks' argument against the leverage ratio – Bank Think -  Excessive leverage was a primary cause of the financial crisis, and yet big banks and even some government officials appear eager to relax rules that limit leverage at the largest U.S. financial institutions. But banks’ argument for why such reform is necessary doesn’t hold water. Large banks say the risk-insensitive nature of the Basel III Supplemental Leverage Ratio (SLR) restricts market liquidity by increasing banks’ cost of holding so-called safe securities and derivatives for market-making activities. A proposed change to the leverage ratio would remove those assets from the SLR calculation. But the proposed change would allow more leverage which could amplify the alleged liquidity problem. The Basel III SLR regulation, finalized in 2014, put a limit on large banking organization leverage by requiring banking organizations with over $250 billion in assets to meet a new capital threshold that treats all holdings with an equal risk weighting. The SLR requirement must be met in addition to banks’ risk-based capital requirements. The eight U.S. "global systemically important banks" (G-SIBs) must meet an enhanced SLR of 5% at the holding company and 6% percent at the subsidiary bank level. The SLR rules take effect in 2018. The SLR is the ratio of an institution’s Tier 1 capital to its “total leverage exposure.” Total leverage exposure equals a holding company’s consolidated assets plus exposures from derivatives, repurchase agreements, securities lending, lines of credit, guarantees and other off-balance activities.  The case for relaxing the SLR has been championed by The Clearing House, the trade organization for the U.S. G-SIBs.  The recent Treasury Department report with recommendations for changing the regulatory framework sides with The Clearing House. Because leverage ratios are not risk-sensitive, Treasury claims they encourage G-SIBs to choose risky activities instead of providing customers access to safe central clearing derivatives trades and secured repurchase agreement financing.  Here lies the Achilles' heel of the Clearing House argument. If the debt overhang problem is the cause of diminished G-SIB participation in safe market-making and derivatives activities, then how can the correct solution be to replace the current SLR with a risk-weighted SLR requirement that allows G-SIBs to increase their leverage? Higher G-SIB leverage will only make the debt overhang problem worse, not better. The Treasury’s proposed changes to the SLR calculation will not restore the incentive for banks to get back into safe market-making activities.

Fed proposal won’t let boards off easy, but here’s why that’s OK  - The Federal Reserve Board issued an important, long-awaited proposal on Aug. 3 designed to revise and clarify expectations for boards of directors at Fed-supervised institutions. The Fed has noted that board ineffectiveness at large banks was a central contributor to the financial crisis, but clear Fed guidance in this area has been slow in coming.   Following the crisis, regulators in practice increased scrutiny of large-bank boards, but the demands became too expansive, diverting board time and attention away from their central function of setting a bank’s strategic path. The new Fed proposal is welcome news for the industry since it would redirect supervisory expectations more squarely toward senior management. Initial press reports highlighted the proposed narrowing of board responsibilities so board members can concentrate on strategic issues. Superficially, this may appear to be the case, but it would be a misreading of the Fed’s objectives to interpret the proposal as an overall lowering of supervisory standards for boards at large financial institutions. Banks shouldn’t mistake a clearer statement of expectations as an easing of standards. Indeed, by establishing more focused expectations — the new proposal provides five main measures for assessing board effectiveness — supervisors will have better tools to hold boards accountable.  From a supervisory perspective, setting clearer criteria of what the Fed expects from board members will help correct weaknesses in board oversight of their institutions. Clearer direction from regulators is all the more important as memories of the crisis increasingly fade. Strong implementation of these supervisory policies will give the public more confidence about the financial industry’s safety and stability. For banks, a more focused articulation of Fed expectations is good news in light of how the less formal supervisory policy coming out of the crisis led to substantial misplaced demands on board time and attention. But have no doubt: The new requirements will require large banks to do some substantial legwork. They face significant regulatory risk if they only concentrate on the narrowing of Fed demands for boards and fail to properly address the new expectations. Yet the new expectations appear aimed at effecting real improvements in board operation. Regulators extend living wills deadline for certain banks - — Federal regulators have agreed to extend deadlines for the living wills of dozens of foreign banks and two U.S. bank holding companies. CIT Group, Citizens Financial Group and 19 foreign banks will now be able to file their resolution plans as late as Dec. 31, 2018, the Federal Reserve Board and Federal Deposit Insurance Corp. said Tuesday. The banks had originally been slated to file their living wills by the end of this year.

OCC attacks on FDIC's de novo process are off base, experts say -  — Keith Noreika’s public feud with the Federal Deposit Insurance Corp. over its de novo chartering process is outdated and unnecessary, according to several industry professionals familiar with the process.  The acting comptroller of the currency has accused the FDIC of purposely delaying deposit insurance applications in order to keep new banks from forming, arguing that the approach is hampering the growth of the banking industry. While acting Comptroller of the Currency Keith Noreika's criticism that the FDIC is hampering the creation of new banks may have had merit in the past, the agency has fixed many problems.

Wells Fargo 'leaving no stone unturned' as new issues disclosed - Wells Fargo, reeling from a scandal over fake accounts that erupted in September, said it’s wrapping up an expanded review of that issue, while facing new probes and higher potential legal costs. The bank must “go beyond what has been asked of us by our regulators by reviewing all of our operations — leaving no stone unturned — so we can be confident we have done all that we can do to build a better, stronger Wells Fargo,” Chief Executive Tim Sloan said in a statement Friday. The Consumer Financial Protection Bureau is looking at whether consumers were “unduly harmed” by the bank's freezing and closing of accounts that had suspected fraudulent activity, the San Francisco bank said Friday in a regulatory filing. Wells Fargo also said in the filing that issues in its auto lending business may spark investigations, even beyond the practice of forcing unwanted insurance onto customers that the company disclosed last month. The expansion of its fake-accounts review to include three more years and a new methodology in finding affected customers will probably lead to a “significant increase” in cases, the bank said. The lender aims to have its consultant complete the review by the end of this quarter and doesn’t expect the incremental costs from reimbursing more customers to have a major financial impact. Separately, the company said it self-disclosed instances where foreign banks used “a Wells Fargo software-based solution” to finance trade involving nations prohibited by the Office of Foreign Assets Control. Wells Fargo is cooperating with a Department of Justice inquiry on the matter, it said. The bank’s “reasonably possible” legal charges could surpass its reserves by $3.3 billion as of June 30, up from an estimate of $2 billion at the end of March, according to the filing.

Wells Fargo said to face regulator scrutiny on second auto issue - Wells Fargo's regulators are looking into another issue involving insurance linked to auto loans as scrutiny of a key lending unit widens, according to people with knowledge of the matter.The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau are examining Wells Fargo's guaranteed auto protection insurance program, said the people, who asked not to be named discussing regulatory matters. The insurance has also been of interest to the Federal Reserve, another person said. Wells Fargo said in a regulatory filing last week that it had identified "certain issues related to the unused portion" of insurance agreements that could result in refunds to customers. So-called GAP insurance covers the difference between what a customer owes on a car loan and the value an insurance company will give to the customer if the car is destroyed in an accident or stolen. The same three regulators have been in discussions with Wells Fargo on another kind of auto-loan insurance, Franklin Codel, the lender's head of consumer lending, told Bloomberg in an interview late last month. The regulators were notified "very promptly" after Wells Fargo received consumer complaints about its collateral protection insurance practices in July 2016 and have been kept up-to-date since, Codel said. The bank said in its quarterly filing Friday that it expects to find and fix more issues in its auto-lending business, potentially including how it creates, services and collects on indirect loans and linked insurance products. It said those issues may spark investigations from regulators. Wells Fargo disclosed it faces additional government probes, including a look into whether consumers were "unduly harmed" by the bank freezing and closing accounts suspected of fraudulent activity. And it's still trying to pinpoint how many bogus accounts employees opened without client permission while trying to hit sales targets, a scandal that first came to light last year. The New York Times reported the Fed's inquiry into the GAP insurance issue yesterday.

Wells Fargo insurance abuses spur probe by California regulator - Wells Fargo's admission that it charged customers for auto policies they didn't request has prompted an investigation by the California Department of Insurance. "The department will investigate fully to determine the extent to which California consumers were affected by improper placement of force- or lender-placed auto insurance and seek corrective action and penalties in the event that California's consumer protection laws were violated," Commissioner Dave Jones said in a statement Tuesday on the watchdog's website. Wells Fargo already settled a U.S. probe last year into the unauthorized opening of savings and checking accounts. The San Francisco-based bank said in July that an internal review found that it also placed unnecessary car insurance polices with National General Holding Corp. to protect against losses on auto loans. The commissioner said his office is also reviewing the insurer and that his department will work with other state regulators investigating National General and Wells Fargo. The bank has said it may pay as much as $80 million to affected auto-loan clients — with extra money for as many as 20,000 who lost cars to repossessions. National General's CEO, Barry Karfunkel, said Tuesday that it acted appropriately.

Elizabeth Duke said likely to be next Wells Fargo chairman - Wells Fargo Vice Chairman Elizabeth Duke is expected to replace Stephen Sanger as chairman once he leaves the board, The Wall Street Journal reported Thursday, citing people familiar with the matter. Sanger’s tenure on the board will end at Wells' annual meeting next spring, when he will have reached the mandatory retirement age of 72. Sanger will likely step down sometime before that meeting, though directors are supposed to make final decisions by Labor Day, the Journal story said. Duke will probably replace Sanger atop the San Francisco company’s board, according to the story. Wells Fargo said last week that the board is reviewing its own “structure, composition and practices,” which will lead to actions to be announced later in the third quarter. Duke, a Federal Reserve Board governor from 2008 to 2013, joined Wells’ board in November 2014, when she was a part-time faculty member and executive-in-residence at Old Dominion University in Norfolk, Va.  Duke was the first woman to serve as chair of the American Bankers Association, in 2004, and had been a member of the board of directors of the Federal Reserve Bank of Richmond. She was chief operating officer of TowneBank from 2005 to 2008, and was an executive vice president at Wachovia Bank, from 2004 to 2005, and at SouthTrust Bank from 2001 to 2004. SouthTrust was acquired by Wachovia in 2004. Duke also served as chief executive of Bank of Tidewater, which was acquired by SouthTrust, and chief financial officer of Bank of Virginia Beach. Calls for changes on the Wells board intensified last month after the bank said 500,000 clients might have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own insurance policies. The disclosure follows a scandal last year in which the company acknowledged that it may have opened millions of unauthorized deposit and credit card accounts.

Do problems with lender-placed auto insurance go beyond Wells Fargo? - After Wells Fargo said last week that it improperly charged customers for auto insurance, the company has once again shown its propensity to bathe its brand in scandal.But some consumer advocates are questioning whether Wells is the only lender beset with problems in the niche market for lender-placed auto insurance.Wells’ latest auto scandal has put a spotlight on an opaque corner of the industry — and put relationships between banks and insurers under closer regulatory scrutiny. California’s insurance regulator said Tuesday that it would begin a probe into Wells and its insurance vendor, National General; regulators in New York subpoenaed Wells last week. Over the past two decades, many big banks have pulled back from the lender-placed auto market, following a frenzy of litigation in the mid-1990s, according to industry observers. Still, premiums have begun to grow in recent years, as some regional banks have remained in the business and new auto finance companies increasingly use lender-placed policies to protect their collateral.“Why would we think that National General was limiting its crappy practices to its biggest client?” said Birny Birnbaum, a former economist with the Texas Department of Insurance who now serves as executive director of the nonprofit Center for Economic Justice.  It’s unclear how many banks in the industry use lender-placed auto insurance, a type of coverage purchased by lenders to protect themselves from losses. The insurance is mostly used in cases where borrowers’ insurance policies have lapsed, or where they have stopped making regular payments.

Private Equity Flouts State Regulations by Buying Medical Practices – Yves Smith - It’s so routine for private equity firms to run roughshod over the law that industry publications don’t even bother pointing out the misconduct. An example is a new article in PE Hub, Why PE firms are buying orthopedic and ophthalmology practices . Mind you, private equity firms buying up medical practices is hardly new. For instance, some private equity firms were acquiring outpatient surgery centers years ago. Roy Poses at Health Care Renewal pointed out in 2015 that private equity was targeting primary doctors’ practices. And as Wolf Richter wrote later that year:A report by Bain and Company found that last year, healthcare buyouts by PE firms – not corporate M&A – in North America soared nearly 60% year-over-year, to a new record of $15.6 billion, across 80 mostly smaller deals, with only two deals above $1 billion.The new thing is that PE firms are targeting primary care groups.“It’s a land-grab right now,” Todd Spaanstra, a partner at Crowe Horwath, an accounting and consulting firm, told Modern Healthcare in April. Part of the reason why they’re chasing after primary care practices is because specialty practices have become targets of publicly traded corporate entities that have been driving up prices beyond what PE firms are willing to pay. The PE Hub article describes some but not all of the rationale for private equity firms snapping up speciality practices. They are targeting ones that combine insurance-covered procedures as well as more highly paid ancillary services, such as Lasik, or for dermatologists, lucrative vanity procedures, like Botox and injections to plump up sagging faces. As the article elaborates:

EPI comment regarding the fiduciary rule and prohibited transactions exemptions --To the Department of Labor:  On July 21, 2017, Economic Policy Institute submitted a response to your Request for Information, expressing strong opposition to any further delay in the full implementation and enforcement of the fiduciary rule. In particular, EPI objected to any delay in the January 1, 2018, applicability date of the provisions in the BIC Exemption, Principal Transactions Exemptions, and amendments to PTE 84-24.In the July 21 letter, EPI estimated the cost to retirement savers of further delays in full implementation and enforcement. Specifically, EPI estimated that the cost to retirement savers of the announced seven-month delay (from June 9, 2017 to January 1, 2018) in full implementation and enforcement to be $3.9 billion dollars over 30 years, with each additional year’s delay costing an additional $7.3 billion dollars over 30 years.We are following up in order to rebut misleading arguments made by opponents of the rule, including the U.S. Chamber of Commerce.1 The Chamber and other industry allies claim that the fiduciary rule will hurt the very savers it is designed to help by increasing fees paid for investment advice, restricting access to retirement services, and limiting investment options. Affected industries invariably predict dire outcomes from regulations they oppose, since there are no repercussions when their predictions prove unfounded. In this case, the industry’s main argument rests on the assumption that retirement savers receive valuable advice in exchange for commissions paid to brokers and other conflicted “advisers,” and that absent these commissions many retirement savers would pay recurring fees over longer periods to financial advisers for equally valuable advice. If this were true, long-term savers could be better off paying one-time commissions to brokers than recurring fees to financial advisers.

Another fiduciary rule delay would cost retirement savers $10.9 billion over 30 years --The Trump administration’s Department of Labor is actively working to weaken or rescind the “fiduciary” rule (the rule that requires financial advisers to act in the best interest of their clients). The latest step in these efforts is a proposed 18 month delay of key provisions of the rule past their already-delayed implementation date of January 1st, 2018.An additional 18-month delay would be enormously expensive to retirement savers. Previously, we estimated that the delays the department has already instituted under the new administration mean that retirement savers will lose $7.6 billion over the next 30 years. Using the same methodology, we estimate that an additional 18 months of delay of key provisions in the rule announced yesterday will cost retirement savers an additional $10.9 billion dollars over the next 30 years. The map below shows how much retirement savers would lose in each state over the next 30 years as a result of an additional 18 month delay. The losses range from $16 million in Wyoming to $132 million in Iowa to $646 million in Texas to $1.2 billion in California.

Comment to the U.S. Department of Labor opposing the rescission of the Persuader Rule -- I am submitting this comment as the Associate Labor Counsel at the Economic Policy Institute. I write this comment in opposition to the Department of Labor’s (DOL) June 2017 proposal (81 Fed. Reg. 15924) to rescind the final rule titled, “Interpretation of the ‘Advice’ Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act” (the “Persuader Rule”), issued on March 24, 2016. (82 Fed. Reg. 26877). In this comment, I first show that the Persuader Rule is consistent with both the purpose and legislative history of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). Second, I explain why the four reasons that DOL has presented for rescinding this rule do not justify its rescission, and I show that they, in fact, contravene the purpose of the LMRDA itself.DOL followed its statutory mandate when promulgating the Persuader Rule Congress was crystal clear that one of its primary purposes in enacting the LMRDA was to help protect employees’ basic rights under our nation’s labor laws. As Section 2(a) of the Act states, “Congress finds that, in the public interest, it continues to be the responsibility of the Federal Government to protect employees’ rights to organize, choose their own representatives, bargain collectively, and otherwise engage in concerted activities for their mutual aid or protection[.]” (29 U.S.C. § 401). In enacting the LMRDA, Congress was addressing concerns that some labor consultants, acting on behalf of management, were working behind the scenes to discourage legitimate employee-organizing drives and were engaging in activities intended to undercut employee support for unions.1Between 71 and 87 percent of employers fight their employees’ efforts to bargain collectively by hiring professional anti-union consultants—or “persuaders”—to bust their employees’ organizing drives with sophisticated anti-union campaigns.2 Union-busting firms promise to equip employers with “campaign strategies” and “opposition research.”3 They produce anti-union videos, websites, posters, buttons, T-shirts, and PowerPoint presentations for employers to deploy against their workers’ unionizing efforts. Employers spend large amounts of money to hire anti-union consultants, sometimes hundreds of thousands of dollars,4 and the union-avoidance industry has been estimated to be a $1 billion industry.5

NSFW? Microsoft tries to make blockchains work-appropriate - With bitcoin near all-time highs, it’s easy to forget how much time and money the financial industry has spent in recent years trying to appropriate the digital currency’s underlying technology.  Executives at banks and other companies have sought to borrow the basic idea of an immutable, distributed ledger where one version of a set of data is shared among several parties, with no need for middlemen. Banks see a way to save money and have fewer disputes, more transparency, faster agreement on and execution of contracts, and better traceability.But they also have a long list of concerns and demands such technology would need to meet to be acceptable in a heavily regulated industry: security, data privacy, reliability, speed, control, performance and scalability among them.  A host of vendors and organizations have been working feverishly to satisfy these demands and to produce a version of distributed ledger technology banks could feel comfortable using, including IBM, Microsoft, R3, the Hyperledger Project, and Digital Asset Holdings.  The vendor that can provide distributed ledger that’s enterprise-ready will have many deep-pocketed companies beating a path to its door.  Microsoft announced Thursday its effort to provide these missing pieces around distributed ledger technology. It’s called Coco Framework — the name Coco stands for confidential consortium — and it will be posted to Github as an open source project in early 2018.  Significantly, JPMorgan Chase — an early innovator in this space that’s developed its own Ethereum-based blockchain, Quorum — Intel, bank-backed distributed ledger company R3 and supply chain company Mojix (which has blockchain technology for the retail and supply chain industry) have thrown their support behind it. Work has already been done to integrate the public Ethereum blockchain with it, as well as Quorum, R3's Corda, and the Hyperledger Sawtooth. "Information sharing is what powers business at this point," said Amber Baldet, executive director and blockchain program lead at JPMorgan Chase. "We see a lot of opportunity in mutualization of infrastructure and being able to share information not only quickly but with a high degree of security and trust in the veracity of that information. Blockchain and distributed ledger help us do that.” In financial services, she said, “there's the added opportunity to transfer value and digital assets across these systems, which could revolutionize the way banking and capital markets and all our payment systems work in the future."

Here’s what both sides in banking-and-commerce debate get wrong -- The interest of tech firms in offering banking services has opened a familiar line of criticism from opponents of what has been a very successful type of bank charter. They say industrial banks like those allowed in Utah could enable both retailers like Walmart and tech giants like Amazon and Microsoft to control the banking system through what these critics assert are rampant conflicts of interest. On the flip side of the coin, other commentators — more friendly toward the IB charter — say the policy precedent supports weakening restrictions on nonbank parent companies owning banks. But both sides describe the current industrial bank sector, its governing rules and the intent of the charter inaccurately. Federally insured IBs have existed since 1982 and have consistently been the best-capitalized and most profitable group of banks in the nation. That is not because they have unfair advantages or unlimited growth potential. True, IBs are one of the last types of charters that can be owned by a commercial parent that does not have to become a bank holding company. What critics get wrong is believing that this enables limitless loans and other types of transactions between a commercial giant and its bank subsidiary.Not only do IBs face restrictions on the kind of deposit accounts they can offer, but Sections 23A and 23B of the Federal Reserve Act, and Regulation W, prohibit a federally insured bank from making lo ans directly to an affiliate or directly to someone to buy stuff from an affiliate. Therefore, statements like those in a recent BankThink article by George Washington University professor Arthur Wilmarth — that IBs “are captive lenders for their … parents” that make “loans to promote the sale of their parents' goods and services” — are erroneous. The limited circumstances where an industrial bank can lend to affiliates include if the receivables are collateralized dollar for dollar by a cash deposit in the bank. Another exemption applies if the IB is lending to third parties and the parent or affiliate buys the receivables without recourse on a daily basis. An IB can also make loans up to a small percentage of assets if the credit is oversecured by other kinds of collateral. These exemptions eliminate any risk to the bank and any opportunity to use deposits to fund the loans.

Institutions shouldn't count on Congress killing CFPB arbitration rule  — The financial services industry is at risk of being caught flat-footed if a legislative measure to rescind the Consumer Financial Protection Bureau’s rule regulating arbitration agreements fails to pass. The industry has been counting on a Republican-controlled Congress to strike down the CFPB’s rule using the Congressional Review Act, but as lawmakers recessed for an August break last week, the prospects for overturning the rule are uncertain. If lawmakers do not act, the rule is set to go into effect in mid-March.

Warren asks banks to take public position on CFPB arbitration rule — Sen. Elizabeth Warren, D-Mass., is seeking clarity from the largest banks over whether they support a Republican effort to reverse the Consumer Financial Protection Bureau's arbitration rule. Warren sent letters Thursday to the top executives at 16 large institutions in which she inquired why they had stayed largely silent about the rule, despite loud opposition from industry trade groups.

More on Personal Debt and Multilevel Marketing Companies – Pamela Foohey, Credit Slips - Last year, I posted about John Oliver's segment on Last Week Tonight dissecting multilevel marketing (MLM) companies (aka pyramid schemes), and proposed a link between personal debt, bankruptcy, and MLM companies. Prominent MLM companies include Amway, Herbalife, the relatively new Rodan + Fields, and the even newer (to me, at least) LuLaRoe, through which women sell brightly-colored stretchy women's and kids' clothing.   Since 2010, the MLM industry has grown 30%. LuLaRoe apparently adds 150 retailers a day (a figure unconfirmed by LuLaRoe). This all makes the MLM industry ripe for budget-crushing debt -- and for more news stories about that debts' effects on people's lives. Quartz recently published such a piece, aptly titled: Multilevel-marketing companies like LuLaRoe are forcing people into debt and psychological crisis. Although the piece is far from a rigorous study of the financial pitfalls of joining a MLM, it is an interesting and entertaining read. It uses LuLaRoe to highlight the reality of MLMs: lots of self-empowerment language and lots of debt. According to an FTC study cited in the piece, 99% of people who join MLMs lose money. Many of the piece's anecdotes track with my hypotheses about the connection between MLMs and bankruptcy. The self-empowerment / women's empowerment language the company representatives use to recruit may appeal to people who face money troubles already. Signing up to be a retailer, with the promise of being able to support your family as long as you put in the hard work, likely presents an attractive alternative to other methods of dealing with mounting debts or other financial problems, including filing bankruptcy. But with sizable investments -- it costs $5,000 to $6,000 to begin as a LuLaRoe consultant -- joining a MLM company might spell financial disaster, complete with even more credit card debt.  Yet more and more people are joining these companies. Most of these people's businesses will fail. For some, that failure may come with debt that contributes to their filing bankruptcy.

Leading Index for Commercial Real Estate "Stumbles" in July -  Note: This index is possibly a leading indicator for new non-residential Commercial Real Estate (CRE) investment, except manufacturing.  From Dodge Data Analytics: Dodge Momentum Index Stumbles in July: The Dodge Momentum Index fell in July, dropping 3.3% to 135.0 (2000=100) from its revised June reading of 139.6. 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. The move lower in July was due to a 6.6% decline in the institutional component of the Momentum Index, while the commercial component fell 1.1%.This month continues a recent trend of volatility in the Momentum Index where a string of gains is interrupted by a step backwards in planning intentions. Despite the decline from June to July, the Momentum Index is 6.9% higher than one year ago, which suggests further moderate gains in construction activity throughout the year. The commercial component of the Momentum Index is 8.0% higher than last year, while the Institutional component is 5.3% higher. This graph shows the Dodge Momentum Index since 2002. The index was at 135.0 in July, down from 139.6 in June.The index is still up 6.9% year-over-year. According to Dodge, this index leads "construction spending for nonresidential buildings by a full year". This suggests further increases in CRE spending over the next year.

False Claims Act cases make lenders ask 'Where's the reg relief?' -- The False Claims Act was created to keep the Union Army from being ripped off by suppliers during the Civil War. But more than 150 years later, this law strikes fear in the hearts of mortgage lenders and servicers because of its potential for large financial penalties.Industry observers expected the Trump administration to be less aggressive in using the False Claims Act to pursue fraud cases against lenders and servicers of government-insured loans. But so far, that hasn't happened. Instead, the Justice Department has shifted the focus of investigations and expanded their scope.Case in point: the DOJ's latest False Claims Act action, a $75 million settlement with PHH Corp. that is unique in that it covers loans sold to Fannie Mae and Freddie Mac, in addition to loans insured by the Federal Housing Administration and Department of Veterans Affairs.In disclosing the settlement, PHH cited its desire "to avoid the distraction and expense of potential litigation." While that's a common rationale to settle regulatory inquiries and private lawsuits, it's notable here given that PHH appears ready to take its legal wrangling with the Consumer Financial Protection Bureau all the way to the Supreme Court.The industry criticism of the Justice Department lies in its use of the False Claims Act to pursue enforcement actions against FHA lenders and servicers. The DOJ is accused of being too heavy-handed and nitpicky in its investigations. Consumer advocates obviously don't see it this way, largely because this industry earned a reputation for not being diligent about its processes and having shoddy documentation during the housing crisis. And at a time when low volume has lenders loosening credit standards and the FHA's role in the industry is evolving, perhaps stringent oversight is warranted.  Lenders are tapping into new low down payment programs with Fannie Mae and Freddie Mac as an alternative to the FHA program, in part because of the heightened risk of DOJ enforcement actions. And those programs appear to be having some success at attracting first-time home buyers.

Libor going away creates a compliance trap for ARM lenders -  With the London interbank offered rate going away by 2021, picking a new index to serve as the benchmark for adjustable-rate mortgages is the easy part. Industrywide implementation is where things get tricky. Origination and servicing systems will need to be updated to accommodate the new benchmark and those revisions have to be applied in a consistent manner across myriad platforms, which are often customized to meet lender and servicer specifications, said John Levonick, director of regulatory compliance at Clayton Holdings. Failure to do so could invite a new wave of legal and regulatory scrutiny to the mortgage industry, particularly if consumers are harmed.

Fannie-Freddie could need $100B bailout if new crisis hits: FHFA - Mortgage-finance giants Fannie Mae and Freddie Mac could need nearly $100 billion in bailout money in the event of a new economic crisis, according to stress test results released Monday by their regulator.The companies would need to draw between $34.8 billion and $99.6 billion in U.S. Treasury aid under a "severely adverse" scenario, depending on how they treated assets used to offset taxes, the Federal Housing Finance Agency said in its report. The losses would leave $158.4 billion to $223.2 billion available to the companies under their bailout agreements.Fannie and Freddie, like other major financial companies, are required by the Dodd-Frank Act to face annual tests of their ability to withstand a major recession. The results are likely to be used both by proponents of letting the two companies build a larger capital buffer and by some policy makers who think such an effort isn't needed.The current terms of their bailout agreements require Fannie and Freddie to turn over nearly all profits to Treasury in the form of dividend payments. They are currently permitted to retain a capital buffer of $600 million apiece, and the level will fall to zero next year.FHFA Director Mel Watt has warned against letting the buffer disappear and said he may allow the companies to build some capital. The retained earnings, which would cut the taxpayer dividend, would only be enough to protect against small losses rather than the dramatic impact of a severe crisis, Watt and other FHFA officials have said. "It is especially irresponsible for the enterprises not to have such a limited buffer," Watt said in testimony to the Senate Banking Committee in May.

Fannie, Freddie Would Need $100BN Bailout In New Financial Crisis --- While the latest Fed stress test found that all US commercial banks have enough capital to survive even an "adverse" stress scenario, a severe recession in which the VIX hypothetically soars to 70, the two US mortgage giants would not be quite so lucky: according to the results from the annual stress test of Fannie Mae and Freddie Mac released today by their regulator, the Federal Housing Finance Agency, the "GSEs" which were nationalized a decade ago in the early days of the crisis, would need as much as $100 billion in bailout funding in the form of a potential incremental Treasury draw, in the event of a new economic crisis.  Under the "severely adverse" scenario, i.e., a "severe global recession" U.S. real GDP begins to decline immediately and reaches a trough in the second quarter of 2018 after a decline of 6.50% from the pre-recession peak. The rate of unemployment increases from 4.7% to a peak of 10.0% in the third quarter of 2018. CPI declines to about 1.25% by the second quarter of 2017 (so not that much further from here) and then rises to approximately 1.75% by the middle of 2018. Outright deflation is not even considered.   The Severely Adverse scenario also includes a global market shock component that impacts the Enterprises’ retained portfolios. The global market shock involves large and immediate changes in asset prices, interest rates, and spreads caused by general market dislocation, uncertainty in the global economy, and significant market illiquidity. Option-adjusted spreads on mortgage-backed securities widen significantly in this scenario. The two companies, which buy mortgages from lenders, wrap them into securities and make guarantees to investors in case the loans default backing more than $4 trillion in securities, would need to draw between $34.8 billion and $99.6 billion in U.S. Treasury aid under a “severely adverse” scenario, depending on how they treated assets used to offset taxes, of which $42.6 billion would go to Freddie and $57 billion to Fannie. The losses would leave $158.4 billion to $223.2 billion available to the companies under their bailout agreements.

One part of GSE reform is already working – Mark Zandi, Moody’s - Questions about what do with Fannie Mae and Freddie Mac and what our future housing finance system will look like have plagued policymakers since the two mortgage behemoths were put into conservatorship nearly nine years ago. But in the background of this debate is an unheralded success story that goes a long way to settling it: credit risk transfers. Risk transfers are not only an effective method for mitigating the risk that Fannie and Freddie pose to taxpayers while in conservatorship, they should be a central part of any reformed housing finance system.To understand credit risk transfers, consider that at their core Fannie and Freddie’s job is to separate the interest rate risk and credit risk inherent in the mortgage loans they purchase. The agencies sell the interest rate risk to investors in mortgage-backed securities, and before the financial crisis they held on to the credit risk. Of course, that’s what got them into trouble. As homeowners stopped making their loan payments, the credit losses overwhelmed what little capital the agencies had, and they failed.This is where credit risk transfers come in. The transfers began more than four years ago at the behest of the agencies’ regulator, the Federal Housing Finance Agency. Instead of holding on to credit risk, Fannie and Freddie are now transferring much of it to private investors. The bulk of these risk transfers are through capital market transactions with an array of investors, including asset managers, hedge funds and sovereign wealth funds that agree to buy securities backed by the agencies’ loans that are subject to write-downs if homebuyers default. The risk transfers have expanded more recently to include transactions with other financial institutions, including reinsurers, private mortgage insurers and mortgage lenders. Instead of credit risk remaining at the agencies, making them too big to fail, it is being dispersed broadly throughout the entire global financial system. To date, Fannie and Freddie have transferred most of the credit risk on $1.6 trillion in mortgage loans — one-third of the loans they own — to private investors. On their more recent loans, the agencies have been transferring more than one-half of the risk, and the transfers are taking place mostly on loans that pose the biggest concern for taxpayers.

Fannie and Freddie: REO inventory declined in Q2, Down 30% Year-over-year -- Fannie and Freddie reported results last week. Here is some information on Real Estate Owned (REOs).  Freddie Mac reported the number of REO declined to 9,915 at the end of Q2 2017 compared to 13,284 at the end of Q2 2016. For Freddie, this is down 87% from the 74,897 peak number of REOs in Q3 2010. For Freddie, this is the lowest since at least 2007. Fannie Mae reported the number of REO declined to 31,371 at the end of Q2 2017 compared to 45,981 at the end of Q2 2016. For Fannie, this is down 81% from the 166,787 peak number of REOs in Q3 2010. For Fannie, this is the lowest since at least 2007. Here is a graph of Fannie and Freddie Real Estate Owned (REO). REO inventory decreased in Q2 for both Fannie and Freddie, and combined inventory is down 30% year-over-year.  There are still a number of properties in the foreclosure process with long time lines in judicial foreclosure states - but this is close to normal levels of REOs.

Farmer Mac's earnings increase as its portfolio grows - Farmer Mac's second-quarter net earnings increased 46% year-over-year, driven by a boost in net interest income that was enhanced by its growing loan and securities portfolio.  The government-sponsored enterprise had net income of $17.5 million, compared with $12 million for the same period last year.

Texas home equity loan foreclosures could become easier -- Twenty years ago, Texas became the last state in the union to legalize the home equity loan, allowing people for the first time to use their own homes as collateral. But lawmakers also kept tight restrictions on the loans, which saved Texans from the excesses that contributed to a housing bust that nearly brought down global economy. Now, a coalition of lenders and Realtors is trying to loosen the rules on those loans in ways that homeowner advocates say could get borrowers in trouble."It's a wolf in sheep's clothing," says Charlie Duncan, a fair housing planner at the advocacy nonprofit Texas Low-Income Housing Information Service. "Make no mistake, more families will lose their homes because of the irresponsible lending this amendment will allow." The proposed changes will be on the ballot this fall as a constitutional amendment, having passed unanimously through both houses of the Legislature. In the ballot language, the changes seem innocuous, but may carry risk.One provision would expand the list of entities able to make home equity loans from primarily banks to savings and loan companies, mortgage bankers, subsidiaries of banks and credit unions.Another provision lowers the cap on fees that lenders can charge homeowners from 3 percent of the loan to 2 percent. But the change would likely would increase the amount borrowers end up paying by shifting most of the large expenses in closing costs — surveys, appraisals, and title insurance — outside the cap. In that way, the fees paid by homeowners could rise to 4 to 5 percent of the loan, according to Chip Lane, a Houston attorney who represents homeowners in foreclosure cases. Banks say the change is necessary to make it worth it for them to do smaller loans. Their profits took a hit in 2013, when the Texas Supreme Court overturned interpretations by the Texas Finance Commission that allowed lenders to add expenses on top of the 3 percent cap.

Black Knight Mortgage Monitor: "Low-Down-Payment Purchase Lending at Seven-Year High" --Black Knight Financial Services (BKFS) released their Mortgage Monitor report for June today. According to BKFS, 3.80% of mortgages were delinquent in June, down from 4.31% in June 2016. BKFS also reported that 0.81% of mortgages were in the foreclosure process, down from 1.10% a year ago. This gives a total of 4.61% delinquent or in foreclosure. Press Release: Black Knight’s Mortgage Monitor: Low-Down-Payment Purchase Lending at Seven-Year High, Largely a Product of Overall Purchase Market Growth Today, the Data & Analytics division of Black Knight Financial Services, Inc. released its latest Mortgage Monitor Report, based on data as of the end of June 2017. This month, in light of much commentary and speculation on the re-emergence of purchase loans with loan-to-value (LTV) ratios of 97 percent or higher, Black Knight looked at low-down-payment purchase lending trends, gaining some early insight into the performance of these products. As Black Knight Data & Analytics Executive Vice President Ben Graboske explained, in general, low-down-payment purchases are on the rise, but this does not necessarily mean a return to the practices – and risks – of the past.

Corelogic: "May 2017 Delinquency Rate Lowest in Nearly a Decade" - From Corelogic: May 2017 Delinquency Rate Lowest in Nearly a Decade CoreLogic® ... today released its monthly Loan Performance Insights Report which shows that, nationally, 4.5 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in May 2017. This represents a 0.8 percentage point decline in the overall delinquency rate compared with May 2016 when it was 5.3 percent.
As of May 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.7 percent compared with 1 percent in May 2016. The serious delinquency rate, defined as 90 days or more past due including loans in foreclosure, was 2 percent, unchanged from April 2017 and down from 2.6 percent in May 2016. The 2 percent serious delinquency rate in April and May this year was the lowest since November 2007 when it was also 2 percent. Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To comprehensively monitor mortgage performance, CoreLogic examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next. The rate for early-stage delinquencies, defined as 30-59 days past due, was 1.9 percent in May 2017, down from 2 percent in May 2016. The share of mortgages that were 60-89 days past due in May 2017 was 0.63 percent, down slightly from 0.66 percent in May 2016. “Strong employment growth and home price increases have contributed to improved mortgage performance,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Early-stage delinquencies are hovering around 17-year lows, and the current-to-30-day past due transition rate remained low at 0.8 percent. However, the same positive economic conditions helping performance have also contributed to a lack of affordable supply, creating challenges for homebuyers.”

MBA: Mortgage Applications Increase in Latest Weekly Survey -- From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 4, 2017.
... The Refinance Index increased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 0.3 percent compared with the previous week and was 7 percent higher than the same week one year ago. ...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.14 percent from 4.17 percent, with points increasing to 0.38 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans
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The Madness Is Back: Homeowners Take Out Mortgages To Buy Bitcoin, Cars And Wine - It's been about a decade since the term "mortgage arbitrage" made headlines. It's back. In the clearest sign yet of just how late into the investing the developed world finds itself, the FT writes that wealthy British homeowners are again borrowing against their property to invest in bonds, equities, alternative investments or commercial property as the low cost of debt creates opportunities for “mortgage arbitrage”. And while taking out a mortgage to invest in "safer" arbs like corporate bonds, commercial real estate or private equity would be at least understandable, if not excusable, in the current low-yield regime, some more extreme "investment" decisions suggest that the madness and euphoria that marked the peak of the last asset bubble is back: while growing numbers are prepared to risk using their primary residence as collateral, some are prepared to gamble on extremely volatile assets. Like bitcoin. One broker said a mortgage-free homeowner with a house valued at £10m had taken out a fixed-rate loan of just under £2m to buy bitcoin, the crypto currency that has seen huge volatility in recent months. Others have invested in classic cars or fine wine. One former banker took out a £500,000 mortgage, not for investment purposes, but to provide a fund for routine spending and other eventualities.  To be sure, these are extreme - and for now rare - examples of investor euphoria, even the more mundane "mortgage arbitrageurs" are willing to take major gambles: "Interest rates of less than 2 per cent on two- and five-year fixed-rate home loans are tempting high-income,mortgage-free homeowners to raise money against their property in the hope they can profit from higher rates of return elsewhere." Simon Gammon, director at mortgage broker Knight Frank Finance, said the arbitrage had emerged as a trend among financially sophisticated clients as mortgage rates fell. “We’re a specialist lender at the top end but we’re seeing up to a dozen of these deals a month,” he said. “This is something that has come about because of the current environment of low rates.”

 Rich SF residents get a shock: Someone bought their street - Thanks to a little-noticed auction sale, a South Bay couple are the proud owners of one of the most exclusive streets in San Francisco — and they’re looking for ways to make their purchase pay.Tina Lam and Michael Cheng snatched up Presidio Terrace — the block-long, private oval street lined by 35 megamillion-dollar mansions — for $90,000 and change in a city-run auction stemming from an unpaid tax bill. They outlasted several other bidders. Now they’re looking to cash in — maybe by charging the residents of those mansions to park on their own private street. Those residents value their privacy — and their exclusivity. Past homeowners have included Sen. Dianne Feinstein and her financier husband, Richard Blum; House Democratic leader Nancy Pelosi; and the late Mayor Joseph Alioto. A guard is stationed round the clock at the stone-gate entrance to the street to keep the curious away. So imagine the residents’ surprise when San Jose residents Cheng and Lam wound up with the street, its sidewalks and every other bit of “common ground” in the private development that has been managed by the homeowners since at least 1905. That includes a string of well-coiffed garden islands, palm trees and other greenery that enhance the gated and guarded community at the end of Washington Street, just off Arguello Boulevard and down the hill from the Presidio. The couple’s purchase appears to be the culmination of a comedy of errors involving a $14-a-year property tax bill that the homeowners association failed to pay for three decades. It’s something that the owners of all 181 private streets in San Francisco are obliged to do.

Inflation concerns push mortgage rates lower -- Mortgage rates dropped to their lowest point in six weeks as bond investors were concerned about inflation and the U.S. economy, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 3.9% for the week ending Aug, 10, down from last week when it averaged 3.93%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.45%.

U.S. Rent Growth Flatlines As Massive Flood Of New Apartment Supply Finally Takes Its Toll -- After a slow and steady march higher in the wake of the 'great recession' nearly a decade ago, a note today from Rent Cafe shows that average rents in the United States may have finally stalled in July at $1,350 per month after posting a paltry sequential gain of just 0.1%.  Rents are still steadily climbing across the country, but that growth is finally slowing – and in a big way. In July, national rents grew a meager 0.1% over the month and just 2.6% from the same period in 2016, according to recent data from Yardi Matrix. This national slowdown is thanks, in large part, to the huge influx of new apartments that has hit the scene in the past year – as well as the thousands more expected by the end of 2017. This year is expected to mark the biggest jump in apartment construction in the last two decades, with nearly 347,000 new units entering the market – a 21% increase over last year’s numbers.

Tenants Under Siege: Inside New York City’s Housing Crisis -- New York’s is what aid groups would characterize as a “complex emergency”: man-made and shaped by a combination of forces that have led to a large-scale “displacement of populations” from their homes. What makes the crisis especially startling is that New York has the most progressive housing laws in the country and a mayor who has made tenants’ rights and affordable housing a central focus of his administration.The tide of homelessness is only the most visible symptom. There are at least 61,000 people whose shelter is provided, on any given day, by New York’s Department of Homeless Services. The 661 buildings in the municipal shelter system are filled to capacity nightly, and Mayor Bill de Blasio recently announced plans to open ninety new sites, many of which are already being ferociously resisted by neighborhood residents. A packed meeting in Crown Heights, Brooklyn, about a proposed shelter for 104 men over the age of fifty that I attended this winter quickly devolved into a cacophony of ire. “You dump your garbage on us because you think we’re garbage!” shouted a black woman to a city official. The official seemed stunned, and police watched anxiously as the meeting broke up. The revulsion against the homeless seemed linked to a deep suspicion of “the powers that be, whoever they may be,” as one attendee put it. There were already several shelters in the area. Were the local residents “connected” to the homeless—those on the lowest social rung? When the city changed eligibility for the shelter to men sixty-two and older, residents opposing it were not assuaged: a neighborhood association filed a lawsuit that blocked the shelter from opening for nearly two months, until it was dismissed by a judge in late May.

US Household Debt Reaches Record Levels Since Great Recession - The financial crisis roughly a decade ago was a defining moment in U.S. economics and regulation, but really this was a story of debt and who gets left holding the bag. At that time, the country had taken on an incredible amount of debt in the form of mortgages and student loans. And it seems that we have reached those levels again.In the first quarter of 2017, household debt outstanding reached $12.7 trillion, beating the peak set back in 2008 before the precipitous fall not long after. The financial crisis as we know it was brought about by the housing market collapse, and with mortgages making a significant portion of the debt that Americans had, the market didn’t stand a chance.For a point of perspective, household debt outstanding in the first quarter is larger than China’s economy, or nearly four times that of Germany’s.On the other hand, household net worth is also at a record high of $94.8 trillion, surfing on the wave of perhaps one of the biggest bull markets ever. However, most of this wealth creation only benefited those at the top with the capital to invest.According to Bloomberg:For most Americans, whose median household income, adjusted for inflation, is lower than it was at its peak in 1999, borrowing has been the answer to maintaining their standard of living. The increase in debt helps explain why the economy’s main source of fuel is providing less of boost than in the past. Personal spending growth has averaged 2.4% since the recession ended in 2009, less than the 3% of the previous expansion and 4.3% from 1982-90. Also consider the demographics that are at play. Millennials are currently the largest living generation in the United States. There are trends within this group that affect who or how they will take on debt. For instance it’s more likely that millennials will take on debt for student loans, which might preclude them from taking on more debt with a mortgage.

Consumers' total debt climbs to a fresh record - CBS - American consumers increased their borrowing at a slower pace in June, as the category that includes auto and student loans posted the smallest gain in a year. Still, the June increase brought overall consumer credit -- not including mortgages or other debt secured by real estate, including home-equity loans -- to a fresh record of $3.86 trillion. In addition, the total for the category of "revolving debt," primarily credit card balances also hit a new record high of $1.027 trillion. The Federal Reserve said Monday that overall consumer credit expanded by $12.4 billion in June, down from May's $18.3 billion increase and less than economists had been expecting. The credit report is closely watched for clues about the direction of consumer spending, which accounts for about 70 percent of economic activity. Nonrevolving credit, which includes auto and student loans, rose $8.3 billion, down from an $11.4 billion jump in May and the smallest amount since a $7 billion increase in June 2016. Revolving debt, the category that includes credit cards, climbed $4.1 billion, down from May's $6.9 billion gain. This category of debt had crossed the $1 trillion threshold in fourth-quarter 2016, not having seen that level since the Great Recession. U.S. economic growth rose at a solid 2.6 percent annual pace from April through June on a healthy increase in consumer spending. The job market also looks good. Employers last month added 209,000 jobs, and the unemployment rate fell to a 16-year low 4.3 percent. But the Commerce Department reported last week that consumer spending slowed in June as incomes grew at the weakest pace in seven months. "America's credit card balances have never been higher, but there's no reason to think they won't just keep climbing," said Matt Schulz, CreditCards.com's senior industry analyst. "Combine that with steadily rising interest rates and you have a potentially volatile mix." 

US consumer credit rose at slower pace in June — American consumers increased their borrowing at a slower pace in June, as the category that includes auto and student loans posted the smallest gain in a year. The Federal Reserve said Monday that overall consumer credit expanded by $12.4 billion in June, down from May’s $18.3 billion increase and less than economists had been expecting. The credit report is closely watched for clues about the direction of consumer spending, which accounts for about 70 percent of economic activity. Non-revolving credit, which includes auto and student loans, rose $8.3 billion, down from an $11.4 billion jump in May and the smallest amount since a $7 billion increase in June 2016. The category that includes credit cards climbed $4.1 billion, down from May’s $6.9 billion gain. The June increase brought consumer credit to a fresh record of $3.86 trillion. The Fed’s monthly credit report does not include mortgages or other debt secured by real estate, including home-equity loans. The U.S. economy rose at a solid 2.6 percent annual pace from April through June on a healthy increase in consumer spending. The job market also looks good. Employers last month added 209,000 jobs, and the unemployment rate fell to a 16-year low 4.3 percent. But the Commerce Department reported last week that consumer spending slowed in June as incomes grew at the weakest pace in seven months.

U.S. Credit-Card Debt Surpasses Record Set at Brink of Crisis -- U.S. consumer credit-card debt just passed an ominous milestone, beating a record set just before the global financial system almost collapsed in 2008. Outstanding card loans reached $1.02 trillion in June, data from the Federal Reserve show, as lenders including Citigroup Inc. and JPMorgan Chase & Co. compete to sign up cardholders who may carry balances -- a relatively lucrative business in a prolonged period of low interest rates. The bet is that this time it won’t end so badly. In 2008, a drop in home prices spiraled into a global financial meltdown, and after the jobless rate surged toward 10 percent, banks wrote off more than $100 billion in credit-card loans over the next two years. Investors have been skittish over the potential for defaults to rise ever since card balances eclipsed $1 trillion in February. Credit-card issuers Capital One Financial Corp., Synchrony Financial and Discover Financial Services said write-off rates ticked up in the second quarter from the previous three months.

US Credit Card Debt Surpasses Financial Crisis Record, As Student And Auto Loans Hit New All Time High -- Who would have expected that today's otherwise boring monthly consumer credit report would be the day's most exciting event. Well, moments ago the monthly update from the Federal Reserve confirmed that as of the end of June, total revolving (i.e. credit card) credit rose to $1,021.7 billion, an increase of $4.1 billion on the month, and a new all time high, taking out the previous record high set during the summer of 2008. Coupled with the monthly $8.3 billion increase in non-revolving credit, which also rose to an all time high of $2,834.1 billion... ... means that total consumer credit in June increased by $12.4 billion, slightly less than the $13.9 billion expected and modestly less than the $18.4 billion increase in May, to $3,855.8 billion, also a record high  Taking a closer look at the quarterly update in non-revolving debt, we find that for another consecutive quarter, both student and auto loans hit record highs, of $1.450 trillion and $1.131 trillion respectively, although there does appears to be a modest slowdown in credit issuance for these two largest categories.Considering the recent sharp revision to the US household savings rate, which wiped out $250 billion in personal savings with the stroke of an excel pen...... the fact that US households i ncreasingly have to rely on their credit cards to support their daily lives will hardly come as a surprise.

How Did They Get So Rich? -- In Monday’s New York Times, David Leonhardt shared a version of the following graph produced by Piketty, Saez, and Zucman as part of their Distributive National Accounts project. What the graph shows is that top incomes increased massively between 1980 and 2014, while the incomes of other groups grew much more slowly, with the vast majority of adults experiencing income gains below the national average. To supplement this graph, I have decomposed the income gains of the top 1 percent into capital and labor components. Capital refers to income received from owning assets: dividends from stock, interest from debt, and rents from real estate. Labor refers to income received from working: salaries and wages. What this decomposition shows is that the majority of income gains for the top 1 percent came from capital rather than labor. In fact, all top 1 percent income growth after 2000 came from capital.

 Despite Historically Low Interest Rates, Consumers Are Paying an Average of 14 Percent on Credit Card Debt - Pam Martens On August 7 the Federal Reserve released an updated report on consumer debt. It raises more questions about how the big Wall Street banks are making all those billions of dollars in profits.Since 2012, the benchmark 10-year U.S. Treasury note has yielded below 2.5 percent for the majority of that period. But according to the Federal Reserve chart above, on all consumer credit card accounts assessed interest, the interest rate charged to consumers has moved from 12.96 percent in 2012 to 14 percent as of May 2017. (The 14 percent figure is defined as follows by the Fed: “The rate for accounts assessed interest is the annualized ratio of total finance charges at all reporting banks to the total average daily balances against which the finance charges were assessed (excludes accounts for which no finance charges were assessed).”From 2012 to the end of the second quarter of 2017, total consumer debt has expanded from $2.9 trillion to $3.855 trillion on a seasonally adjusted basis, according to the latest Fed report.One has to seriously question if the persistent subpar growth rate of 2 percent or less for the U.S. economy and the continuing closures of retail stores is directly related to the obscene interest rates being charged to U.S. consumers by the mega Wall Street banks that hold the majority of credit card debt. The 14 percent average rate blurs the fact that many consumers are being charged in excess of 20 percent on their credit cards. In a Town Hall speech in New York City on January 5, 2016, Senator Bernie Sanders had this to say about needed reforms to rein in Wall Street abuses:“If we are going to create a financial system in this country that works for all Americans, we have got to stop financial institutions from ripping off the American people by charging sky-high interest rates and outrageous fees…“It is wrong that millions of Americans are paying credit card interest rates of 20 or 30 percent.

BLS: CPI increased 0.1% in July, Core CPI increased 0.1% -- From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in July on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.7 percent.... The index for all items less food and energy rose 0.1 percent, the fourth month in a row it increased by that amount. ... The index for all items less food and energy also rose 1.7 percent for the 12 month period, the same increase as for the 12 months ending May and June.  . This was below the consensus forecast of a 0.2% increase for CPI, and above the forecast of a 0.2% increase in core CPI.

Consumer Price Index: July Headline & Core Below 2% for Third Consecutive Month - The Bureau of Labor Statistics released the July Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 1.73%, up from 1.63% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.69%, down fractionally from the previous month's 1.70%. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in July on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.7 percent. The indexes for shelter, medical care, and food all rose in July, leading to the seasonally adjusted increase in the all items index. The energy index declined slightly in July, with its major component indexes mixed. The index for natural gas declined, while the electricity index rose and the gasoline index was unchanged. The food index increased 0.2 percent, with the indexes for food at home and food away from home both rising.The index for all items less food and energy rose 0.1 percent, the fourth month in a row it increased by that amount. The indexes for shelter, medical care, recreation, apparel, motor vehicle insurance, and airline fares all rose in July. These increases more than offset declines in the indexes for new vehicles, communication, used cars and trucks, and household furnishings and operations.The all items index rose 1.7 percent for the 12 months ending July, a slightly larger increase than for the 12 months ending June. The index for all items less food and energy also rose 1.7 percent for the 12 month period, the same increase as for the 12 months ending May and June. The energy index rose 3.4 percent over the last year, while the food index increased 1.1 percent. [More…]Investing.com was looking for a 0.2% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 1.8% for Headline and 1.7% for Core.The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

Early Look at 2018 Cost-Of-Living Adjustments and Maximum Contribution Base -- The BLS reported this morning: The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.6 percent over the last 12 months to an index level of 238.617 (1982-84=100). For the month, the index decreased 0.1 percent prior to seasonal adjustment. CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U, and is not seasonally adjusted (NSA). In 2016, the Q3 average of CPI-W was 235.057.The 2016 Q3 average was the highest Q3 average, so we only have to compare Q3 this year to last year. (Sometimes we have to look back two years). This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.Note: The year labeled for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year). CPI-W was up 1.6% year-over-year in July, and although this is early - we still need the data for August and September - it appears COLA will be positive this year, and will probably be around 1% to 2% this year. The law prohibits an increase in the contribution and benefit base if COLA is not greater than zero.  However if the there is even a small increase in COLA (seems likely this year), the contribution base will be adjusted using the National Average Wage Index.

July Producer Price Index: Final Demand Down - Today's release of the July Producer Price Index (PPI) for Final Demand came in at -0.1% month-over-month seasonally adjusted, down from last month's 0.1%. It is at 1.9% year-over-year, down from 2.0% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) also came in at -0.1% MoM, down from 0.1% the previous month and is up 1.8% YoY. Investing.com MoM consensus forecasts were for 0.1% headline and 0.2% core. Here is the summary of the news release on Final Demand:The Producer Price Index for final demand declined 0.1 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices inched up 0.1 percent in June and were unchanged in May. (See table A.) On an unadjusted basis, the final demand index increased 1.9 percent for the 12 months ended in July.Over 80 percent of the July decrease in final demand prices is attributable to the index for final demand services, which fell 0.2 percent. Prices for final demand goods edged down 0.1 percent.The index for final demand less foods, energy, and trade services was unchanged in July following a 0.2-percent advance in June. For the 12 months ended in July, prices for final demand less foods, energy, and trade services rose 1.9 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 overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

U.S. producer prices record biggest drop in 11 months (Reuters) - U.S. producer prices unexpectedly fell in July, recording their biggest drop in nearly a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate hike. Other data on Thursday showed an increase in the number of Americans filing for unemployment benefits last week. The trend in weekly jobless claims, however, remained consistent with a tightening labor market. "Another twist of the screw tighter for this labor market but inflation is not able to gain a foothold in this economy," said Chris Rupkey, chief economist at MUFG in New York. "The pot is on the stove boiling but no inflation steam is coming out." The Labor Department said its producer price index for final demand slipped 0.1 percent last month, weighed by decreasing costs for services. That was the largest decline since August 2016 and reversed June's 0.1 percent gain.  In the 12 months through July, the PPI increased 1.9 percent after rising 2.0 percent in the year through June. Economists had forecast the PPI to tick up 0.1 percent last month and 2.2 percent from a year ago. A key gauge of underlying producer price pressures that excludes food, energy and trade services was unchanged last month. The so-called core PPI gained 0.2 percent in June. The core PPI increased 1.9 percent in the 12 months through July after advancing 2.0 percent in June.  Though the correlation between the PPI and the consumer price index has weakened, last month's drop in producer prices could worry Fed officials who have long argued that the moderation in inflation was temporary.

 U.S. wholesale inventories post biggest gain in six months | Reuters: (Reuters) - U.S. wholesale inventories increased more than previously reported in June, recording their biggest gain in six months, as automobile stocks rose further amid declining sales. The Commerce Department said on Wednesday that wholesale inventories rose 0.7 percent after an unrevised 0.6 percent increase in May. The department reported last month that wholesale inventories jumped 0.6 percent in June. Auto inventories rose 1.4 percent after advancing 0.6 percent in May. The auto sector is struggling in the face of slowing demand, which has left manufacturers with an inventory glut. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - rose 0.6 percent in June. Inventory investment had a neutral impact on the second quarter's 2.6 percent annualized growth pace after chopping off 1.46 percentage points from GDP at the start of the year. Businesses have been carefully managing inventory amid sluggish domestic demand. Sales at wholesalers increased 0.7 percent after dipping 0.1 percent in May. Sales of motor vehicles fell 0.5 percent after declining 0.6 percent in May. At June's sales pace it would take wholesalers 1.29 months to clear shelves, unchanged from May. The inventories-to-sales ratio for motor vehicles increased to 1.79 months from 1.76 months in May. That ratio has risen from 1.67 months in January.

Postal Service likely to default on $6.9 billion benefits payment — The U.S. Postal Service warned Thursday that it will likely default on up to $6.9 billion in payments for future retiree health benefits for the fifth straight year, citing a coming cash crunch that could disrupt day-to-day mail delivery. The service said it expected cash balances to run low by October and to avoid bankruptcy would likely not make all of its payments as required under federal law. Postmaster General Megan Brennan stressed an urgent need for federal regulators to grant the Postal Service wide freedom to increase stamp prices to help cover costs, citing continuing red ink due to declining first-class mail volume and the expensive mandates for retiree benefits. The Postal Service has already defaulted on $33.9 billion in health benefit prepayments. Left unresolved, the rapidly growing debt means that American taxpayers eventually could be forced to cover the massive costs when future postal retirees seek to cash in on the health benefits to which they are legally entitled. The Postal Regulatory Commission is making a decision on stamp pricing next month. “Our financial situation is serious, but solvable,” Brennan said, citing an unreasonable rate cap that restricts stamp price increases to the rate of inflation. “We’re clearly looking for the PRC to establish a new pricing system for us.”

NFIB: Small Business Optimism Index increased in July -- From the National Federation of Independent Business (NFIB): July 2017 Report: Small Business Optimism Index The Index of Small Business Optimism rose 1.6 points to 105.2, preserving the surge in optimism that started the day after the election. Seven of the 10 Index components posted a gain, two declined, and one was unchanged. Since the recession, the Index peaked at 105.9 in January, just 0.7 points above the July reading.   Small business owners reported an adjusted average employment change per firm of 0.21 workers per firm over the past few months, a solid performance. Thirteen percent (up 3 points) reported increasing employment an average of 4.5 workers per firm and 11 percent (unchanged) reported reducing employment an average of 1.6 workers per firm (seasonally adjusted). A seasonally adjusted net 19 percent plan to create new jobs, up 4 points, with higher levels not seen since December 1999.  Sixty percent reported hiring or trying to hire (up 6 points), but 52 percent (87 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Nineteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 4 points), second only to taxes. This is a particularly severe problem in construction (28 percent) and manufacturing (21 percent) where labor shortages are the top problem, trumping taxes and regulatory costs. Thirty-five percent of all owners reported job openings they could not fill in the current period, up 5 points, the highest reading since November 2001.  This graph shows the small business optimism index since 1986. The index increased to 105.2 in July.

Multiple Jobholders Are Not A Weak Spot In The Employment Report, by Tim Duy: Along with every decent employment report comes the efforts to debunk that report. I see that an article from Pedro Nicolaci Da Costa at Business Insider is making the rounds tonight. In it Da Costa directs us to this in particular from Komal Sri-Kumar:The plight of low-income workers is underlined by yet another statistic. According to BLS numbers, 7.6 million workers held multiple jobs last month, up 2% from 7.4 million in July 2016. The principal reason workers hold more than one position is that no single job provides a sufficient income. In a robust economic recovery, the number of full-time workers should be rising, and the number of workers employed part-time or holding multiple jobs, should decline. Let's look at a picture of this one: Sri-Kumar claims that in a robust economic expansion, the number of multiple job holders should be declining. In other words, multiple job holders should be a countercyclical indicator. But even the most cursory look at the data tells you that the number of multiple job holders is a procyclical indicator. It should rise as the economy gains steam and there is more opportunity for those who need or want second jobs to find such employment. The trend of multiple job holders is very clearly not a sign of weakness in the economy, but a sign of strength.

BLS: Job Openings Increased in June - From the BLS: Job Openings and Labor Turnover Summary:  The number of job openings increased to 6.2 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.4 million and 5.2 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.1 percent and 1.2 percent, respectively. ...  The number of quits was little changed at 3.1 million in June. The quits rate was 2.1 percent. The number of quits was little changed for total private and for government. Quits decreased in finance and insurance (-21,000).  The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.  . Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. 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 increased in June to 6.163 million from 5.702 in May. This is the highest number of job openings since this series started in December 2000. The number of job openings (yellow) are up 11% year-over-year. Quits are up 5% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are mostly moving sideways at a high level, and quits are increasing. This is another strong report

US Job Opening Soar To Record High -- After nearly two years of being rangebound, between 5.5 and 6 million, the BLS's JOLTS report - Janet Yellen's favorite labor market indicator- showed that in June, the number of job openings soared by 461,000 from 5.7 million to a new all time high of 6.163 million, smashing expectations of a far more subdued print of 5.75K.The biggest increase in job openings was in the Professional and Business Services category, which rose by 179K, Education and Health services which rose by 123K, Construction up by 62K, and Trade transportation up by 41K. Curiously, even manufacturing job openings increased by 38K in June, while Other Services and Retail job openings both declined, by 62K and 42K, respectively. ). The number of job openings increased in the Midwest and West regions.Earlier in the day, the NFIB survey report highlighted that the challenge for employers at the moment is to deliver wage gains despite less robust trends in profit. Taken from that survey: "While inflation remains low, reports of higher worker compensation continue to be strong, consisted with historically tight labor markets. Reports of increased compensation rose 3% to a net 27% . Rising compensation will attract workers back into the labor force, but it is a slow process. The frequency of reports of improved profit trends was unchanged at a net negative 10 percent reporting quarter on quarter profit improvements, historically an excellent reading and one of the best readings in this expansion. In spite of rising labor costs, owners are seeing decent bottom line performance."So far the wage gains have yet to materialize. Aside from the unexpected surge in job openings, the rest of the report was more subdued, with the pace of hiring actually declining from 5.459MM to 5.356MM...

More Americans would rather not work than take jobs for the stingy wages employers are paying - In the early years of the Obama administration, as new taxes on upper-income Americans were enacted as part of Obamacare and the expiry of the Bush tax cut loomed, it was common to hear libertarian types warn that businesspeople and entrepreneurs might just Go Galt. That is to say, if they determined that losing 50 cents of every dollar in taxation wasn’t worth their trouble, they’d take a cue from the hero of Ayn Rand’s Atlas Shrugged, fold up their businesses, and quit work altogether. Check out this March 2009 Michelle Malkin column for an exegesis of this, um, idea. “Enough,” she wrote. “While they take to the streets politically, untold numbers of America’s wealth producers are going on strike financially.” Fast-forward eight years, and it seems that a different group of people may be deciding to Go Galt: workers.Earlier this week, the Department of Labor released the latest Job Opening and Labor Turnover Summary (JOLTS) report, which tallies job openings, hires, and quits. In June, the number of open positions spiked to 6.2 million, up 461,000 from May. That’s slightly more than the entire population of Missouri. It’s a record, and it’s up 11 percent from June 2016. There are plenty of explanations for the seeming shortage of workers. Baby boomers are exiting the workforce. Many of the undocumented immigrants who fill low-paying service jobs have left the country or have been deported. The economy has been expanding for more than eight years, and the unemployment rate is 4.3 percent. Which means many of the people who can hold down jobs—or want to hold down jobs—already have them. In some areas, the need to pass drug tests is disqualifying individuals from the workforce. And in some instances, there just aren’t enough people with the relevant skills to fill the openings. But as readers of this column have heard me say before, one of the big—perhaps the biggest—problem in the labor market today is that employers aren’t willing to pay people enough to fill their open positions. And this is happening even as they must fill a record number of openings. Hiring today means you have to convince someone to leave their job, leave school, or get off the couch. And if the incentive isn’t sufficiently large, it is hard to find a new employee.

Agricultural Work Visas Soar As Farmers Struggle With Labor Shortages Amid Immigration Crackdown -- Ask any farmer in California what keeps them up at night and we would guess that nearly all of them would list 'labor shortages' and 'water access' as their top two concerns.  Ironically,despite over 90 million American citizens choosing to sit out of the labor force and California having one of the highest minimum wage rates in the country, farmers in the Golden State struggle every year to find enough labor to keep fruits and vegetables from literally rotting on the vine.  Meanwhile, as the new administration promises to crack down on illegal immigrants, farmers are feeling the labor shortages in 2017 more than ever.  As the Wall Street Journal notes today,many farmers have turned to the H-2A agricultural visa program to recruit temporary workers from Mexico but the process is generally described as "bureaucratic, costly and time-consuming."In the first nine months of fiscal 2017, which began Oct. 1, the U.S. Labor Department certified more than 160,000 temporary workers—the bulk of them from Mexico—to harvest berries, tobacco and other crops in the U.S. under the H-2A agricultural visa program. That was up 20% from the period a year earlier.The annual issuance of H-2A visas nearly doubled from 85,248 in fiscal 2012 to 165,741 in 2016. The U.S. doesn’t cap the number of these visas.Outside of agriculture, use of another type of seasonal-work visa also has surged in response to increased U.S. deman d for unskilled laborers such as hotel housekeepers. The Department of Homeland Security in July raised the annual cap on H-2B visas by more than 20% to 81,000. The majority of workers receiving this type of visa also are from Mexico.

The Danger From Low-Skilled Immigrants: Not Having Them – NYTimes - Let’s just say it plainly: The United States needs more low-skilled immigrants. You might consider, for starters, the enormous demand for low-skilled workers, which could well go unmet as the baby boom generation ages out of the labor force, eroding the labor supply. Eight of the 15 occupations expected to experience the fastest growth between 2014 and 2024 — personal care and home health aides, food preparation workers, janitors and the like — require no schooling at all. “Ten years from now, there are going to be lots of older people with relatively few low-skilled workers to change their bedpans,”  “That is going to be a huge problem.” But the argument for low-skilled immigration is not just about filling an employment hole. The millions of immigrants of little skill who swept into the work force in the 25 years up to the onset of the Great Recession — the men washing dishes in the back of the restaurant, the women emptying the trash bins in office buildings — have largely improved the lives of Americans. The politics of immigration are driven, to this day, by the proposition that immigrant laborers take the jobs and depress the wages of Americans competing with them in the work force. It is a mechanical statement of the law of supply and demand: More workers spilling in over the border will inevitably reduce the price of work. This proposition underpins President Trump’s threat to get rid of the 11 million unauthorized immigrants living in the country. It is used to justify his plan to cut legal immigration into the country by half and create a point system to ensure that only immigrants with high skills are allowed entrance in the future. But it is largely wrong. It misses many things: that less-skilled immigrants are also consumers of American-made goods and services; that their cheap labor raises economic output and also reduces prices. It misses the fact that their children tend to have substantially more skills. In fact, the children of immigrants contribute more to state fiscal coffers than do other native-born Americans, according to a report by the National Academies. What is critical to understand, in light of the current political debate, is that contrary to conventional wisdom, less-skilled immigration does not just knock less-educated Americans out of their jobs. It often leads to the creation of new jobs — at better wages — for natives, too.

What’s Killing U.S. Productivity? America’s Narcissism Era. - Pam Martens - Yesterday, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, responded to a question concerned today’s lack of true innovation rather than just innovations in social media as follows: Kashkari: “This is a big complicated topic. A big question mark in the economics profession is why is productivity growth in the U.S. economy so low. It’s much lower than it has been in prior decades. And, we think, you pull out your iPhone or Twitter or Facebook – you think, wow, all this stuff is happening. Well, some experts say the things that we’re creating now – that we’re innovating now – just aren’t that impactful. They don’t really move the needle very much. So if you compare Facebook and Twitter, which seem pretty cool, to electricity or the internal combustion engine, or the airplane, it’s just not that important.” Kashkari is on to something significant but we have to differ with him in this regard: this is not really “a big complicated topic.” It’s a very basic concept: we are living in the most narcissistic era that America has ever experienced and it’s dragging down not only U.S. productivity but the country itself.Memorializing this era just last week was the unprecedented “Lazy Boy” cover of Newsweek, depicting the leader of the free world as a slouch, replete with the critical necessity of this era: the smartphone on his lap — which affords him instant narcissistic gratification to his Twitter followers. Walk on any bustling sidewalk today and you will observe a sea of pedestrian faces buried in their iPhone or some other digital device. These people are not likely thinking about creating the next internal combustion engine. They are posting personal photos to their Facebook page, Tweeting, sending selfies, checking out the latest cool restaurant, or simply gossiping with friends. Innovative minds have succumbed, on a mass scale, to digital hedonism. Putting self above country extends to the Wall Street analysts who have made easy money fueling this craze by putting out buy recommendations on the social media companies that make these products and the billionaire hedge fund owners who have crowded into these stocks, simply because it’s a lazy boy trade.

Foxconn’s Con: Seeking Whopping Subsidies for Wisconsin, Michigan Manufacturing Jobs…If They Happen -- Yves Smith - Trump got a splash of good press in July when Apple supplier Foxconn announced a plan to bring as many as 10,000 jobs to the Wisconsin and invest $10 billion over 5 years. He’d hinted at a manufacturing deal a few weeks earlier.However, given how states have fallen all over each other to give everything from auto plants to WalMart stores huge handouts, plus Wisconsin governor Scott Walker’s keen opposition to labor rights, there was every reason to doubt that this was much of a pro-worker development, or any kind of development other than PR. Techcrunch, in a late July story Foxconn’s long con, was dismissive:Foxconn CEO Terry Gou and President Trump recently announced a plan to bring 3,000 jobs to Wisconsin at what appears to be a flat screen manufacturing plant.The political press ate it up, alternatively excoriating the program for costing too much in tax breaks and crowing a win for Wisconsin’s conservative governor, Scott Walker.I wouldn’t encourage either party to hold their breath. Gou is in the habit of promising big and rarely delivering. Four years ago business journals crowed about a plan to bring a Foxconn flat screen manufacturing plant to Pennsylvania in 2013. The result? Foxconn opened an empty office in Harrisburg and nothing further has been done. This behavior is not new. Foxconn has signed letters promising to build factories in Indonesia (2013), Vietnam (2007), and Brazil (2011). None of these were completed according to the original pie-in-the-sky spec. Reuters had this to say about the Brazil adventure: When Taiwan’s Foxconn Technology Group agreed in April 2011 to make Apple products here, President Dilma Rousseff and her advisers promised that up to $12 billion in investments over six years would transform the Brazilian technology sector, putting it on the cutting edge of touch screen development. A new supply chain would be created, generating high-quality jobs and bringing down prices of the coveted gadgets. Four years later, none of that has come true…

500 Workers Staffing Facebook’s Cafeteria Just Voted to Unionize - Five hundred workers just voted to unionize at Facebook’s cafeteria contractor, Flagship, which represents some 10 percent of the total food-service workforce in Silicon Valley. The victory builds on other recent union wins at Intel and Google for cafeteria and custodial staff—vibrant organizing campaigns, led by UNITE HERE and the Teamsters, that combined with grassroots community outreach to establish solid union contracts in the bottom tiers of the freewheeling tech sector. Activists are demanding fair hours and wages, as well as secure benefits, union rights, and other basic entitlements for the front-line workers of the world’s leading tech brands.  Beyond workplace campaigns, UNITE HERE’s organizing with subcontracted cafeteria staff might uplift labor standards for food-service workers across the region, while galvanizing a community that includes women of color, immigrant workers, and budding community activists. Alongside these union eateries are the newly unionized shuttle-bus drivers, who are pushing back against an increasingly deregulated driver-for-hire workforce. Facebook’s shuttle-bus drivers recently negotiated a contract raising hourly wages by about 50 percent to $27.50, plus health benefits and five weeks of paid vacation.  Cafeteria workers embody the extreme inequalities of Big Tech’s economic dominion. Dining-hall servers generally earn less than $700 a week, and sink about two-thirds of each paycheck into monthly rent (median rent in Silicon Valley costs nearly $1,800). Whether they’re at Intel’s pasta bar or the local drive-through, food-service jobs mire workers in poverty and perpetuate racial segregation through poverty pay, erratic schedules, and unsafe working conditions.

De Blasio Proposes Tax on Wealthy to Fix New York City’s Crumbling Subways  - New York Mayor Bill de Blasio, a Democrat seeking re-election this year, proposed a tax on the wealthy to pay for repairs to the city’s deteriorating subway system. The plan would increase the city’s highest income-tax rate to 4.41 percent from 3.88 percent on earnings above $500,000 for individuals and $1 million for couples. The move would affect about 32,000 people and raise as much as $800 million a year, de Blasio said Monday. Most of the revenue would go toward fixing a mass-transit system that has been plagued in recent months by breakdowns and delays, contributing to the first decrease in ridership in more than 20 years. About $250 million would subsidize half-price fares for 800,000 New Yorkers living below the federal poverty line, said de Blasio, 56, whose re-election campaign has focused on making the city more affordable. “Rather than sending the bill to working families and subway and bus riders already feeling the pressure of rising fares and bad service, we are asking the wealthiest in our city to chip in a little extra to help move our transit system into the 21st century,” de Blasio said.

ACLU: Absent warrant standard, police could monitor anyone via location data - Lawyers representing a man convicted of six robberies in the Detroit area have now filed their opening brief at the Supreme Court in one of the most important digital privacy cases in recent years. This case, Carpenter v. United States, asks a simple question: is it OK for police to seize and search 127 days of cell-site location information (CSLI) without a warrant?Previously, lower courts have said that such practices are compatible with current law. But the fact that the Supreme Court agreed to hear the case suggests that at least four justices feel that perhaps the law should be changed.In Carpenter, as is the case in countless modern criminal cases, law enforcement was able to obtain the relevant records directly from the mobile phone provider with a court order that has less stringent requirements than a warrant. This is not a trivial distinction. A so-called "d-order" can be circumspect with how information is obtained by authorities. It does not, as the Fourth Amendment demands, require as much particularity. A warrant, unlike a d-order application, also mandates a signed and sworn affidavit ("on oath or affirmation"), as the Constitution requires, which describes the "places to be searched and the things to be seized." Carpenter's attorneys, many of whom are from the American Civil Liberties Union, argue in their filing that the current legal standard gives the government too much leeway. "If the Court were to accept this argument, the government could use this tool to monitor the minute-by-minute whereabouts of anyone—from ordinary citizens to prominent businesspersons to leaders of social movements," they wrote in their August 7 brief.

'Straight up bullshit': inmates paid $1 to clear homeless camps they once lived in - In many places in the US, the fraught job of clearing out a homeless encampment is given to professionals. In San Francisco, Los Angeles and New York, for example, the job often falls to city employees in public works or sanitation departments, who might get paid upwards of $16 an hour. But in Portland, which prides itself on being a paragon of progressive politics, inmates at the county jail get $1 a day – enough to buy a Butterfinger at the commissary – to do the work. Some of the inmates sifting through or dismantling homeless dwellings were previously homeless themselves, making for a bizarre merry-go-round. The job can make it feel as if their worlds are colliding.  Jeff Nelson was homeless for 13 years and on an inmate work crew for six months. He remembers dealing with a well-tended tent in Portland’s Hollywood neighborhood – like one he might have lived in himself.  “You looked in there, and the bed was all made, and family pictures, and that was someone’s home,” he said. “And they made us take that down, and throw it in the fucking trash. And it’s like, what are you doing?” He added: “It’s just straight up bullshit, but that’s the way the system rolls, and we have no choice [but] to roll with the system.  That system was on full display one recent morning. Two homeless women with cigarettes in their hands watched as an armored truck with flashing lights pulled up to their campsite. A sheriff’s deputy let out five jail inmates in orange jumpsuits, who grabbed trash-picking tools and plastic bags. “I don’t think it’s right,” said Amber, 25. “They don’t know if the inmate is going to have to see their partner, their mom, or someone they know.” Her friend, Heather, said she recently saw a work crew member with whom she had been intimate when he was homeless. “He was across the street cleaning my campsite,” she said. The sight made her despair. “I told him that I loved him,” she said.

 Private Prison Demands Small Town Give It 300 More Prisoners Or It Will Close Down - A small community in New Mexico is learning firsthand the consequences of relying on corporate industry to fuel your economy. In the case of Torrance County, it’s the private prison industry. From a July 25 article by the Santa Fe New Mexican:“The company that has operated a private prison in Estancia for nearly three decades has announced it will close the Torrance County Detention Facility and lay off more than 200 employees unless it can find 300 state or federal inmates to fill empty beds within the next 60 days, according to a statement issued Tuesday by county officials.”The closure of the prison would mean a loss of about $700,000 in annual taxes and utility payments for the town of Estancia, which has a population of 1,500. Surrounding Torrance County would see a loss of around $300,000.Incidentally, the county has no jail of its own, meaning the sheriff’s department would have to find new housing for the 50 to 75 people it arrests each month.“This is a big issue for us,” county manager Belinda Garland told the Santa Fe New Mexican.“It’s going to affect Torrance County in a big way.” The corporate entity that operates the facility, CoreCivic — formerly known as Corrections Corporation of America — is the second-largest private prison company in the nation.

How Smartphones Are Making Kids Unhappy – NPR -For the first time, a generation of children is going through adolescence with smartphones ever-present. Jean Twenge, a professor of psychology at San Diego State University, has a name for these young people born between 1995 and 2012: "iGen." She says members of this generation are physically safer than those who came before them. They drink less, they learn to drive later and they're holding off on having sex. But psychologically, she argues, they are far more vulnerable. "It's not an exaggeration to describe iGen as being on the brink of the worst mental health crisis in decades," she writes in a story in The Atlantic, adapted from herforthcoming book. And she says it's largely because of smartphones. Twenge spoke to All Things Considered about her research and her conclusions. This interview has been edited for length and clarity.

School Board Removes "Lynch" From The Name Of Three Schools Because It Was Deemed Offensive -- Every time that the absurdity of political correctness reaches a new peak in our culture, it’s easy to assume that it can’t get any worse. But if we’ve learned anything over the past few years, it’s that it can always get worse. For people who have their entire identity wrapped up in being oppressed and downtrodden, the limit to what they can be offended by is absolutely bottomless. Which is why it shouldn’t come as a surprise that a school board in Oregon recently voted to remove the name “Lynch” from several elementary schools. You can probably guess why. Lynch Meadows Elementary, Lynch Woods Elementary and Lynch View Elementary were all named after a local family who donated land to the school district in the late 1800s.  In recent years, school officials say they have received complaints from people who are concerned about the name’s connotation with lynching.‘There were an increasing amount of questions and some complaints from families of color around the name,’ Centennial School District Superintendent Paul Coakley, who is black, told the Oregonian.‘Our diversity is increasing every year, with families coming in from Northeast Portland and out of state, so [the names] needed to be looked at,’ he added.The fact that “Lynch” is an actual surname held by perhaps tens of thousands of people and has been around for hundreds of years, was of no consequence to the perpetually offended people who wanted these schools to change their names.

Fracking Brings Challenges to Local School Systems - School districts in the United States face special challenges when fracking operations draw new students to their communities and administrators have difficulty planning for resources and funding in cycles of boom and bust, according to a new study released on Thursday.The six-state study found that K-12 school districts adjacent to hydraulic fracturing sites do not fare any better economically than schools in non-fracking areas.Scholars from Resources for the Future, an independent, nonpartisan economic research organization, examined how school districts in Pennsylvania, Ohio, West Virginia, North Dakota, Montana and Colorado fared between 2000 and 2013.The conclusion was based on an evaluation of data and interviews from parents and students in the districts. The boom-and-bust cycle of the industry was found to create overwhelming stress on local districts as students and teachers were moving in and out of a region to meet the economic demands of drilling, study co-author Laura Zachary said in a webinar presentation Thursday. The student and teacher turnover rate, along with corresponding economic volatility in educational resources at the local level and an inability of local communities to absorb rapid economic fluctuations, created an uneven balance between costs and benefits, said Nathan Ratledge, the study's lead author."New teachers must be hired, and principals had to conduct long, expensive nationwide searches," Ratledge said at the web conference hosted by RFF and Penn State University. "High housing prices were a fact of life, and within two or three years, the new teachers used their experience and went back home. There was a consistently high turnover rate. This puts up red flags for student learning and also principals are constantly trying deal with the costs to restaff and retrain."

Reading, Writing And Fracking? What The Oil Industry Teaches Oklahoma Students – NPR - It's a Saturday at Choctaw High School, but for hundreds of Oklahoma teachers, there's a training class in session. Carrie Miller-DeBoer is among 14,000 teachers in Oklahoma being trained to instruct a K through 12 education curriculum funded by the oil and gas industry. The lesson plans, created by the Oklahoma Energy Resources Board, have been used in Kansas, and the overall model has been pitched to at least five other states. The program centers on teaching math and science through oil-centric lessons and labs. That includes things like calculating the mileage of tanker trucks, or the slope of pipelines.  "Half of our budget is restoration, half is education," says Dara McBee, communications director with the Oklahoma Energy Resources Board. Since the 1990s, the energy board – funded by oil and gas taxes – has spent $40 million on the education program. But an investigation by the Center for Public Integrity and StateImpact Oklahoma, a collaboration of local NPR member stations, reveals there's a blurry line between industry promotion and education. Documents show educators had some role in creating the plans, but it's unclear how the lessons are written and updated each year. The board's education director does not have a background in education or science. Here are just a few of those lessons:

College tuition hikes are finally slowing, thanks to simple economics -- After years of ear-popping climbs, the rate of US college tuition increases is finally slowing. Undergraduate and graduate tuition, which soared an average of 6% a year between 1990 and 2016, rose just 1.9% this year after scholarships and discounts are factored in, according to the Wall Street Journal (paywall), citing figures from the US Department of Labor. The increase is now comparable to the rate of inflation.The reason is simple supply and demand: There are fewer young people interested in college, while the number of available spots has stayed about the same.Some of that reduced demand is demographic. After a steady rise in the number of high-school graduates from 1995 to 2009, which helped fuel a 161% rise in private-college tuition, the number of 18- and 19-year-olds has declined 7%, from 9.1 million to 8.5 million, between 2009 and 2016.There’s also the lure of a paycheck. As the US economy approaches full employment, there are more jobs available, and wages for jobs that require minimal skills are beginning to rise. To get kids in their doors, colleges are lowering prices and competing with one another to offer scholarships, Don’t expect the stagnant pricing to last for long, though. There’s another huge wave of high-school seniors coming, with the class of 2025 expected to be the biggest ever, after a record 4.7 million births in 2007. If nothing else changes, colleges will again hold the power over supply and demand.

Surprise: The 1% Is Overrepresented in the Ivy League -- New research shows that access to elite colleges varies by parents’ income—reinforcing inequality across generations< If your parents count themselves among the top 1%, you’re 77 times more likely to attend an Ivy League college than your peers from families in the bottom 20% of the U.S.’ income distribution. So much for meritocracy and equal access. That’s according to the new research by Stanford economist Raj Chetty and co-authors. They show that 14.5% of students in America’s elite universities (eight Ivy League colleges, University of Chicago, Stanford, MIT, and Duke) are from families in the top 1% of income distribution, compared with only 3.8% from the bottom quintile. That’s a dramatic overrepresentation of the richest Americans.Why the focus on Ivy League universities? Of course, the pool of top institutions of higher education extends far beyond that group. But in mobility terms, say the authors, you’re more likely to move from the bottom quintile into the top 1% if you attend elite colleges, including those that comprise the Ivy League. In other words, elite colleges can confer mobility in powerful ways.The study’s authors point out that most colleges successfully manage to level the playing field, narrowing the post-graduation income gap between students from different family backgrounds by the time they reach their early-to-mid 30s. But shares of students from low-income families at institutions with some of the highest mobility rates, including SUNY-Stony Brook and Glendale Community College, declined sharply in the last decade, indicating that amid rising costs, colleges that offer the best pathways to success are getting out of reach for poorer families. The authors’ investigation into the role of higher education in fostering (or hindering) intergenerational mobility in the U.S. builds on previous work in a similar vein. Last year, in a study titled “The Fading American Dream”, Chetty and other scholars showed that the proportion of Americans who earn more their parents, adjusting for inflation, fell from 90% for children born in the 1940s to 50% for those born in the 1980s. Their work underscores serious threats to the so-called American Dream, the cornerstone of which is faring better than the previous generation.

Liberal colleges are recruiting conservative professors to 'stir up some trouble' - When Steven Hayward stepped onto the University of Colorado Boulder campus he saw event postings for the transgender community. He saw ads for vegan and gluten-free products.   This was 2013, and to him this was the lion's den. He started documenting his findings on Facebook, like a conservative anthropologist. “Whoa. What's this crunchy sound ringing in my ears?” he wrote next to a photo he took of a woman he perceived to be dressed in a bizarre fashion. “Yeah, this is a look I haven't seen before.” Hayward called Boulder a “self-generated bubble” and mocked administrators for advising professors to address students according to their desired gender pronoun. Boulder administrators said nothing. They wanted him there. A year earlier they’d recruited Hayward, a conservative academic, precisely because his views challenge the campus' predominant orthodoxy. Alumni had been complaining that the school lacked political diversity. Some thought conservative students felt unwelcome. Administrators responded, and Hayward’s position as the school’s first "visiting scholar in conservative thought" was born. So Boulder began to look for someone on the right who’d come teach on its campus. It even took out advertisements in conservative magazines. The school now welcomes a new professor each year.  What's developed is a kind of affirmative action for conservative professors that's starting to spread across the country.

Table of the day: Bachelor’s degrees by field and gender for the Class of 2015 -– AEI - The table above shows the number of bachelor’s degrees by field and gender for the College Class of 2015, ranked by the female share of each field (based on Department of Education data here). A few observations:

  • 1. Overall, women earned 56.44% of all bachelor’s degrees in 2015, which means there were 130 women graduating from college that year for every 100 men. Women now have an uninterrupted 35-year record of earning the majority of bachelor’s degrees in the US that started back in 1982.
  • 2. Women earned about 59% of degrees in biology, which is one of the fields in the STEM area that we hear so much about in terms of female under-representation. And actually, if you include health professions as a STEM field, women actual earn more STEM degrees than men. Or if you count biology, mathematics, and physical sciences, women earn a majority (53%) of those degrees. It’s really only when you include engineering and computer science that men have an overall majority of STEM degrees.
  • 3. Now that Google is in the media spotlight for one of its engineer’s diversity memo, it’s interesting to note that the female share of computer science degrees (18%) is about the same as the female share of Google’s tech jobs (20%). And the female share of Google’s not-tech jobs (48%) is about the same as the female share of business bachelor’s degrees (47.4%), assuming that a business degree might be the most common college degree required for those positions.
  • 4. Note the wide variation in degrees by gender shares. Women earn the large majority of degrees in health professions, psychology, education, English and communication, and men earn the large majority of degrees in engineering, computer science, and theology.

Public Pension Funds Regain Some Lost Ground in a Good Year, But CalPERS Lags Peers - Yves Smith - The markets giveth and the markets taketh away. This was one of those “markets giveth” years, to the considerable benefit of underfunded public pension funds. In a post going up soon, they also got a break from beneficiaries having the good taste to die sooner, but that does not yet seem to be reflected in their actuarial estimates.However, CalPERS was a laggard, which does not reflect at all well on them. CalPERS is the envy of other public pension funds by virtue of having a large in-house staff and being able to afford consultants galore without incurring undue costs in relation to its fund size. It is big enough to further shave costs by running large in-house index funds and managing much of its bond investing internally. So what gives? CalPERS is sure to try to blame all the scrutiny it has gotten, which has the causality backwards. CalPERS would not be the target of regular criticism if it had its ducks in a row. More specifically, CalPERS has a clearly unqualified Chief Investment Officer and a CEO who lacks a college degree and does not appear to have gotten much specialized training in finance, accounting, or economics to compensate for that shortcoming, certainly not enough for her to have attained any certifications.  Even more important, the weaknesses at the staff level are the direct result of a successful campaign by the former CEO Anne Stausboll to neuter the board. It’s simply perverse that state officials have allowed this to be the remedy for a pay to play scandal where the CEO, Fred Buerostro, was taking bribes and is now serving a four and a half year term in Federal prison. John Chiang is particularly culpable for enabling this power grab by staff, since who has held one of the two most powerful seats on the board since 2007, first as state controller, then as state treasurer, before the pay to play scandal was unearthed.

Legg Mason Survey Finds Baby Boomers Are Roughly $30 Trillion Short On Retirement Savings --There are roughly 76 million Baby Boomers in the United States that are about to transition out of the highest wage earning years of their lives and into retirement where they'll be making precisely nothing.  Unfortunately, as MarketWatch points out today, those Baby Boomers are woefully unprepared for what awaits them.According to Legg Mason, the average Baby Boomer needs roughly $650,000 to fund their retirement years but have only managed to save about about $250,000 in their defined contribution plans.  Now, while equity markets don't seem to think this is a big deal, someone will eventually have to cover that $30 trillion shortfall...and, we suspect that's a funding hole that even the American taxpayers can't cover.Baby boomers, or those born between 1946 and 1964, expect they’ll need $658,000 in their defined contribution plans by the time they retire, but the average in those employer-sponsored plans is $263,000, according to a survey of 900 investors by financial services firm Legg Mason. Older boomers, who are 65 to 74, have an average of $300,000. Their asset allocation for all of their investments are also conservative, according to QS Investors, an investment management firm Legg Mason acquired in 2014, with 30% in cash, 24% in equities, 22% in fixed income, 4% in non-traditional assets, 8% in investment real estate, 2% in gold and other precious metals and 8% in other investments. “They have less than half the assets they hope to have in retirement,” said James Norman, president of QS Investors. “That’s a pretty big miss.”

Neoliberalism’s “Die Faster” Is Helping Pension Funds…But Not Doing Enough for Young Homebuyers --  Yves Smith  --One of Lambert’s principles of neoliberalism, up there with “Because markets” is “Die faster”. It’s now playing out as US life expectancy hasn’t just stalled out but has actually declined as older people are shuffling off the mortal coil at a faster rate. But in our best of all possible worlds, Bloomberg tells us that this is a Good Thing because it’s helping reduce pension fund underfunding, since actuaries had assumed increasing lifespans. No joke, the headline is Americans Are Dying Younger, Saving Corporations Billions. From Bloomberg: Steady improvements in American life expectancy have stalled, and more Americans are dying at younger ages. But for companies straining under the burden of their pension obligations, the distressing trend could have a grim upside: If people don’t end up living as long as they were projected to just a few years ago, their employers ultimately won’t have to pay them as much in pension and other lifelong retirement benefits.In… The fact that people are dying slightly younger won’t cure corporate America’s pension woes—but the fact that companies are taking it into account shows just how serious the shift in America’s mortality trends is…As you can see from the chart, the decline is recent, but the underlying causes have been grinding along for some time, like termites eating away at a foundation. Neoliberalism seeks to treat people as isolated actors operating in impersonal markets. Therefore social relations, like involvement in one’s community, attachments to colleagues at work, or even one’s family (caring for an aging parent, not moving to pursue a “better” job because it would be bad for the kids), are seen as secondary. If you make enough money (as in are a winner at playing the neoliberal game), these things are all supposed to take care of themselves.

Trump's moves are causing health insurance premiums to jump, study says - Actions by the Trump administration are triggering double-digit premium increases on individual health insurance policies purchased by many people, according to a nonpartisan study.  The analysis released Thursday by the Kaiser Family Foundation found that mixed signals from President Trump have created uncertainty “far outside the norm” and led insurers to seek higher premium increases for 2018 than would otherwise have been the case. Republicans in Congress have not delivered on their promise to repeal and replace the Obama-era Affordable Care Act. Trump is insisting that lawmakers try again and that Obama’s signature health overhaul is collapsing. At the same time, he has threatened to stop billions of dollars in payments to insurers. Some Republicans are considering fallback measures to stabilize markets. Kaiser researchers looked at proposed premiums for a benchmark silver plan across major metropolitan areas in 20 states and Washington, D.C. Overall, they found that 15 of those cities will see increases of 10% or more next year. The highest is a 49% jump in Wilmington, Del. The only decline: a 5% reduction in Providence, R.I. About 10 million people who buy policies through HealthCare.gov and state-run markets are potentially affected, as are 5 million to 7 million who buy individual policies on their own. Most of those in the government-sponsored markets can dodge the hit with the help of tax credits to help pay premiums. But off-marketplace customers pay full freight, and they face a second consecutive year of steep increases. Many are self-employed business owners. The report found insurer participation in the Affordable Care Act markets will be lower than at any time since they opened for business in 2014. The average is 4.6 insurers in the states studied, down from 5.1 insurers this year. In many cases insurers do not sell plans in every community in a state.

‘May you die in pain’: Another GOP lawmaker grilled at health-care town hall  - WaPo. The people of California’s 1st Congressional District made their congressman see red Monday morning. Like other Republican lawmakers before him, Rep. Doug LaMalfa (Calif.) held a town hall on the ongoing health-care debate and the effort, led by President Trump and the GOP, to repeal and replace the Affordable Care Act. And like some of his colleagues, LaMalfa was met with boos, catcalls and verbal barbs shouted from the 400-person-strong audience at the Chico Elks Lodge in Northern California, recorded on video and audio by North State Public Radio. It was the most recent of a declining number of health-care-focused town hall meetings charged by emotional pleas and debates between constituents and their representatives, meetings that have sparked anxiety among GOP lawmakers heading home to face tough questions.The audience was armed with blunt questions, harsh comments and red placards they used to signal their disapproval of audience queries or LaMalfa’s responses. Green cards were used to show approval. LaMalfa saw his fair share of red over his responses. He did not help himself, occasionally veering into sarcasm over concerns ranging from health care to climate change. Out of a sea of moments threatening to boil over, one stood out as particularly tense.“I think that your vote to throw 22 million people off of health is reprehensible and in the service of the rich,” a resident told LaMalfa on his efforts to defund Planned Parenthood.“I hope you suffer the same painful fate as those millions that you have voted to remove health care from. May you die in pain,” he added.The comments drew a stream of groans from the audience in a rare moment of sympathy for LaMalfa.

Large employers say health plans will cost more than $14,000 for an employee in 2018 -- Large employers say the cost of health-care plans will grow 5 percent next year, to an average cost of more than $14,000 per employee. The increases, reported in a new survey of 148 large companies, were attributed largely to expensive specialty drugs and individuals with high medical costs.The average 5 percent hike is modest in comparison to the double-digit premium increases that insurers that sell plans in the Affordable Care Act marketplaces have been requesting, citing the financial challenges of the marketplace and threats by the White House to discontinue federal subsidies."It’s the fifth year in a row that employers are saying their costs will rise 5 percent. It’s not great, because it's still multiples of wage increases and general inflation ...  but it’s not the volatility you’re seeing in the public exchanges," said Brian Marcotte, president of the National Business Group on Health, a nonprofit organization whose members are large employers, including 73 Fortune 100 companies.According to the survey, employers will shoulder approximately 70 percent of those health costs, leaving employees on the hook for an average of $4,400, through premiums, out-of-pocket costs and contributions to health savings accounts. The survey found that an ongoing shift toward high-deductible plans will continue, with 40 percent of employers offering one as the only plan option next year -- an increase from last year. Nearly all employers -- 90 percent -- will offer at least one high-deductible plan in 2018.

Americans Pay More For Prescription Drugs Because Our Politicians Take Bribes From Pharmaceutical Companies -- For me, one of the worst-- and longest lasting-- side effects from chemotherapy is peripheral neuropathy. I'll spare you the details but it's gotten worse, and continues to get worse, with time. Yesterday, my doctor told me that there are ongoing studies that show an anti-convulsive compound, lacosamide, which is used to treat epilepsy and seizures, has been effective for some people in treating peripheral neuropathy. She told me that one of her patients had lost the ability to walk and that once he started using lacosamide he began walking again. So... she wrote me a prescription and my insurance company, Humana, said NO. That's what they do... and my doctor is fighting with them as I write this post. Without the insurance the drug, marketed as "Vimpat," would cost me $540/month. I looked the same drug up on Canadian and U.K. websites and found that it costs $187.38 in the U.K. and $236.22 in Canada. That's a lot of dough. A year's worth in the U.S. would be $6,480. A year's worth from Canada would be $2,834.64. That's $3,645.36 right out of my pocket just because conservatives in Congress allow pharmaceutical companies to rip off Americans in return for huge annual contributions to their careers, otherwise known to anyone with two IQ digits to rub together as bribery. First, the dozen worst enablers of the drugs companies among current members of Congress, based on the amount of pharma bribes since 1990:

• Orrin Hatch (R-UT)- $2,564,441
• Richard Burr (R-NC)- $1,512,262
• Anna Eshoo (D-CA)- $1,502,561
• Fred Upton (R-MI)- $1,406,006
• John McCain (R-AZ)- $1,224,519
• Frank Pallone (D-NJ)- $1,147,905
• Mitch McConnell (R-KY)- $1,098,622
• Paul Ryan (R-WI)- $1,053,483
• Erik Paulsen (R-MN)- $1,004,329
• Roy Blunt (R-MO)- $998,106
• Kevin McCarthy (R-CA)- $995,125
• John Shimkus (R-IL)- $981,583

 Pritzker, Pawar unveil health insurance plans - Two Democratic candidates for governor today rolled out health care insurance plans that seize on a red-hot national topic but lack some big details. Chicago businessman J.B. Pritzker proposed a "public option" plan that would allow anyone in the state to buy into Illinois' current Medicaid program. And rival Ald. Ameya Pawar, 47th, unveiled an even more ambitious program: a single-payer system that would effectively abolish private health insurance in favor of a government-run system that covers everyone. Pritzker said his plan, based on an idea that didn't make it into Obamacare, would allow the state to act as its own real-life laboratory, testing ideas to extend affordable coverage to more people. "With Donald Trump in the White House and Republicans in control of the House and Senate, it's now up to the states to innovate," he said. Pritzker said a full actuarial analysis would have to be done, but in a statement he indicated a universal Medicaid program would be cost competitive with offerings by the private insurance market, and likely come in at around what Illinois now pays for those with Medicaid: $3,350 a year per adult and $2,108 for each child. Pawar, in his own statement, said a Pritzker-style public option "doesn't go far enough to provide quality health care for everyone while lessening the burdens put on working families and small businesses. Illinois needs single-payer health."  He cited findings by liberal research groups that such a system could save $17 billion a year in insurance fees and costs, but he did not indicate how he would pay for his program.

Is Part of the Health-Insurance Market Entering a Death Spiral? - After four open enrollments for the Affordable Care Act (ACA) — all of them during the Obama administration save for the last ten days of the most recent one — the question of stability in the individual-health-insurance market has become an issue. Many ACA advocates argue that the market is now reaching stability because the medical-loss ratio — the percentage of revenue from premiums that insurers must pay out as medical benefits – is headed toward an acceptable level for many companies. Things may well be looking more stable if insurance-company profits are the only measure. As I pointed out in a recent op-ed at CNBC, health plans know that subsidized individuals are immune to any sharp increases; Obamacare caps such individuals’ premiums at a given percentage of their income so long as they buy one of the two lowest-priced plans. The result is that, desperate to stem their losses and with no regulatory or legislative relief on the horizon, insurers will just keep raising their rates until they are in the black — something last year’s big rate increases are beginning to achieve.The problem is that the unsubsidized market is not immune from premium increases. Those buying insurance without subsidies have to pay the full price out of their pockets.If the insurance companies can take some hope from their bottom lines, what about the people the Affordable Care Act was intended to benefit? A recent report by Mark Farrah and Associates (MFA), based upon state insurance regulatory filings as well as federal data, now provides us with a more complete picture.The report is particularly valuable because it encompasses all 50 states and the District of Columbia. It also covers the entire individual-health-insurance market — on- and off-exchange, including what the federal government estimates are 1.6 million to 2.6 million non-ACA-compliant policies. It also reflects the condition of the market prior to the recent mischief by the Trump administration to undermine it.Some key findings:

  • As of March 2017, the individual insurance market totaled 17.6 people.
  • That is down from 20.2 million one year prior. This is a decrease of 2.6 million people, a 13 percent drop in the size of the overall individual-health-insurance market.
  • 12.2 million bought their health insurance on the state- and federally run Obamacare exchanges.
  • 5.4 million people bought their insurance off of the Obamacare exchanges.

Death Spiral: 6.5 Million People Choose To Pay Tax Rather Than Buy Obamacare -- For those who still aren't convinced that Obamacare is trapped in an inescapable death spiral that will inevitably end in nothing short of an epic collapse of the federal and state health insurance exchanges, perhaps you should consider the following facts from the National Review and Mark Farrah and Associates.

  • -  Four heavily promoted open enrollments have taken place run by the Obama administration and the state exchanges.
  • -  Federal law has required people to purchase insurance or pay a fine — and the individual mandate was administered through 2016 by the Obama administration. In fact, in 2015, 7.5 million people paid the fine, while 6.5 million paid the fine in 2016, according to the IRS.
  • -  Every one of the people in the insurance market earning less than 400 percent of the federal poverty level were eligible for premium assistance — and those below 250 percent of the poverty level were also eligible to have their deductibles and co-pays subsidized.
  • -  After all of this, only about 40 percent of those eligible for subsidies have signed up for coverage. In what other business or government program would such a dismal acceptance by those it was targeted to serve be considered a success?
  • -  The number of insurance companies participating is on track to shrink by 38 percent in 2018.

And then there is the chart below...if people really saw "value" in Obamacare wouldn't you expect that more than 2% of the people who don't qualify for subisidies would sign up? Finally, I will suggest the real test of whether a health-insurance program is stable is whether the consumers for whom it is intended believe that it provides them with value. Here is a chart of the take-up rate on the federal exchanges under the Affordable Care Act; excluding the “Over 400%” category, all of these individuals are eligible for subsidies. This chart represents data from last year, but with only a 4 percent reduction in those purchasing on the exchanges between 2016 and 2017, it should remain a fair indication of consumer approval of the program.

Bottom of the canal: Pfizer’s billion-dollar tax ploy - Pharmaceutical giant Pfizer has engaged in a series of paper transactions to create a A$936 million loss in Australia. It is, for all intents and purposes, a billion-dollar exercise in tax avoidance. Pfizer and its auditor KPMG, the “Big Four” global accounting firm, refused to comment on the transactions or to defend them when presented with questions by this columnist. Pfizer was contacted on numerous occasions and refused. Both parties refused to return emails and phone calls.These are transactions housed within a byzantine corporate structure. We will outline, in brief, the series of transactions with Pfizer associates in the Netherlands which led to this “bottom of the canal” tax scheme, then provide the background to the company’s activities. 2011: Pfizer Australia Investments Pty Ltd issues $728 million in shares to Pfizer companies in the Netherlands, the US and Luxembourg. Pfizer Australia Investments (PAI) then uses the cash from this share issue to buy two subsidiaries incorporated in the Netherlands. These are called Pfizer Australia Investments B.V. and Pfizer Pacific Cooperatief U.A. There is no record of these two companies in Pfizer’s global accounts before December 31 2010.2014: PAI issues more shares and invests another $208 million in the two Dutch companies. This brings the total investment in these companies to $936 million.  By the end of 2014, the Dutch subsidiaries have been liquidated with zero return for PAI. The financial effect of this round-robin transaction is that share capital of $936 million has been created in Pfizer’s Australian entity and losses of $936 million are recorded in Australia.

Guess Who’s Tracking Your Prescription Drugs? -- As drug overdose deaths continue their record climb, Missouri last month became the 50th state to launch a prescription drug monitoring program, or PDMP. These state-run databases, which track prescriptions of certain potentially addictive or dangerous medications, are widely regarded as an essential tool to stem the opioid epidemic. Missouri Gov. Eric Greitens last month announced he was creating one in what had been the lone holdout state; legislative efforts to establish a program there had repeatedly failed because of lawmakers’ concerns about privacy.   Their concerns were not unfounded.  Federal courts in Utah and Oregon recently ruled that the Drug Enforcement Administration, in its effort to investigate suspected drug abusers or pill mills, can access information in those states’ PDMPs without a warrant, even over the states’ objections. And last month in California, the state supreme court ruled that the state medical board could view hundreds of patients’ prescription drug records in the course of its investigation of a physician accused of misconduct. “Physicians and patients have no reasonable expectation of privacy in the highly regulated prescription drug industry,” District Judge David Nuffer wrote in the Utah case. In 27 states, investigators must get a warrant or ask a court or grand jury for permission to access the information, according to the PDMP Training and Technical Assistance Center at Brandeis University.

Rural America's Childbirth Crisis: The Fight to Save Whitney Brown - Since the start of the century, it has become more dangerous to have a baby in rural America. Pregnancy-related complications are rising across the U.S., and many require specialized care. For some women, the time and distance from hospitals with the resources and specialists to handle an obstetric emergency can be fatal.The rate at which women died of pregnancy-related complications was 64% higher in rural areas than in large U.S. cities in 2015. That is a switch from 2000, when the rate in the cities was higher, according to Centers for Disease Control and Prevention data analyzed by The Wall Street Journal.The reasons reflect shrinking resources, worsening health and social ills. Most rural hospitals don’t have high-risk pregnancy specialists who can treat sudden complications. Many don’t have cardiologists or anesthesiologists on staff. Making matters worse, rates of obesity, a major risk factor for pregnancy complications, are higher in rural than urban areas.Many rural hospitals have eliminated labor and delivery services, creating maternity deserts where women must travel, sometimes hours, for prenatal care and to give birth.The number of rural hospitals that offered such services fell by 15% from 2004 to 2014, the Journal found in an analysis of Centers for Medicare and Medicaid Services data. That compared with a 5% decline among urban and suburban hospitals. Driving the changes are factors including closing of medical facilities, a decline in birthrates and the difficulties of getting malpractice insurance.  There are reported cases of pregnancy-related deaths that might have been avoided if the women were closer to hospitals with a higher level of care, said William Callaghan, chief of the maternal and infant health branch at the CDC. Some women in rural Tennessee get no prenatal care, said C. David Adair, a professor and maternal-fetal medicine specialist at the University of Tennessee College of Medicine in Chattanooga who cared for Ms. Brown. This article is based on interviews with doctors who cared for Ms. Brown and family members, as well as a review of her medical records.

Police Seize Enough Fentanyl "To Kill Half Of NYC" In Recent Bust -- The opioid crisis is killing tens of thousands of Americans a year as powerful synthetic drugs like fentanyl are increasingly mixed in with the heroin supply, killing unsuspecting addicts in greater numbers. These lab-manufactured opioids and their pharmacological cousins are so powerful, a 20-pound mixture of fentanyl and heroin that was recently seized by law enforcement was said to contain enough of the narcotic to kill half of New York City’s 9 million residents, according to one Drug Enforcement Administration agent who spoke with Consumerist.The drugs were taken when DEA agents busted a heroin mill operating out of an apartment across the street from Central Park. Police arrested four men, including one who was posing as an Uber driver, for their alleged involvement in the drug-distributing ring. According to NYC’s department of Health and Mental Hygiene, fentanyl – which is 50 times more potent than heroin - is driving a spike in fatal overdoses, which reached an all-time high of 1,374 deaths in 2016, a 46% increase over 2015. Nationwide, the rate of drug-related deaths per 100,000 people peaked at 19.7 during the third quarter, up from 16.7 during the same period a year earlier, according to government data released Tuesday. The increase was driven largely by opioids, specifically fentanyl, carfentanil and other synthetics. Deaths from drug overdoses in the US are believed to have surpassed the 60,000 mark last year.

Drugs are killing far more Americans than we thought, new studies suggest- A new study suggests that the death toll from drug overdoses in America is much more severe than initially believed. In December, the CDC said 52,404 people had died from drug overdoses in 2015, with over 60% dying from opioids (prescription painkillers) and heroin. Overdose numbers have been rising for years, but new research published Monday in the American Journal of Preventive Medicine suggests that those rates were dramatically underreported. One reason for the gap? In many overdose cases, no specific drug is identified as the cause on the death certificate. Between 1999 and 2014, up to one in four drug overdose deaths had no single drug listed as the cause. That doesn't mean researchers who want to correct the figures are out of luck, however. Even in cases in which no specific drug is listed as the single cause of death, officials often do list at least one category of drug present in the person's body based on screenings they do at the time. For the latest study, the researchers used that information to correct the data they had on drug overdoses. Their findings were stark. Nationally, the "corrected" death rate (using the new paper's method) from opioid painkillers was 24% greater than reported rates in 2014; the rate for heroin was 22% higher. In the states where gaps between reported and actual death rates were greatest — Pennsylvania, Indiana, and Louisiana — the percentages differed by up to 108%. These results change the face of the US drug overdose epidemic substantially, as can be seen on the maps below. Reported overdose deaths for opioids and heroin are on the left; corrected deaths are on the right. Business Insider / Skye Gould The corrected figures suggest that deaths from opioids were much more concentrated in the Mountain states, Rust Belt, and Industrial North — extending to New England — as well as much of the South. Heroin deaths, on the other hand, were highest in the Northeast and Rust Belt.

Teen suicides now outnumber homicides —and smartphone use could ne playing a major role -  In 2011, for the first time in more than two decades, suicide began killing more teenagers than homicide. And according to research presented in a recent article in The Atlantic, excerpted from a book written by Jean Twenge, a psychologist at San Diego State University, smartphones and social media may deserve a lot of the blame. "As teens have started spending less time together, they have become less likely to kill one another," Twenge wrote, "and more likely to kill themselves." Over the past decade, psychologists have come to see a picture in which young, developing brains are pitted against the power of brightly colored notifications, relentless pocket vibrations, and addicting apps. A byproduct has been an increase in disorders such as depression and anxiety, which can sometimes be fatal. Twenge's research has indicated that while suicide rates aren't the highest they've ever been — that peak came in the early 1990s, before smartphones emerged — the proliferation of screen-based devices and social media has fundamentally changed how people interact for the worse.  On the one hand, social media allows teens — and anyone, for that matter — to communicate with lots of people at once. But as the MIT psychologist Sherry Turkle has said, that communication may not lead to connection. Something is getting lost, and psychology experts have surmised it's a feeling of closeness or comfort.

Contaminated Childhood: The Chronic Lead Poisoning Of Low-Income Children And Communities Of Color In The United States -- The water crisis in Flint, Michigan, revealed systemic government malfeasance that exposed an entire city population to lead-contaminated water. It also alerted the nation to the fact that lead poisoning remains endemic and threatens the livelihood of children across the country. The problem extends beyond Flint—a recent report identified more than 2,600 areas in the United States that have lead poisoning rates at least double those recorded during the peak of the Flint crisis.According to the American Healthy Homes Survey, conducted by the Department of Housing and Urban Development (HUD), more 23 million homes in the United States have one or more significant lead-based paint hazards, and an additional 37 million homes have lead-based paint that will become a hazard if not closely monitored and maintained. This means one in three homes with children younger than age six—the age group most vulnerable to lead poisoning—contain significant lead-based paint hazards. Outside the home, leaded gasoline and lead smelting plants have deposited dangerous levels of lead and other toxic contaminants in neighborhoods across the country. The medical and public health fields and numerous federal agencies agree: There is no safe level of lead in the blood. The effect of lead poisoning on major bodily systems is permanent, and no amount of clinical or public health intervention can reverse it. For this reason, the American Academy of Pediatrics (AAP) has consistently recommended the adoption of health-based policies that require the identification of lead hazards before a child is exposed to them. Despite knowledge of the permanent morbidities caused by lead poisoning, the overwhelming majority of laws follow a “wait and see” approach. With few exceptions, federal, state, and local policies only require lead hazard identification and remediation after a child develops lead poisoning. The AAP statement from more than 30 years ago still rings true today: “In effect, children are used as biologic monitors for environmental lead.

Brussels warns egg scandal could now involve seven countries - Brussels said today that eggs contaminated with the harmful chemical fipronil may have been sold in some seven countries, significantly escalating the geographical scope of the scandal.Dutch authorities said in late July that they had shut poultry farms after finding high levels of fipronil — an insecticide banned for use on farm animals because of its danger to human health — in batches of eggs.A Belgian company is under investigation for creating an illegal mite-killer containing fipronil. Belgium launched an investigation in June, but did not notify the European Commission until July. Germany, which receives Dutch egg shipments, launched its own investigation in July.European Commission spokeswoman Anna-Kaisa Itkonen today said that the Netherlands, Belgium and Germany warned other countries through the European Union’s food-safety alert system that they may have exported contaminated eggs to them. The Netherlands warned Sweden that it had sent it eggs on August 4, while sending a similar warning to Switzerland on August 6. Germany, meanwhile warned on August 5 that it had distributed eggs to France and the U.K.“It’s up to the Swedish, Swiss and French authorities to check, because all these eggs are traceable,” Itkonen said.In the Netherlands, farmers have warned that the growing egg scandal could become even more damaging. Reuters reported today that a spokesman for Dutch farmers’ lobby LTO said that the fipronil scandal could force authorities to cull millions of chickens.

Contaminated egg scare: Waitrose and Sainsbury’s clear products from shelves  - The contaminated egg scandal is likely to be far bigger than regulators admit, supermarket sources warned last night. The Food Standards Agency (FSA) announced yesterday that the number of eggs to have entered Britain potentially containing a toxic insecticide was “closer to 700,000” than the 21,000 it confirmed four days ago. Waitrose, Sainsbury’s, Morrisons and Asda cleared their shelves of sandwiches, sandwich fillers, mayonnaise and salads that may contain imported eggs contaminated with fipronil, an insecticide used illegally on many Dutch and Belgian farms. On Monday the FSA had insisted that no affected products remained on sale.  Fipronil can cause nausea, vomiting, headaches and dizziness. Consumption of large quantities can harm the kidneys, liver and thyroid glands, although the regulator said that the affected eggs were unlikely to pose a risk to public health. Many will have been mixed with others from unaffected farms and any contaminant diluted. A supermarket source said that the number of products affected could rise as retailers discovered that more of the eggs had been used by their suppliers. He said that it was difficult to trace all the products because cheap imported eggs were used in food factories in vast quantities, including in powdered form.  The FSA’s inability to find out quickly how many eggs were involved shines a light on differing retailer standards for fresh eggs, which come from British farms and are clearly labelled as such, and eggs in food products. Yesterday the scandal brought political recriminations, raids and arrests in Europe. Belgium blamed the Netherlands, saying that it knew about fipronil in eggs as far back as November but failed to raise the alarm.

Your Tuna Can Carry 36 Times More Pollutants Depending on Where It Was Caught - According to new research from the Scripps Institution of Oceanography at the University of California San Diego, the levels of persistent organic pollutants (POPs) in the muscle tissue of yellowfin tuna caught in the more industrialized areas of the northeast Pacific Ocean and northeast Atlantic Ocean can be as much as 36 times higher than in tuna caught in pristine waters of the West Pacific Ocean.  POPs are of global concern because they can be resistant to degradation and can accumulate in the environment and organisms alike, meaning they can pass from one species to the other through the food chain. POPs include pesticides , flame retardants and polychlorinated biphenyls ( PCBs )—a banned and highly hazardous group of compounds once used for paints, electrical equipment and other products.   For the study , published in the journal Environmental Health Perspectives , researchers analyzed the containment levels of 117 yellowfin tuna caught around the world. While most of analyzed tuna would be considered safe under current consumption guidelines, the researchers noted that 90 percent of the tuna captured in the northeast Atlantic Ocean and more than 60 percent of those caught in the Gulf of Mexico contained pollutant levels that would have triggered health advisories for populations with increased risks of food-borne illnesses, including pregnant and nursing women or people with compromised immune systems.  -

'Industry Friendly' EPA Completes Review of 600 New Chemicals - The U.S. Environmental Protection Agency ( EPA ) announced it has eliminated a backlog of more than 600 new chemicals it is reviewing under the agency's new chemical safety program.  "I am happy to report that the backlog of new chemical reviews is eliminated," EPA Administrator Scott Pruitt said. The goal of the agency "is to ensure a new chemicals program that is both protective of human health and the environment, while also being supportive of bringing new chemicals to market."  But environmental groups accused the Trump administration for marching to the chemical industry's orders. Richard Denison, a lead senior scientist with the Environmental Defense Fund (EDF), said the EPA sidestepped the Frank Lautenberg Act , a critical environmental law signed by President Obama in 2016 that overhauled the "badly broken" Toxic Substances Control Act (TSCA) of 1976. The Lautenberg Act resulted in a temporary backlog of hundreds of new chemical notices. But in recent months, EPA staff have faced "relentless pressure from the chemical industry—and internally from new industry-friendly senior management—not only to speed up reviews, but to return the program to its pre-Lautenberg practices," Denison said. "While many details of the shifts EPA is making remain murky, EDF is concerned that EPA is moving away from the law's clear requirements that: EPA rigorously review both intended and reasonably foreseen uses of new chemicals and, where EPA identifies potential risks or lacks sufficient information, it issue an order imposing conditions on the manufacturer of the new chemical sufficient to mitigate the potential risk," Denison said.  The chemical industry cheered the EPA's announcement.

Polluter fines drop 60 percent under Trump - The Trump administration has collected 60 percent less from civil penalties for environmental wrongdoing than the administrations of presidents Barack Obama, George W. Bush and Bill Clinton did on average in their first six months in office. That’s according to an analysis by the Environmental Integrity Project, a nonprofit group founded 15 years ago by former enforcement attorneys at the Environmental Protection Agency.The administration has lodged 26 cases for violations of the Clean Air Act, Clean Water Act and other environmental laws (not including Superfund sites) and it collected $12 million in penalties from companies, the group said.  Clinton, Bush and Obama respectively lodged 45, 31, and 34 cases and collected $25 million, $30 million and $36 million in penalties. The Environmental Integrity Project said that the figures showed that the Trump administration is “off to a very slow start” when it comes to enforcing environmental law. It said that the cases this year “are smaller, requiring much less spending on cleanup, and resulting in fewer measurable reductions in pollutants that end up in our air or water.” The Trump administration also lags behind the three previous presidential administrations in the amount of injunctive relief and the amount of air pollution reductions. At the same time, the group warned that a six-month period does not provide enough data for definitive conclusions, and cases and settlements are often the result of years of efforts.

Dangerous Pollutants in Military’s Open Burns Greater Than Thought, Tests Indicate - Pro Publica - The federal government appears to have significantly underestimated the amount of lead, arsenic and other dangerous pollutants that are sent into the air from uncontrolled burning of hazardous waste at the Radford Army Ammunition Plant in Virginia, according to a draft of a long-awaited report compiled by researchers at the Environmental Protection Agency. The report details results from air sampling done last September and October at the Radford plant above an open field where piles of waste from the manufacture of weapons explosives are set afire daily. The plumes drift directly towards an elementary school and residents a little more than a mile away, but the Army and regulators have long maintained that the pollution level is safe, based on its computer-modeled estimates. Now, it turns out, some of those estimates were wrong. The data shows that five substances were found at levels greater than the EPA’s models had predicted, meaning that previous health-risk analyses completed by regulators for the burns at Radford did not fully take into account the potential exposure of the surrounding population. Arsenic, a chemical element known to cause cancer and skin lesions, was found to be emitted at rates 37 times what the previous Radford burn permit estimated. Lead — which can disrupt children’s brain development — was emitted at five times the level previously thought. Cadmium and silver were also present at levels higher than historical models had assumed. The tests also detected levels of methyl chloride, a chemical used in refrigeration and manufacturing that is known to cause severe neurological effects, high heart rates and high blood pressure, at more than twice the levels previously thought.

Poison Papers: Monsanto Knew PCBs Were Toxic for Years But Sold Them Anyway - Washington could have an ace up its sleeve in its major lawsuit against Monsanto over PCB (polychlorinated biphenyls) contamination throughout the state.  Before switching operations to agriculture, Monsanto was the primary manufacturer of PCBs, which was used for paints, electrical equipment and other products, from 1935 until 1977. The U.S. Environmental Protection Agency (EPA) banned PCBs in 1979 due to its link to birth defects and cancer in laboratory animals. PCBs can have adverse skin and liver effects in humans and can also linger in the environment for many decades.  But according to documents published by The Poison Papers project, a new online archive of more than 20,000 documents obtained from federal agencies and chemical manufacturers, Monsanto possibly knew as early as the 1960s—at least a decade before the federal ban—that PCBs were harmful to public health and the environment but continued to manufacture and sell the widely used product anyway.  Washington assistant attorney general Bill Sherman told the Guardian that the archive contained information the state was previously unaware of.  "If authentic, these records confirm that Monsanto knew that their PCBs were harmful and pervasive in the environment, and kept selling them in spite of that fact," he said. "They knew the dangers, but hid them from the public in order to profit."

 Just-Released Docs Show Monsanto “Executives Colluding With Corrupted EPA Officials to Manipulate Scientific Data” - Four months after the publication of a batch of internal Monsanto Co. documents stirred international controversy, a new trove of company records was released early Tuesday, providing fresh fuel for a heated global debate over whether or not the agricultural chemical giant suppressed information about the potential dangers of its Roundup herbicide and relied on U.S. regulators for help.More than 75 documents, including intriguing text messages and discussions about payments to scientists, were posted for public viewing early Tuesday morning by attorneys who are suing Monsanto on behalf of people alleging Roundup caused them or their family members to become ill with non-Hodgkin lymphoma, a type of blood cancer. The attorneys posted the documents, which total more than 700 pages, on the website for the law firm Baum, Hedlund, Aristei & Goldman, one of many firms representing thousands of plaintiffs who are pursuing claims against Monsanto. More than 100 of those lawsuits have been consolidated in multidistrict litigation in federal court in San Francisco, while other similar lawsuits are pending in state courts in Missouri, Delaware, Arizona and elsewhere. The documents, which were obtained through court-ordered discovery in the litigation, are also available as part of a long list of Roundup court case documents compiled by the consumer group I work for, U.S. Right to Know.It was important to release the documents now because they not only pertain to the ongoing litigation, but also to larger issues of public health and safety, while shedding light on corporate influence over regulatory bodies, according to Baum Hedlund attorneys Brent Wisner and Pedram Esfandiary. “This is a look behind the curtain,” said Wisner. “These show that Monsanto has deliberately been stopping studies that look bad for them, ghostwriting literature and engaging in a whole host of corporate malfeasance. They [Monsanto] have been telling everybody that these products are safe because regulators have said they are safe, but it turns out that Monsanto has been in bed with U.S. regulators while misleading European regulators.”

Monsanto Was Its Own Ghostwriter for Some Safety Reviews - Dozens of internal Monsanto emails, released on Aug. 1 by plaintiffs’ lawyers who are suing the company, reveal how Monsanto worked with an outside consulting firm to induce the scientific journal Critical Reviews in Toxicology to publish a purported “independent” review of Roundup’s health effects that appears to be anything but. The review, published along with four subpapers in a September 2016 special supplement, was aimed at rebutting the  2015 assessment by the International Agency for Research on Cancer (IARC) that glyphosate is a probable human carcinogen. That finding by the cancer-research arm of the World Health Organization led California last month to list glyphosate as a known human carcinogen. It has also spurred more than 1,000 lawsuits in state and federal courts by plaintiffs who claim they contracted non-Hodgkin lymphoma from Roundup exposure. Monsanto disclosed that it paid Intertek Group Plc’s consulting unit to develop the review supplement, entitled “An Independent Review of the Carcinogenic Potential of Glyphosate.” But that was the extent of Monsanto’s involvement, the main article said. “The Expert Panelists were engaged by, and acted as consultants to, Intertek, and were not directly contacted by the Monsanto Company,” according to the review’s Declaration of Interest statement. “Neither any Monsanto company employees nor any attorneys reviewed any of the Expert Panel’s manuscripts prior to submission to the journal.” Monsanto’s internal emails tell a different story. The correspondence shows the company’s chief of regulatory science, William Heydens, and other Monsanto scientists were heavily involved in organizing, reviewing, and editing drafts submitted by the outside experts. At one point, Heydens even vetoed explicit requests by some of the panelists to tone down what one of them wrote was the review’s “inflammatory” criticisms of IARC.

Monsanto Caught Ghostwriting Stanford University Hoover Institution Fellow’s Published Work: Newly-released documents, dubbed the Monsanto Papers, give the public a behind the scenes look into how far Monsanto will go to control public perception, news media and scientific research into the key ingredient in its Roundup product, glyphosate. The documents, which include internal emails and memos, reveals among other things, how Henry I. Miller, a Robert Wesson Fellow in Scientific Philosophy and Public Policy at the Hoover Institution at Stanford University, allowed Monsanto to ghostwrite an editorial he published in Forbes magazine and claimed as his own in 2015. The 2015 editorial attacked the decision by the International Agency for Research on Cancer, a branch of the World Health Organization, to classify glyphosate as a probable carcinogen. For two years, Miller was believed to be the writer of those words. But now, emails between Miller and Monsanto employees show the company wrote the piece and Miller added a couple of words to it prior to publication. Last month, California classified glyphosate as a carcinogen. Monsanto has vowed to fight that decision.

Scant oversight, corporate secrecy preceded U.S. weed killer crisis (Reuters) - As the U.S. growing season entered its peak this summer, farmers began posting startling pictures on social media: fields of beans, peach orchards and vegetable gardens withering away. The photographs served as early warnings of a crisis that has damaged millions of acres of farmland. New versions of the herbicide dicamba developed by Monsanto and BASF, according to farmers, have drifted across fields to crops unable to withstand it, a charge authorities are investigating. As the crisis intensifies, new details provided to Reuters by independent researchers and regulators, and previously unreported testimony by a company employee, demonstrate the unusual way Monsanto introduced its product. The approach, in which Monsanto prevented key independent testing of its product, went unchallenged by the Environmental Protection Agency and nearly every state regulator. Typically, when a company develops a new agricultural product, it commissions its own tests and shares the results and data with regulators. It also provides product samples to universities for additional scrutiny. Regulators and university researchers then work together to determine the safety of the product. In this case, Monsanto denied requests by university researchers to study its XtendiMax with VaporGrip for volatility - a measure of its tendency to vaporize and drift across fields. The researchers interviewed by Reuters said Monsanto provided samples of XtendiMax before it was approved by the EPA. However, the samples came with contracts that explicitly forbade volatility testing. "This is the first time I’m aware of any herbicide ever brought to market for which there were strict guidelines on what you could and could not do," 

Farmer vs. farmer - According to investigators, on Oct. 27, 2016, Mike Wallace, who farmed 5,000 acres of corn, soybeans and cotton near the Arkansas/Missouri border, arranged by phone to meet a farmhand named Allan Curtis Jones, 26, of Arbyrd, Mo., on West County Road 38 north of the Mississippi County town of Leachville to discuss Wallace's suspicions that the farm where Jones worked was the source of drifting dicamba that had damaged some of Wallace's crops. Wallace, who had been vocal in his opposition to the herbicide, had been quoted in an August 2016 story in The Wall Street Journal, telling the newspaper that at least 40 percent of his soybean crop had been damaged by drifting dicamba since June. He'd filed complaints twice with the Arkansas State Plant Board, the state agency that oversees claims of crop damage, about damage from drifting dicamba and had encouraged other farmers to report their damage as well.  When Wallace and Jones met outside of Leachville, Jones brought along his cousin and a gun. According to statements issued by Mississippi County Sheriff Dale Cook at the time of the shooting, Jones told investigators that an argument had ensued. In the midst of it, Wallace, who was not carrying a weapon, grabbed Jones by the arm. At that point, investigators say, Jones pulled away, pulled his pistol, and fired into Wallace's body until the magazine was empty. Wallace, a father of two who'd farmed in Mississippi County since he was a boy, was hit at least four times, and died in the dust on the south shoulder of the county road, with Jones' cousin using his shirt in a futile attempt to stop the bleeding. Jones soon was arrested on a charge of first-degree murder, and later released on $150,000 bond.

Toxic waste from U.S. pot farms alarms experts (Reuters) - Pollution from illegal marijuana farms deep in California's national forests is far worse than previously thought, and has turned thousands of acres into waste dumps so toxic that simply touching plants has landed law enforcement officers in the hospital. The volume of banned or restricted pesticides and illegally applied fertilizers in the woods dwarfs estimates by the U.S. Forest Service in 2014, when a top enforcement official testified that the pollution was threatening forest land in California and other states. California accounts for more than 90 percent of illegal U.S. marijuana farming, with much of it exported to other states from thousands of sites hidden deep inside forested federal land, and more on private property, law enforcement officials said. Growers use fertilizers and pesticides long restricted or banned in the United States, including carbofuran and zinc phosphide. In previous years, it was commonly sold fertilizers and pesticides that were used illegally, law enforcement officials said. Exposure to the pesticides has sent at least five law enforcement officials and two suspects to hospitals with skin rashes, respiratory problems and other symptoms, court documents and state data show.   According to unpublished data seen by Reuters, federal land in California contains 731,000 pounds of solid fertilizer, 491,000 ounces of concentrated liquid fertilizer and 200,000 ounces of toxic pesticides. If much of the pesticide and fertilizer were released into a single stream rather than scattered around the state in leaky containers, the volume would exceed the amount of chemicals spilled in 2014 into the Elk River in West Virginia, which left 300,000 residents without access to potable water.

Border district Dems raise alarm over environmental impact of wall - House Democrats representing districts along the U.S.-Mexico border expressed alarm on Friday that the Trump administration’s plans to waive certain environmental laws to build a wall could hurt wildlife. The Department of Homeland Security (DHS) announced earlier this week that it will use its authority under a 2005 law to bypass laws and regulations when necessary for enhancing infrastructure along the border. The waiver made public this week applies only to a 15-mile segment around San Diego. It exempts projects to build infrastructure like fencing or a wall from laws like the Endangered Species Act, Clean Water Act, National Environmental Policy Act and Safe Drinking Water Act.In a letter to Acting Secretary of Homeland Security Elaine Duke, Texas Democratic Reps. Vicente González and Beto O’Rourke asked whether DHS would give itself the authority to waive laws for other sections of the southwestern border. Specifically, the lawmakers worried that the Trump administration might seek to build a wall cutting through the Santa Ana Wildlife Refuge, which is located along the Rio Grande River. They described it as “one of the top bird-watching sites in the nation with more than 400 species of birds.” The refuge also serves as a habitat for half of all butterfly species in North America as well as the endangered ocelot and jaguarundi, according to its website. 

Gulf of Mexico ‘dead zone’ is the largest ever measured -- Scientists have determined this year’s Gulf of Mexico “dead zone,” an area of low oxygen that can kill fish and marine life, is 8,776 square miles, an area about the size of New Jersey. It is the largest measured since dead zone mapping began there in 1985.The measured size is close to the 8,185 square miles forecast by NOAA in June.  The annual forecast, generated from a suite of NOAA-sponsored models, is based on nutrient runoff data from the U.S. Geological Survey. Both NOAA’s June forecast and the actual size show the role of Mississippi River nutrient runoff in determining the size of the dead zone.This large dead zone size shows that nutrient pollution, primarily from agriculture and developed land runoff in the Mississippi River watershed is continuing to affect the nation’s coastal resources and habitats in the Gulf. These nutrients stimulate massive algal growth that eventually decomposes, which uses up the oxygen needed to support life in the Gulf. This loss of oxygen can cause the loss of fish habitat or force them to move to other areas to survive, decreased reproductive capabilities in fish species and a reduction in the average size of shrimp caught. A team of scientists led by Louisiana State University and the Louisiana Universities Marine Consortium collected data to determine the size of the dead zone during a survey mission from July 24 to 31 aboard the R/V Pelican.

Grading the Summer of 2017 Dead Zone News Stories -- Kay McDonald - About a week ago, you probably saw a headline proclaiming that meat is to blame for the large Gulf dead zone this year. The source of this proclamation was retired U.S. California House Member Henry Waxman’s Mighty Earth, a non-profit organization based in Washington D.C., a group I’d never heard of before. Let's dig deeper and see where Mighty Earth went wrong. Mighty Earth's article with the title, "New Investigation Identifies Companies Responsible for Massive Dead Zone in Gulf of Mexico - Tyson Foods, America’s Largest Meat Company, Leads Those Found to be driving massive Manure and Fertilizer Pollution" links to its in depth report titled "Mystery Meat II: The Industry Behind the Quiet Destruction of the American Heartland". This report states that "The domestic meat market consumes 70 percent of the soybeans grown in the U.S. and 40 percent of the corn, and is the biggest single market for both of these crops.” Does it take an unpaid blogger to notice this ludicrous statistical error? Since 50 percent of our soybeans are exported, more than 11 percent are used to produce biodiesel, and yet more to produce oil, obviously their claim that 70 percent of our U.S. grown soybeans are consumed by our domestic meat market is off base by a very, very wide margin. Who are this nonprofit’s fact checkers or do they have any?  Correcting that wrong "70%" soybean statistic would negate the main argument of Mighty Earth's entire paper, that is, no longer could they conclude that meat production is the predominant cause of the nutrient run off that causes the dead zone in the Gulf of Mexico. And they would have picked ADM as the largest corporation behind the dead zone for its leading role as an ethanol producer, instead of Tyson, or a well known seed company, or farm equipment maker, or the biggest fertilizer corporations, perhaps. The fourth sentence of Mighty Earth's report is “As demand for meat grows, America’s last native grassland prairies are being destroyed to make room for new industrial fields that exacerbate water pollution across the Heartland and take a heavy toll on the climate.” Since I was one of the first to break the story of CRP losses in the Midwest as a result of government policy and the RFS (Renewable Fuels Standard) program, I know that this statement, too, is highly misleading.

Corn Is Piling Up on Brazil's Farms –   Massive piles of corn stored in the open air. That’s the consequence of a huge corn crop in Brazil’s largest producing state, Mato Grosso."We’re seeing piles of corn stored in the open air because of a lack of storage capacity in the state," Endrigo Dalcin, the president of farmers group Aprosoja in Mato Grosso, said in a telephone interview. While Brazil has become one of the world’s most important crop producers, outdated infrastructure is placing some limits on its competitiveness. Unpaved, muddy roads have hampered grain transportation earlier this year, and storage squeezes are happening with more frequency after the nation’s farmers rapidly expanded production over the past decade. In Mato Grosso, storage capacity is only half of what is recommended as a safe margin by the United Nations’ Food & Agriculture Organization, according to Aprosoja. Storing corn in the open air means the grain is vulnerable to rot because of moisture and humidity. It also makes the supplies more susceptible to rodents and other pests. Right now, dry weather is minimizing damage risk. But rains will probably return in December, which will raise concerns over crop quality, Dalcin said. Farmers in the state are reaping 29.5 million metric tons of corn, up 55 percent from last season, according to a state agency. Local storage capacity is estimated at 33.5 million tons, Aprosoja figures that are based on Conab data show. Lack of room wouldn’t be a problem if producers didn’t still have soybeans in stockpiles from the recent harvest, which also produced a huge crop. "More than 5 million tons of corn must be taken out of Mato Grosso every month through December to avoid storage problems during the soybean harvest next year,"

Burn More Corn to Avoid Overproduction, Ethanol Leaders Say -  If farmers want to avoid a crisis from overproduction of corn, they and consumers need to urge fuel sellers to offer higher blends of ethanol.That’s one message a group of biofuels experts offered at the 2017 Iowa Ag Summit in Des Moines on August 5.“Every gallon we expand we’re taking away gallons from arguably the most powerful industry in the world,” said Brooke Coleman, executive director of the Advanced Biofuels Business Council, referring to the petroleum industry. That’s why the 2007 energy law that created the Renewable Fuel Standard was needed — to open up a market for biofuels.“We are not blessed with a free market in motor fuels. We have OPEC controlling price,” he said.Coleman is pleased with a court ruling that overturned an Obama administration EPA rule that limited expansion of biofuel blending on the basis of limited capacity to blend more. The Trump administration has returned the mandate for corn-based ethanol to 15 billion gallons for 2018 but has slowed incentives for advanced biofuels like cellulosic ethanol, he said.When the RFS was created, it was meant to be an incentive for oil companies to blend ethanol into gasoline; it was viewed as a floor starting at 10%, said Dave VanderGriend, president of ICM, a company that builds ethanol plants.“What it turned into is more of a celing,” VanderGriend said. The future looks bright for ethanol, he said, “if we can get the people out there demanding higher blends of ethanol at the pump.”  “There’s one thing that can soak up surplus grain right now, and that’s biofuels,” said Berven.

Plains drought as bad as some have seen  — Drought in North Dakota is laying waste to fields of normally bountiful food and hay crops and searing pastures that typically would be home to multitudes of grazing cattle. Some longtime farmers and ranchers say it’s the worst conditions they’ve seen in decades — possibly their lifetimes — and simple survival has become their goal as a dry summer drags on without a raincloud in sight. “We’ve never been in this sort of boat, honestly,” said Dawn Martin, who raises beef cattle with her parents and husband in the southwestern part of the state, an area the U.S. Drought Monitor says is in “extreme” drought. The drought’s impact likely will be felt not just by farmers but also consumers, state Agriculture Commissioner Doug Goehring said. Agriculture in North Dakota is an $11 billion a year industry, and the state leads the nation in the production of nearly a dozen crops. “It’s going to affect bread at the grocery store counter,” “Dry beans — navies, pintos — are going to be affected to a degree. Canola, that production is going to be cut, and that’s going to have an effect on vegetable oil.” The latest Drought Monitor map shows nearly all of western North Dakota in severe or extreme drought, conditions that extend into northern South Dakota and northeastern Montana. Most of the rest of North Dakota is in moderate drought or abnormally dry. John Weinand figures his wheat crop will be half what it usually is. As for his field peas, he expects to harvest fewer than 100 pounds per acre, compared with a typical 3,000 pounds per acre. He won’t even try to sell his barley; he’s already rolled it up into hay to feed his cows. 

Repeat droughts may cause permanent damage to forests: scientists | Reuters: - Trees and their environment need as long as two years to recover from drought in some places, and if a second dry spell hits before then, it may cause permanent damage to the landscape, researchers said on Wednesday. With climate change expected to bring more frequent and intense droughts, the implications for areas that do not have time to bounce back fully could be severe, the researchers said in a paper to be published in Nature journal this week. "That could have a double whammy effect," said co-author William Anderegg, assistant professor of biology at the University of Utah. "A second drought could be harder on an ecosystem and have the potential to push it off a cliff." In practice, that means affected areas could eventually turn from lush forest to a land of grass and shrubs. Boreal forests in northern parts of Europe, Russia and Canada can take up to two years to recover from drought, partly because they do not have a wide variety of plants, Anderegg told the Thomson Reuters Foundation. Forests in the tropics of South America and Southeast Asia have also taken the same amount of time to rebound. "That's worrisome because those regions store the largest chunks of carbon in ecosystems across the globe," Anderegg said.

Who really owns American farmland? - If you wanted to buy Iowa farmland in 1970, the average going price was $419 per acre, according to the Iowa State University Farmland Value Survey. By 2016, the price per acre was $7,183—a drop from the 2013 peak of $8,716, but still a colossal increase of 1,600 percent. For comparison, in the same period, the Dow Jones Industrial Average rose less than half as fast, from $2,633 to $21,476. Farmland, the Economist announced in 2014, had outperformed most asset classes for the previous 20 years, delivering average U.S. returns of 12 percent a year with low volatility. That boom has resulted in more people and companies bidding on American farmland. And not just farmers. Financial investors, too. Institutional investors have long balanced their portfolios by putting part of their money in natural resources—goldmines and coal fields and forests. But farmland, which was largely held by small property owners and difficult for the financial industry to access, was largely off the table. That changed around 2007. In the wake of the stock market collapse, institutional investors were eager to find new places to park money that might prove more robust than the complex financial instruments that collapsed when the housing bubble burst. What they found was a market ready for change. The owners of farms were aging, and many were looking for a way to get cash out of the enterprises they’d built. And so the real estate investment trusts, pension funds, and investment banks made their move. Today, the United States Department of Agriculture (USDA) estimates that at least 30 percent of American farmland is owned by non-operators who lease it out to farmers. And with a median age for the American farmer of about 55, it is anticipated that in the next five years, some 92,000,000 acres will change hands, with much of it passing to investors rather than traditional farmers.

11 Beaches Closed in Hong Kong After 9,000-Ton Palm Oil Spill -- Palm oil is not only disastrous for forests and its inhabitants but—as it turns out—it can also blight our waters and harm marine life. More than 9,000 tons of palm oil leaked from a cargo ship after a collision in mainland Chinese waters last week, prompting the closure of at least 11 beaches in Hong Kong, sightings of dead fish washing up on beaches and reports of rancid odors wafting from the rotting, congealed mess. According to the South China Morning Post (SCMP), the collision occurred on Thursday but mainland authorities waited until Saturday to report the incident. Hong Kong residents only learned of the spill on Sunday because of the beach closures. Environmental experts are questioning why the notification was delayed by two days.   "For some marine life, two days could be too late," Dr. Tsang Po-keung, an associate professor of science and environmental studies at the Education University of Hong Kong and a member of the government's Advisory Council on the Environment, told SCMP.  Palm oil is an edible form of vegetable oil that comes from pulping the fruit of oil palms. The product is found in everything from ice cream and crackers to detergents and cosmetics. But production of the ubiquitous oil is also known as one of the leading causes of rainforest destruction and among the biggest threats to iconic wildlife species, such as the Sumatran orangutan .

Hong Kong's Palm Oil Spill Is Wreaking Havoc on Marine Life - The Global Apollon was carrying 9,000 tons of raw palm oil and a substantial (unknown) amount of this was spilt into the surrounding waters. The Guangzhou authorities dispatched nine vessels to assist and contain from reports we have seen, yet the Hong Kong government claim that they were not told of the spill until Aug. 5. By the time the Hong Kong government found out, large amounts of this palm oil began washing up on Hong Kong's southern beaches.   Sea Shepherd became aware of the spill on Sunday after concerned citizens started asking what the white goo was and was it hazardous. The Hong Kong government had posted some very small (A4) printed notices at the Gazetted beaches but to this date has not issued any stronger public warnings. In fact the new Under-Secretary for the Environment, Tse Chin-wan has claimed that everything is under control and the spill poses no concern to public health.  During one of the patrols on the Amberjack vessel, Sea Shepherd documented fish feeding on the palm oil, almost in a "state of frenzy." It is still unclear as to how the palm oil will affect fish, however there have been an increased amount of dead fish washing up on the beaches.  While the palm oil itself is not hazardous to humans, the issue is the bacteria it collects that grows on it. The palm oil has a melting point of 35˚C so in the water remains in a solid form. When it hits the beaches or rocky coastlines it melts. We have found it seeping 4 inches into the sand where it then cools and regains a solid form. This does not bode well at all as it will then take 30 days or so to break down. Much is washed back out to sea, creating an oil slick that reduces oxygen levels in the water in much the same was as "red tide" events.

Nations Will Start Talks to Protect Fish of the High Seas — More than half of the world’s oceans belong to no one, which often makes their riches ripe for plunder. Now, countries around the world have taken the first step to protect the precious resources of the high seas. In late July, after two years of talks, diplomats at the United Nations recommended starting treaty negotiations to create marine protected areas in waters beyond national jurisdiction — and in turn, begin the high-stakes diplomatic jostling over how much to protect and how to enforce rules.“The high seas are the biggest reserve of biodiversity on the planet,” Peter Thomson, the ambassador of Fiji and current president of the United Nations General Assembly, said in an interview after the negotiations. “We can’t continue in an ungoverned way if we are concerned about protecting biodiversity and protecting marine life.” Without a new international system to regulate all human activity on the high seas, those international waters remain “a pirate zone,” Mr. Thomson said.  Lofty ambitions, though, are likely to collide with hard-knuckled diplomatic bargaining. Some countries resist the creation of a new governing body to regulate the high seas, arguing that existing regional organizations and rules are sufficient. The commercial interests are powerful. Russian and Norwegian vessels go to the high seas for krill fishing; Japanese and Chinese vessels go there for tuna. India and China are exploring the seabed in international waters for valuable minerals. Many countries are loath to adopt new rules that would constrain them. And so, the negotiations need to answer critical questions. How will marine protected areas be chosen? How much of the ocean will be set aside as sanctuaries? Will extraction of all marine resources be prohibited from those reserves — as so-called no-take areas — or will some human activity be allowed? Not least, how will the new reserve protections be enforced?

Bizarro Life-Forms Inhabiting Deep-Sea Vents May Be at Risk - On screen were thousands of tiny orange tube worms and dozens of other animals, some of which were new to science. The bizarre habitat gleamed in the lights of an underwater robotic probe as it explored the environs of a seafloor spring spewing water at superhot temperatures—known as a hydrothermal vent. What struck Goffredi, a marine biologist at Occidental College, along with the 10 other scientists onboard was how different the life-forms at this site, called the Pescadero Basin, looked from those at a neighboring site. Some 75 kilometers away in the same gulf, vents within the Alarcón Rise also hosted masses of tube worms, only they were blood-red in color. Overall, the two sites shared only seven out of 61 animal species identified. “There’s nowhere else in the world where you have this dramatic difference of species at this close of a place,” says Shannon Johnson, an MBARI researcher who was also onboard that day. Recent research has hinted that neighboring hydrothermal vents might host different arrays of life, but the scene in the Gulf of California, as Goffredi, Johnson and their colleagues described it in the July 26 Proceedings of the Royal Society B (pdf),provides one of the first dramatic examples of this trend. Goffredi’s team thinks the local geology and chemistry of each vent effectively selects for a rare and specialized animal community that may only be able to live at that site.

There's a Wildfire Burning in West Greenland Right Now --It’s not just the American West and British Columbia burning up. A fire has sparked in western Greenland, an odd occurrence for an island known more for ice than fire. A series of blazes is burning roughly in the vicinity of Kangerlussuaq, a small town that serves as a basecamp for researchers in the summer to access Greenland’s ice sheet and western glaciers. The largest fire has burned roughly 3,000 acres and sent smoke spiraling a mile into the sky, prompting hunting and hiking closures in the area, according to local news reports. There’s no denying that it’s weird to be talking about wildfires in Greenland because ice covers the majority of the island. Forests are basically nonexistent and this fire appears to be burning through grasses, willows and other low-slung vegetation on the tundra that makes up the majority of the land not covered by ice.  Data for Greenland fires is hard to come by, but there is some context for fires in other parts of the northern tier of the world. The boreal forest sprawls across Canada, Russia, Alaska and northern Europe, and provides a longer-term record for researchers to dig into. That record shows that the boreal forest is burning at a rate unprecedented in the past 10,000 years.

Largest Ever Wildfire in Greenland Continues to Burn, Can Be Seen From Space - A wildfire is blazing in Greenland right now. Satellite images show a fire in west Greenland has been burning for a week, with the first sighting on July 31.  Local media reports said smoke from the blaze, 90 miles northeast of the small town of Sisimuit, has risen two kilometers into the air and spread hundreds of miles across the surrounding area.  The authorities in Greenland have said they don't expect the fire to go out in the coming days and have diverted traffic and canceled hiking and hunting trips near the fire.  Covered in ice and featureless grassland, wildfires are rare in Greenland, but satellite images suggest that incidents have occurred in the region in recent years. Stef Lhermitte, of Delft University of Technology in the Netherlands, tweeted yesterday that the number of fires in the territory has shot up in 2017.  Data collected by the Copernicus Atmosphere Monitoring Service (CAMS) shows a sharp up-tick in CO2 emissions in Greenland from forest fires in August. At the same time, forest fires in and around the Arctic circle have increased in recent times. A study published in 2013 found that the Boreal Forest, which stretches around the top of the world from Russia, through Scandinavia to Canada, was burning at an "unprecedented rate." This summer, as the European press has been filled with stories about heatwaves and wildfires in the Mediterranean, fires in northern countries have also increased.   Just last week, Climate Central reported that British Columbia in Canada was experiencing its second worst wildfire season of all time, with reports of smoke being seen as far away as Oregon in the United States.

2016 weather report: Extreme and anything but normal — Last year's global weather was far more extreme or record-breaking than anything approaching normal, according to a new report.The U.S. National Oceanic and Atmospheric Administration on Thursday released its annual checkup of the Earth, highlighting numerous records including hottest year, highest sea level, and lowest sea ice in the Arctic and Antarctica.The 299-page report, written by scientists around the world and published in the Bulletin of the American Meteorological Society, shows that 2016 was "very extreme and it is a cause for concern," said co-editor Jessica Blunden, a NOAA climate scientist.Researchers called it a clear signal of human-caused climate change. A record large El Nino, the warming of the central Pacific that changes weather worldwide, was also a big factor in last year's wild weather. Scientists examined dozens of key climate measures and found:

  • — At any given time, nearly one-eighth of the world's land mass was in severe drought. That's far higher than normal and "one of the worst years for drought," said report co-author Robert Dunn of the United Kingdom Met Office.
  • — Extreme weather was everywhere. Giant downpours were up. Heat waves struck all over the globe, including a nasty one in India. Extreme weather contributed to a gigantic wildfire in Canada.
  • — Global sea level rose another quarter of an inch (3.4 millimeters) for the sixth straight year of record high sea levels.
  • — There were 93 tropical cyclones across the globe, 13 percent more than normal. That included Hurricane Matthew that killed about 1,000 people in Haiti.
  • — The world's glaciers shrank — for the 37th year in a row — by an average of about 3 feet (1 meter).
  • — Greenland's ice sheet in 2016 lost 341 billion tons of ice (310 billion metric tons). It has lost 4400 billion tons (4000 billion metric tons of ice since 2002.

Many of the findings have been previously released, including that 2016 was the hottest year on record for the third consecutive year. A separate study based on modeling and weather patterns shows three hot years in a row is close to impossible to be a natural coincidence. The odds of three years in a row setting heat records without man-made global warming is only 0.7 percent, compared to 30 to 50 percent with greenhouse gases according to a separate study published Thursday in the Geophysical Research Letters.

The year Trump was elected was so hot, it was one-in-a-million - 2014, 2015, and 2016 each broke the global temperature record. A new study led by climate scientist Michael Mann just published in Geophysical Research Letters used climate model simulations to examine the odds that these records would have been set in a world with and without human-caused global warming. In model simulations without a human climate influence, the authors concluded:

  • There’s a one-in-a-million chance that 2014, 2015, and 2016 would each have been as hot as they were if only natural factors were at play.
  • There’s a one-in-10,000 chance that 2014, 2015, and 2016 would all have been record-breaking hot years.
  • There’s a less than 0.5% chance of three consecutive record-breaking years happening at any time since 2000.
  • There’s a 0.1%–0.2% chance of 2016 being the hottest on record.

To put those numbers in perspective, you have about a one-in-3,000 (0.03%) chance of being struck by lightning in your lifetime. You have about as much chance of being struck by lightning this year as 2014, 2015, and 2016 each being as hot as they were due solely to natural effects. That means denying human-caused global warming is like planning to be struck by lightning three years in a row. Perhaps a tinfoil hat will help. It’s unusual to have three consecutive record-breaking years even with the aid of global warming, but without the human climate influence, it simply wouldn’t happen.

Australia records hottest July, Bureau of Meteorology says -- Australia has had its warmest July on record, the Bureau of Meteorology (BOM) has said.A BOM report released today shows the country's average July temperature was at its highest in more than 100 years of weather recording.BOM forecaster David Crock said the warmest parts had been through Queensland, the Northern Territory, northern Western Australia and New South Wales.Mackay, in central Queensland, had its hottest July day on record at 28.9C on July 19, beating the previous record set only the year before."The month has been dominated — at least in eastern Australia — by a ridge of high pressure which has seen very clear skies and a warm air mass sit over the country for days and weeks at a time," he said."The inland areas have certainly been warmer away from the cooling influence of the ocean … but certainly some of the temperature anomalies extend right across northern Australia. "Queensland had its warmest July on record for both maximum and minimum temperatures across the whole state — parts of Queensland have been very dry."

Death Valley just experienced the hottest month ever recorded on Earth - The average temperature in Death Valley last month was a stifling, suffocating 107.4 degrees. Since this story was originally published last week, we have determined it was the hottest month on record for the whole planet — not just the United States. The average monthly temperature is a combination of highs and lows. Daytime temperatures in Death Valley are known to be excruciatingly hot. In fact, it is currently the location of the hottest temperature ever recorded on Earth, 134 degrees. (Note: This record is currently being challenged.) But perhaps more alarming in this record is the month’s overnight temperatures — when things are supposed to cool down. The temperature didn’t fall below 89 degrees at any point in the month of July at Death Valley. On three nights, the “low” temperature was 102-103 degrees.Brian Brettschneider, a climatologist at the International Arctic Research Center in Fairbanks, Alaska, found another location with a hotter month — King Khalid Military City in Saudi Arabia. In August 2014, the city’s average temperature was 41.91 degrees Celsius, or 107.44 degrees Fahrenheit. At least, that’s what the Global Historical Climatology Network suggested. “New evidence clearly shows the value from King Khaled to have been in error,” wrote Christopher C. Burt, a climatologist at Weather Underground, on Sunday. “Thus the Death Valley figure from this past July is, in fact, the warmest single month (average monthly temperature) reliably measured to date in the world.

In Kuwait temperature reaches 62 degrees - In Kuwait, the air temperature in some places reached 62 degrees Celsius in an open area where there is no shadow. Users of social networks share videos of burning trees, bushes, and also note that because of the heat, gasoline in the car tanks exploded. Kuwait just owns a world record for temperature indicators - in the town of Mithribach in the north-west of the country on July 21, 2016, the highest temperature in the history of meteorological observations on our planet was recorded. The heat in the shade here reached plus 54 degrees Celsius. World record data submitted by Kuwaiti meteorologists have been adopted and officially confirmed by the World Meteorological Organization (AMO).

Global Investment Firm Warns 7.8 Degrees of Global Warming Is Possible - A leading British global investment firm has a warning for its clients: If we keep consuming oil and gas at current rates, our planet is on course to experience a rise in global average temperatures of nearly 8℃ (14℉) by the end of the century. This would make Earth basically uninhabitable for humans.Although this is the darkest scenario we've seen so far, there's reason for cautious optimism: the new projections point out that it's unlikely investors will simply ignore this risk, meaning that our present level of fossil fuel consumption could decrease. Still, by current climate research standards, this is a pretty wild number. It is four times as high as the 'safe limit' for increasing temperatures caused by climate change, internationally recognised to be around 2℃ (3.6℉) above pre-industrial levels. Schroders, the British investment firm which controls assets worth $542 billion, released this forecast as part of a range of potential scenarios in its'Climate Progress Dashboard' in late July. The Climate Progress Dashboard has been developed, a briefing says, to "help investors base decisions on the outcomes that are likely, rather than those they would like to see." It attempts to assess the progress being made by governments and industry on meeting climate targets. It breaks down what would happen to global temperatures if we continue on our current business-as-usual course, based on 12 different measures. Those measures include 'political ambition,' which looks at the existing pledges made by governments; progress from major corporations on issues like 'climate finance' (new investment in efforts to curb or adapt to climate change) and 'carbon prices' (taxing carbon dioxide emitters); technological progress on factors like renewable energy adoption; as well as the potential future impact of current levels of oil, gas and coal production if they continue.

USDA office told to use ‘weather extremes’ instead of 'climate change' | TheHill: Officials at a U.S. Department of Agriculture (USDA) office told staffers to avoid the term “climate change” in their communications and use language like “weather extremes” instead, The Guardian reported Monday. According to emails obtained by The Guardian, officials told staffers in the USDA’s Natural Resources Conservation Service (NRCS) to change the way they discuss climate change in their work. According to the office, climate change would become “weather extremes.” Climate change adaptation should instead be “resilience to weather,” and efforts to “reduce greenhouse gases” should instead be deemed as ways to “build soil organic matter, increase nutrient use efficiency.” “We won’t change the modeling, just how we talk about it,” Bianca Moebius-Clune, the NRCS’s director of soil health, wrote in an email to staff on Feb. 16, according to the report. Moebius-Clune said the new language was given to her to pass on to staff. It is not clear whether the NRCS's use of "weather extremes" instead of climate change is part of a broader shift within the USDA. An official said the directive was designed to allow the office to continue its climate change work while presenting it in a way that would better resonate with the new administration and the agricultural interests with which it works. NRCS's climate change page, designed to "to provide assistance to enable farmers, ranchers and forest landowners to help them adapt to climate change and weather variability," is still live on the service's website.

A “mini-Katrina” flooded parts of New Orleans. | Grist: Nearly 10 inches of rain fell in one neighborhood on Saturday during a rainstorm so severe that it would occur less than once in 100 years, assuming a stable climate..  Eight of city’s major drainage pumps were not working during the event and the officials who originally claimed the canals and pumps had operated as expected are resigning*. Since much of New Orleans is below sea level, every inch of rainwater that falls has to be pumped to higher ground. A warming atmosphere can hold more water vapor, making deluges like this more common. Throughout the city came stories of impromptu water rescues, traveling by canoe, and millions of dollars worth of damage. During the height of the flood, residents took refuge on porches and watched debris float by. Famous jazz trumpeter Kermit Ruffins floated beer by boat to help residents cope. It took more than 48 hours for the city to tow flooded cars in order to reopen access to Interstate 10. Recovery could take months in the hardest hit areas. Did you know New Orleans is massively flooded right now? Neither did most people. Biggest flood in 15 years. No emergency declaration. pic.twitter.com/3s63hW1r7D

The Sea Level Did, in Fact, Rise Faster in the Southeastern US - For people in the southeastern United States, and especially in Florida, who feel that annoying tidal flooding has sneaked up on them in recent years, it turns out to be true. And scientists have a new explanation.  In a paper published online Wednesday, University of Florida researchers calculated that from 2011 to 2015, the sea level along the American coastline south of Cape Hatteras rose six times faster than the long-term rate of global increase. “I said, ‘That’s crazy!’” Andrea Dutton, one of the researchers, recalled saying when a colleague first showed her the figures. “ ‘You must have done something wrong!’ ” But it was correct. During that period of rapid increase, many people in Miami Beach, Fort Lauderdale and other coastal communities started to notice unusual “sunny-day flooding,” a foot or two of salt water inundating their streets at high tide for no apparent reason. In the paper, published in the journal Geophysical Research Letters, the scientists proposed a mechanism to explain the rapid increase: Two large-scale atmospheric patterns had intersected to push up the water off the Southeast coast, causing a “hot spot” of sea-level rise. This new mechanism, if it holds up to scientific scrutiny, might ultimately give researchers the ability to predict tidal flooding more accurately and warn communities what to expect months in advance. William V. Sweet, a sea-level researcher at the National Oceanic and Atmospheric Administration who was not involved in the new work, pointed out that the long-term trend in sea level was a relentless increase, but that much is unknown about the variations that can occur over short periods. “The more we can understand what’s causing those, the more we can be prepared for the next influx of tidal flooding events,” Dr. Sweet said.

4,300 Days Since Last U.S. Major Hurricane Strike - Wednesday of this week will mark 4,300 days since the last major hurricane (Category 3 or stronger, 111-129 mph maximum sustained winds) made landfall in the U.S. The last major hurricane to make landfall in the U.S. was Wilma striking Florida on October 24, 2005, one of several strong hurricanes to hit the U.S. that year. The unusual hurricane activity in 2005 was a central focus of Al Gore’s 2006 movie, An Inconvenient Truth, in which Mr. Gore suggested 2005 was going to be the new normal. Instead, the bottom dropped out of Atlantic hurricane activity after 2005. The “drought” of landfalling U.S. major hurricanes continues, and as seen in this graphic from WeatherStreet.com, no hurricanes have yet formed anywhere in the Atlantic basin in 2017, despite the forecast for an above-normal hurricane season:

Climate change evident as icebreaker sets mark for earliest Northwest Passage transit   -- After 24 days at sea and a journey spanning more than 10,000 kilometers (6,214 miles), the Finnish icebreaker MSV Nordica has set a new record for the earliest transit of the fabled Northwest Passage. The once-forbidding route through the Arctic, linking the Pacific and the Atlantic oceans, has been opening up sooner and for a longer period each summer due to climate change. Sea ice that foiled famous explorers and blocked the passage to all but the hardiest ships has slowly been melting away in one of the most visible effects of man-made global warming. Records kept by Canada’s Department of Fisheries and Oceans show that the previous earliest passage of the season happened in 2008, when the Canadian Coast Guard ship Louis L. St-Laurent left St. John’s in Newfoundland on July 5 and arrived in the Beaufort Sea off Point Barrow on July 30.

Loss of Arctic sea ice impacting Atlantic Ocean water circulation system - Arctic sea ice is not merely a passive responder to the climate changes occurring around the world, according to new research. Scientists at Yale University and the University of Southampton say the ongoing Arctic ice loss can play an active role in altering one of the planet’s largest water circulation systems: the Atlantic Meridional Overturning Circulation (AMOC). AMOC has a lower limb of dense, cold water that flows south from the north Atlantic, and an upper limb of warm, salty water that flows north from the south Atlantic as part of the Gulf Stream. AMOC plays a major role in regional and global climate, affecting the Atlantic rim countries — particularly those in Europe — and far beyond. It was featured in the movie “The Day After Tomorrow.” “Conventional thinking has been that if ocean circulation weakens, reducing the transport of heat from low to high latitudes, then it should lead to sea ice growth. But we have found another, overlooked, mechanism by which sea ice actively affects AMOC on multi-decadal time scales,” said professor Alexey Fedorov, climate scientist at the Yale Department of Geology and Geophysics and co-author of a study detailing the findings in the journal Nature Climate Change. . Earlier this year, a different Yale-led study cautioned that the AMOC system was not as stable as previously thought. That study said the possibility of a collapsed AMOC under global warming conditions is being significantly underestimated. “We’ve now found this new connection between sea ice and AMOC,”

Flooding in Miami is no longer news — but it’s certainly newsworthy -  This was the scene in Miami Beach earlier this week. The problem was twofold: A heavy downpour, thanks to a dissipating tropical storm, combined with the onset of high tide just after 4 p.m. But, really, the problem was threefold. Those high tides are higher than they used to be because the ocean itself is higher than it used to be. A National Oceanic and Atmospheric Administration gauge at Virginia Key, just off the Miami shoreline, had an average sea-level height from 2012 to 2016 that was about 4 inches higher than the average from two decades earlier. At Lake Worth, a bit further north on the coast, there has been a similar increase since the mid-1980s. A gauge near Naples, Fla., saw a jump of about six inches from the early 1980s to the most recent five-year period. If the sea is higher, it takes less additional rain to cause a flood, especially at high tide. Superstorm Sandy in 2012 saw massive flooding, thanks to the combination of heavy rain, a high tide — and higher overall sea levels. That’s why Miami floods regularly now, so much so that real estate agents are making long-term bets on property in the Miami area that’s higher above sea level.  Sam Purkis, a marine geologist at the University of Miami, told Scientific American that such moves might not be enough.“What will happen, more than likely, is that you’ll have one big hurricane, and you’ll get a big inundation into the city,” Purkis said. “And that will serve to rot out the infrastructure — the sewer lines, the electricity, the telecoms. Everything that’s under the road. That becomes very costly to keep replacing every time this happens.” … [H]igher ground won’t be pleasant with “all of the rotting detritus and just general mayhem that that’s going to cause,” Purkis said. “So by the time the city starts to flood, it’s probably not great to be in the high areas either.”  This isn’t just happening near Miami. Across the world, and particularly on the Gulf Coast, sea levels are rising fairly quickly.

A History of Global Warming, In Just 35 Seconds -  A new video shows the rhythm of global warming for countries around the world, from Afghanistan to Zimbabwe. Bars representing each country’s annual average temperature anomaly pulse up and down. It's like watching a heartbeat on a monitor. Rather than staying steady like a normal heartbeat, it’s clear that temperatures for more than 100 countries are climbing ever higher on the back of increasing carbon pollution. While there are individual variations in how hot any year is, the signal of climate change is unmistakable. “There are no single countries that clearly stand out from the graph,” said Antti Lipponen, a physicist at the Finnish Meteorological Institute who made the graphic. “The warming really is global, not local.”While the temperature spiral showed the global average temperature, Lipponen’s animation uses NASA data to show individual countries separated by regions. The format invites you to look for your country or the place you took your vacation last year. But step back to look at the graphic as a whole and it’s clear we’re all in this together. No country is immune from rising temperatures, let alone the other impacts of climate change. It’s also clear that global warming is accelerating. In the past three decades (which starts around the 14-second mark in the video), the bars start pushing further and further from the center. Cooler-than-normal years start to become more rare and by the 1990s, they’ve almost disappeared completely.

Why the Left Can't Solve Global Warming - Environmentalists have been waxing apocalyptic about global warming for several decades now. But what do they have to show for it? . Why have environmentalists failed so utterly to push their cause forward after all this time? Because they've gone about it all wrong. Instead of treating global warming like a problem that needs to be addressed regardless of what caused it, the green left has been more obsessed with establishing humanity's culpability and embracing ever more extreme and painful mitigation steps, as if they were more concerned with punishing the perpetrators than solving the problem.  Undeterred, liberals are now saying that we should save the planet by having fewer kids, each of whom creates 58 tons of carbon dioxide each year (more for American parents). This is a ludicrous suggestion that will further drive a wedge between middle-class Americans who live for their families and yuppie, green Americans who live for the enviroment. But the further problem with all these remedies is that they suffer from what's called the collective action problem. Take, for example, forgoing children: If some people forgo but others don't, the former will suffer a deep personal loss and the planet will be no better off. Hence everyone waits for someone else to go first and the "solution" doesn't even get off the ground. If environmentalists want to succeed, they'll have to begin by transforming their own attitudes, focusing less on asking people to sacrifice to save the planet, and focusing much more on smart technological solutions that solve our climate problem without asking so much from us.

No One Can Agree What 2°C of Global Warming Actually Means - We know that during the industrial revolution, humans developed machinery at a large scale that pumped vast amounts of greenhouse gases—such as carbon dioxide and steam—into the atmosphere, kickstarting the climate change we're all witnessing today. But when exactly did humans start emitting "industrial" levels of emissions into the atmosphere? In other words, when did our emissions start to affect the way the atmosphere works? As nations around the world make plans to limit their emissions and to adapt to the effects of climate change, this timeline is actually important. The idea of a "pre-industrial" climate serves as a baseline in determining how global warming impacts the Earth, and how much hotter it can afford to get. During the Paris Climate Accord talks in 2015, which brought together almost 200 countries in order to limit greenhouse gas emissions, negotiators cited "2 ℃" as a tipping-off point at which irreversible damage to the planet happens. At the time of Paris Climate Accord, pre-industrial temperatures were never precisely defined, several scientists argue in a new study, published in Nature. And their findings are troubling. Researchers from Pennsylvania State University, the University of Edinburgh, and the University of Reading found that defining the late 19th century as pre-industrial—as some climate scientists had been doing—is actually too late. People had already emitted a significant amount of carbon by then due to the industrial revolution, which started in the 1750s.On average, the amount of greenhouse gases in the atmosphere was lower before the 1750s, and global mean temperatures have risen since then. So if we want to maintain a 2 ℃ limit above "pre-industrial" temperatures, the baseline date and temperature chosen is important. But scientists can't decide on a specific date or temperature because natural climate variability, such as theMedieval anomaly or the Little Ice Age, make it difficult to characterize one specific date as "normal." Practically speaking, an earlier pre-industrial baseline date would mean that parties in the Paris Accord must emit 40 percent less greenhouse gases in order to avoid 2 ℃ warming above these earlier, truly pre-industrial levels. So according to this analysis, Paris negotiators were 40 percent off in their goals.

It's Official: Trump Sends Formal Notice to UN to Pull America Out of Paris Agreement - Two months after Donald Trump announced that he intended to pull America out of the Paris agreement , last Friday the State Department submitted the formal notification to the UN to that effect. We know Trump is walking the wrong way into the history books on this. For all his policy failures and the continuing chaos around the West Wing and the White House, his total disregard for the future of this planet and for future generations is beyond comprehension to anyone but his fossil fuel cronies. There is no doubt that the decision by the U.S. to pull out of the Paris agreement is what Ed Crooks, the energy correspondent in the Financial Times , called "at one level momentous." It is staggering to say the least that, as Crooks noted, "The world's largest economy and second-largest emitter of greenhouse gases is quitting a deal that the governments of leading European countries have described as 'a vital instrument for our planet.'" However, here comes the important part: "In terms of the consequences for the global energy industry, however, its impact has so far been negligible."  He added, "The most important reason for that is that moves towards reducing greenhouse gas emissions are going with the grain of energy markets, regardless of political decisions."

Trump White House Says U.S. Will Join Climate Talks, Despite Leaving Paris Deal - The Trump administration wants the United Nations to know that the president really, truly meant it when he said that America would be exiting the Paris climate agreement back in June. But the White House would also like the international community to know that the United States reserves the right to change its mind on that subject — and would still like a seat at the table at all international climate talks, regardless. Under the terms of the Paris deal, the U.S. can’t actually, formally notify the U.N. that it is withdrawing until 2019. And Donald Trump already made his administration’s informal intentions perfectly clear weeks ago. But the American government delivered an official written notice of its intention to exit the agreement to the U.N. on Friday anyway. Ironically, that document does less to reiterate America’s intransigent opposition to the deal than to signal the administration’s openness to changing course. “As the President indicated in his June 1 announcement and subsequently, he is open to re-engaging in the Paris Agreement if the US can identify terms that are more favorable to the United States, its businesses, its workers, its people, and its taxpayers,” the letter from the State Department said. The Paris Agreement is nonbinding, and the U.S. can alter its own carbon-emissions targets at will. So Trump can identify “terms that are more favorable” to the United States whenever he wants to. And that option, apparently, remains on the table. The letter also says that the U.S. will participate in upcoming international climate-change negotiations, including those aimed at implementing the Paris deal, so as “to protect U.S. interests and ensure all future policy options remain open to the administration.”

Exclusive: U.S. envoys told to be coy on re-engaging in Paris climate deal – cable  (Reuters) - U.S. diplomats should sidestep questions from foreign governments on what it would take for the Trump administration to re-engage in the global Paris climate agreement, according to a diplomatic cable seen by Reuters.The cable, sent by U.S. Secretary of State Rex Tillerson to embassies on Friday, also said diplomats should make clear the United States wants to help other countries use fossil fuels.In the wake of President Donald Trump's announcement in June that the United States would withdraw from the accord, the cable tells diplomats to expect foreign government representatives to ask questions like: "Does the United States have a climate change policy?" and "Is the administration advocating the use of fossil fuels over renewable energy?"If asked, for example, "What is the process for consideration of re-engagement in the Paris Agreement?", the answer should be vague: "We are considering a number of factors. I do not have any information to share on the nature or timing of the process," the cable advises.A U.S. State Department official declined to comment on the cable.(Click here for a link to the cable: here ) Trump, a Republican, had campaigned on a promise to "cancel" the Paris deal, saying he believed it would cost the U.S. economy trillions of dollars while leaving developing nations such as China unfettered. In a sharp difference with the previous administration of President Barack Obama, a Democrat, Trump has several times called climate change a hoax.

Government Report Finds Drastic Impact of Climate Change on U.S. -- The average temperature in the United States has risen rapidly and drastically since 1980, and recent decades have been the warmest of the past 1,500 years, according to a sweeping federal climate change report awaiting approval by the Trump administration.The draft report by scientists from 13 federal agencies, which has not yet been made public, concludes that Americans are feeling the effects of climate change right now. It directly contradicts claims by President Trump and members of his cabinet who say that the human contribution to climate change is uncertain, and that the ability to predict the effects is limited. “Evidence for a changing climate abounds, from the top of the atmosphere to the depths of the oceans,” a draft of the report states. A copy of it was obtained by The New York Times.  The authors note that thousands of studies, conducted by tens of thousands of scientists, have documented climate changes on land and in the air. “Many lines of evidence demonstrate that human activities, especially emissions of greenhouse (heat-trapping) gases, are primarily responsible for recent observed climate change,” they wrote.  The report was completed this year and is a special science section of the National Climate Assessment, which is congressionally mandated every four years. The National Academy of Sciences has signed off on the draft report, and the authors are awaiting permission from the Trump administration to release it. One government scientist who worked on the report, Katharine Hayhoe, a professor of political science at Texas Tech University, called the conclusions among “the most comprehensive climate science reports” to be published. Another scientist involved in the process, who spoke to The New York Times on the condition of anonymity, said he and others were concerned that it would be suppressed.

US scientists contradict Trump's climate claims (AP) — As President Donald Trump touts new oil pipelines and pledges to revive the nation's struggling coal mines, federal scientists are warning that burning fossil fuels is already driving a steep increase in the United States of heat waves, droughts and floods. It is the latest example of collisions between Trump's environmental policies and the facts presented by his government's experts. Contradicting Trump's claims that climate change is a "hoax," the draft report representing the consensus of 13 federal agencies concludes that the evidence global warming is being driven by human activities is "unambiguous." That directly undercuts statements by Trump and his Cabinet casting doubt on whether the warming observed around the globe is being primarily driven by man-made carbon pollution. "There are no alternative explanations, and no natural cycles are found in the observational record that can explain the observed changes in climate," says the report, citing thousands of peer-reviewed studies. "Evidence for a changing climate abounds, from the top of the atmosphere to the depths of the oceans." Faced with reams of evidence compiled by federal scientists that conflicts with their policy positions, Trump and his advisers frequently cite the work of industry-funded think tanks. Environmental Protection Agency chief Scott Pruitt and Energy Secretary Rick Perry have championed the formation of a "red-team, blue-team" exercise where climate-change skeptics would publicly debate mainstream climate scientists.

Government scientists fear Trump will suppress climate change study: report | TheHill: Climate scientists who work for the federal government fear that President Trump or his administration will try to suppress a new study on climate change’s impact on the United States, according to a new report. The New York Times obtained a copy of the report, which is waiting for approval from the Trump administration before it can be made public. The report concludes that Americans are already feeling the effects of climate change and says it is “extremely likely” that the majority of global temperature increases in the past 60 years are partially due to human influence. The report also details the warming trends of more than 1.6 degree Fahrenheit from 1880 to 2015 are likely linked to human activity.“Many lines of evidence demonstrate that human activities, especially emissions of greenhouse gases, are primarily responsible for observed climate changes in the industrial era,” one portion of the report reads. “There are no alternative explanations, and no natural cycles are found in the observational record that can explain the observed changes in climate.” At least one government scientist who worked on the report said he and others are worried the Trump administration will suppress the findings, according to the Times. The report follows reports earlier on Monday that staffers at a U.S. Department of Agriculture office were told to avoid the term “climate change” in communications and use phrases like “weather extremes” instead. 

Leak of climate change report could do damage, scientists say --  Several authors of an important, as-yet-unpublished climate change report tell Newsweek that a leak of the document, published by The New York Times, could impede the upcoming approval process.The Times on Monday night published a widely shared article that suggested the authors of the report, which comes to stark conclusions about the reality of human-caused climate change, fear the Trump administration might suppress their findings. Along with the article, the Times shared the latest version of the report, which hasn’t been made publicly available and wasn’t scheduled for release until 2018.But some of the researchers say the expressions of fear are premature and potentially damaging; the White House is actively reviewing the report, and hasn’t yet finished the process. When asked if he thinks the Trump administration might try to dismiss or suppress the report, one of the study’s lead authors, James Kossin, a physical scientist with National Centers for Environmental Information, says “there’s nothing to suggest that has happened or will happen.”  The leaking of the study—which is part of the National Climate Assessment, and is required by Congress to be published every four years—could do more harm than good, says one author, who spoke on the condition of anonymity because the report hasn’t been released. The report needs to be signed off on by 13 federal agencies and the White House by August 18, and the Times article could hamper this process by stoking tensions between agencies and scientists, the author says. That being said, the report itself comes to some alarming conclusions that are squarely at odds with the stated views of the president and much of his cabinet, including Scott Pruitt, head of the Environmental Protection Agency, which must sign off on the report. The report authors say it’s “extremely likely” that a majority of the warming witnessed in the past 40 years has been caused by human activities. They also conclude it’s likely that human emissions have caused between 0.9 F and 2.3 F degrees of warming between 1951 and 2010.

Scientists call out New York Times for incorrect claim about climate report - Scientists appear to have debunked The New York Times' claim it was leaked a secret, gloomy climate change report which it published amid fears President Trump would suppress it.On Monday, The New York Times published a story saying there are concerns that the Trump administration could suppress what’s known as the National Climate Assessment, a project of the U.S. Global Change Research Program.The story, titled “Scientists fear Trump will dismiss blunt climate report,” said the draft report “has not yet been made public” but “a copy of it was obtained by The New York Times.”The paper also said “those who challenge scientific data on human-caused climate change" are worried the report will be publicly released.  But those who worked on the report are pushing back against the claims, saying the version that was obtained and posted in full by the New York Times has actually been online and available to the public for months. “It's not clear what the news is in this story,” Robert Kopp, a climate scientist at Rutgers University who is listed on the report as among the lead authors, said on Twitter.The Internet Archive, a website that archives content published online, says it downloaded the report from the Environmental Protection Agency's website in January 2017.Kopp noted the draft was published on the site during the public comment period, but then taken down after the period. But it still remained online at the Internet Archive's site. The Times' leaked draft has been on the Internet Archive since January, during the public comment period https://t.co/B8XLQ6omb2

White House slams NYT article on 'suppressed' climate report already made public | TheHill: The New York Times has issued a correction after publishing a climate report on Tuesday it said was "leaked" to the paper by a scientist — only to learn the report had been online for months. Under the front-page subheadline "Fears of Suppression," the article claimed the draft report had "not been made public" by the Trump administration but "a copy of it was obtained by The New York Times." The report was available on the Internet Archive nonprofit website at the start of the year, however. It was also available on the National Academies of Sciences Public Access Records Office website, which is accessible to the public. "An article on Tuesday about a sweeping federal climate change report referred incorrectly to the availability of the report," the paper wrote. "While it was not widely publicized, the report was uploaded by the nonprofit Internet Archive in January; it was not first made public by The New York Times." White House press secretary Sarah Huckabee Sanders slammed the Times for not reaching out to the White House press office for comment before publishing the Tuesday report. "It’s very disappointing, yet entirely predictable to learn The New York Times would write off a draft report without first verifying its contents with the White House or any of the federal agencies directly involved with climate and environmental policy," Huckabee Sanders said in a statement. "As others have pointed out — and The New York Times should have noticed — drafts of this report have been published and made widely available online months ago during the public comment period," she continued. "The White House will withhold comment on any draft report before its scheduled release date.” The Times issued a correction on page A17 of its Wednesday edition.

EPA head casts doubt on ‘supposed’ threat from climate change | TheHill: Environmental Protection Agency (EPA) head Scott Pruitt on Wednesday cast doubt on the idea that climate change poses a threat to the United States. Pruitt told conservative North Dakota talk radio host Scott Hennen on WHO-AM that that’s one of the reasons why he is organizing a “red team/blue team” exercise to try to challenge what the EPA chief called “so-called settled science” on climate change. “We’ve talked about, Scott, having a red team/blue team exercise, where we bring red team scientists in, blue team in, ask the question: What do we know, what don’t we know about this issue,” Pruitt said on the show, where he appeared with North Dakota Gov. Doug Burgum (R). “The American people deserve an honest, open, transparent discussion about this supposed threat to this country. And we need to advance that,” he continued. “Hopefully, sometime this fall, we’ll be able to actually get that going.” A draft federal report publicized Monday detailed numerous effects of climate change that the United States and the world are currently experiencing, like higher temperatures and strong precipitation events. It linked the changing climate directly to greenhouse gas emissions caused by human activity. Pruitt, however, is skeptical of the scientific consensus that human activity is far and away the primary cause of climate change. The EPA chief believes that the climate is changing and humans have some part in that, but maintains that scientists do not know how much that contributes to climate change. 

The closest man to Trump is a stealth climate believer – The Denver Post: — Step aside, Ivanka. When it comes to climate change, the biggest influence on President Donald Trump may turn out to be his new chief of staff, John Kelly. The retired four-star Marine general shares the military’s pragmatic view of global warming. Under Kelly’s command from 2012 to 2016, U.S. Southern Command played a central role in Pentagon planning for the higher temperatures, more extreme weather and rising sea levels that it sees as threatening national security. Now advocates hope he will bring that view into the White House. For more than a decade, military leaders have warned that climate change is aggravating social tensions, destabilizing regions and feeding the rise of extremist groups like al-Qaida and the Islamic State. Kelly, whom Trump has called “the true star” of his administration, will be up against a cadre of Trump advisers and Cabinet appointees who are either skeptics of or have actively tried to chip away at existing U.S. climate policy. Trump himself has frequently and openly questioned climate change, calling global warming “bull—-,” and “a hoax” that was “created by and for the Chinese” to hurt U.S. manufacturing. On Monday, a group of federal scientists, fearful that the White House is actively trying to suppress science related to global warming, went so far as to leak a draft of an extensive climate change study by 13 agencies.

Court strikes down Obama EPA’s restrictions on Earth-warming gases | TheHill: A federal court on Tuesday struck down an Obama administration rule that banned certain uses of certain gases used in air conditioning and refrigeration. The court said that the Environmental Protection Agency (EPA) cannot ban hydrofluorocarbons (HFCs) under a Clean Air Act provision meant to protect the ozone layer, since that section is meant only to stop ozone-depleting substances. The U.S. Court of Appeals for the District of Columbia Circuit's 2-to-1 ruling puts a dent in a major piece of former President Obama’s climate-change agenda. When released into the atmosphere, HFCs are extremely potent greenhouse gases, with an Earth-warming potential up to 14,800 times that of the same volume of carbon dioxide. They break down in as little as 15 years, so phasing out the use of HFCs could bring quick results to greenhouse gas-cutting efforts. The substances came into wide use in recent years, following the 1990 Clean Air Act, which sought in part to phase out the use of gases that depleted the ozone layer. HFCs grew rapidly as a substitute, but since they are greenhouse gases the Obama administration wanted to phase them out as well, and it got industry support for its efforts. The appeals court ruled Tuesday, however, that the EPA cannot invoke the same Clean Air Act provision used to phase out ozone-depleting substances for HFCs.

Court Tosses an Obama-Era Climate Rule That Trump Had Defended - The Trump administration’s attempt to defend one aspect of Barack Obama’s climate agenda failed as a federal court tossed a regulation to limit harmful chemicals used in air conditioners and refrigerators. The U.S. Court of Appeals in Washington, in a 2-1 decision, ruled Tuesday the Environmental Protection Agency overstepped its authority in prohibiting the use of certain refrigerants that are potent greenhouse gases. In its 2015 regulation, EPA relied on a statute that regulated use of ozone-depleting substances, but the refrigerants -- called hydrofluorocarbons -- don’t damage the ozone layer, Judge Brett Kavanaugh wrote in the court’s decision. The EPA under President Donald Trump has moved to undo the other major regulations issued under Obama that were designed to address climate change, with Administrator Scott Pruitt questioning the degree to which humans are responsible for global warming. In this case, with U.S. chemical companies Honeywell International Inc. and The Chemours Co. supporting the rule, Trump’s Justice Department defended the regulation.  It did so "because it benefits U.S. companies," said Christopher Perrella, a Bloomberg Intelligence chemicals analyst. "It’s good for the companies and it’s good for the planet. That’s a win-win regardless of your thoughts on climate change."

To stop global warming, should humanity dim the sky? -  Late last month, about 100 researchers from around the world gathered at Logan International Airport in Boston. A fleet of buses appeared to whisk them to a remote and luxurious ski resort in northeastern Maine. They met to talk, drink, and cogitate off the record for five days about a messy solution to one of the world’s most challenging problems. They had gathered to discuss how to provide humanity one last line of defense against catastrophic global warming: solar geoengineering. The idea behind solar geoengineering is simple. For the last four decades, humanity has struggled to reduce the amount of greenhouse gas entering the atmosphere. We have decommissioned nuclear plants, introduced millions of new gasoline-burning cars to the roadway, and dawdled through treaty after treaty. Meanwhile, the concentration of carbon dioxide in the atmosphere has only risen. It sure seems like we’ll need some more time to get our act together. So maybe we should toy with another variable: While we try to reduce the planet’s heat-trapping gas, maybe we can also try to reduce the amount of heat entering the atmosphere in the first place. Interest in the technique has spiked recently. An administration hostile to climate mitigation has taken power in the United States, and some countries risk falling short of the promises they made under the Paris Agreement. It seems suddenly plausible that the industrialized world will not succeed in staving off two degrees of temperature rise. Governments and private donors have opened their pockets in advance of that failure. This summer, China’s national Ministry of Science and Technology announced it will fund a 15-person, $3 million geoengineering research program at Beijing Normal University. It will join several government-funded teams working on the same problem in Germany as well. This fall, Harvard University will also launch its own solar geoengineering research with $7.5 million in funding from private sources. Its leaders hope to eventually amass a budget of $20 million.

European Investment Bank Pumps $5B Into Renewables and Distributed Grid Upgrades -- Renewable energy projects from Western Europe to Southern India are set to benefit from a European Investment Bank financing package approved last month.The bank, the world’s largest international public lending institution, earmarked €4.3 billion ($5.1 billion) for energy sector initiatives within a €12.4 billion ($14.7 billion) investment war chest covering 53 projects.“These include onshore wind, hydropower and smart meter projects in Italy, energy efficiency, solar, wind and district heating projects in France, reinforcement and extension of natural gas distribution in Ireland and Spain, and financing of renewable energy in India,” said the EIB.Natural gas was included in the package because the European Investment Bank (EIB) sees it as a bridge to lower-carbon energy supplies, a bank source told GTM. As part of the funds that will be distributed by the EIB’s European Fund for Strategic Investments (EFSI), €300 million will go to derisk French new energy technologies as the country looks beyond nuclear.

How Air-Conditioning Conquered America (Even the Pacific Northwest) - NYT - Air-conditioning has been remarkably good at creating demand for itself. It enabled the sweeping postwar development of the South, where all new single-family homes today include central air. In automobiles, it made the commutes between air-conditioned homes and air-conditioned offices possible. In the Southwest, its arrival facilitated new methods of rapid construction, replacing traditional building designs that once naturally withstood the region’s desert climate. By doing all of this, air-conditioning has contributed to the intensive energy demand that worsens climate change that, well, forces us to rely on air-conditioning, a feedback loop environmentalists fear. And so here we are, in 2017, with temperatures racing past 100 degrees in the Pacific Northwest, the region of the country that has historically relied the least on air-conditioning. And now more people, even there, are installing the technology. Decades after air-conditioning made much of the Sun Belt livable, it has now become standard nearly everywhere. Eighty-six percent of new single-family homes in the Northeast are now built with it; 94 percent in the Midwest are. Parts of the United States whose historical development never depended on air-conditioning increasingly resemble the regions whose growth wouldn’t have been possible without it. “Air-conditioning is reaching where it hasn’t reached before,” said Don Prather, the technical services manager with the Air Conditioning Contractors of America. “It’s been moving north and northwest, in every direction.” 

A changing electrical grid may make Snake River dams expendable — and help save salmon -The fate of the Northwest salmon may be decided by the way you use your heater and your air conditioner.In the near future, the U.S. electric grid will be able to digitally manage the vast Northwest hydroelectric network in a way unimaginable just a few years ago. With consent from customers, it will be able to adjust the heaters and air conditioners of millions of homes and buildings, or tap into the batteries of electric cars or other smart appliances.It’s a revolutionary change for the Northwest economy, the energy market, the Columbia Basin dam system and the salmon that migrate through it.The four dams of the Snake River in Washington are less valuable now due to a power surplus caused by wildly successful energy-efficiency programs, cheap natural gas, and rapidly growing wind and solar energy options.The dams hinder the salmon that spawn in the best habitat in the Northwest — in Central Idaho. And this stronghold has the highest, coolest mountain streams that may keep salmon surviving in a warmer, drier future. Twenty years ago, arguments against breaching those dams centered around the loss of crucial power supplied to the region. But as the role of the dams in the Northwest hydrosystem changes, so does their role in the political and environmental ecosystem. As the four lower Snake dams become less relevant pieces of a larger, flexible network, they become more vulnerable.

U.S. Warns of ‘Uncertain’ Future for Wind Amid Tax Credit Debate -- America’s booming wind energy sector faces questions over its long-term growth prospects as federal incentives are scaled back amid weak natural gas prices and modest electricity demand, according to the Department of Energy. The U.S. wind industry added more than 8,200 megawatts of capacity in 2016, representing 27 percent of all energy additions, reports released by the department on Tuesday show. In 2016, wind supplied about 6 percent of U.S. electricity, with Texas, Iowa, Oklahoma and California leading the way among individual states. “At the same time, the prospects for growth beyond the current production tax credit cycle remain uncertain, given declining federal tax support, expectations for low natural gas prices and modest electricity demand growth,” the department said in a release. Utilities have benefited from the credit, set to expire in the next few years, that’s helped wind energy become the cheapest new source of electricity in some markets. Meanwhile, Rick Perry, who heads up the energy department, has ordered a study into whether such tax credits that favor wind and solar are accelerating the closure of coal and nuclear plants.

Feds to expand review of emissions standards for cars | TheHill: The Trump administration is expanding its review of greenhouse gas emissions standards for cars. In a Federal Register notice Thursday, the Environmental Protection Agency (EPA) said it would consider whether to loosen the emissions standards for cars beginning in model year 2021 rather than model year 2022. President Trump in March said he would roll back fuel economy goals, finalized during the Obama administration, for cars between 2022 and 2025. Those goals require an industry-wide fuel economy standard of 54.5 miles per gallon by 2025, a target the auto industry says is too lofty and expensive to reach, given Americans’ vehicle-buying habits. The Department of Transportation (DOT) said last month that it would reconsider its own fuel economy standards beginning in model year 2021. The EPA followed suit on Thursday because the regulations are generally administered together. The EPA will take comments on its 2021-2025 emissions standards for 45 days. “We are moving forward with an open and robust review of emissions standards, consistent with the timeframe provided in our regulations,” EPA Administrator Scott Pruitt said in a statement.“We encourage the public to submit the best-available and most up-to-date information, so that we can get back on track with what the regulation actually requires of the Agency. Finally, we are working with DOT to ensure that our standards are ultimately aligned.”

Electric Car Boom Drives Rush to Mining’s $90 Billion Heartland - A scramble by the lithium market’s biggest players to tie up supply of the high-tech metal is gathering pace in the 170-year-old heartland of Australia’s $90 billion mining industry. Rising Chinese demand for lithium-ion batteries needed for electric vehicles and energy storage is driving significant price gains and an asset boom in Australia, already the world’s largest lithium producer. The fast-developing hub is drawing investment and deals from global producers as well as chemical-to-battery manufacturers in China, the top consumer. Western Australia has four operations in production and three more major projects being advanced to begin output. Major players are likely to continue to scope for deals in the state to secure supply for the next 20 or 30 years, according to consultant Benchmark Mineral Intelligence. “There are serious companies investing and people are starting to lock up the biggest, long-life resources. The question is -- who’s next?”   Greenbushes in Western Australia, the world’s biggest hard-rock lithium mine, is being expanded to more than double annual capacity, Talison Lithium, a joint venture between China’s Tianqi Lithium Corp. and North Carolina’s Albemarle Corp., said in an email. The site, first mined for tin from about 1888, already accounts for about 30 percent of global lithium production, according to Australia’s government. Tianqi is also planning about A$717 million ($578 million) of processing plant expansions. Jiangxi Ganfeng Lithium Co., which has interests in projects in countries including Ireland and Argentina, holds about 43 percent of Australia’s Mt. Marion operation and in May agreed a supply and investment pact with Pilbara Minerals Ltd. for a mine development. Battery maker Shaanxi J&R Optimum Energy Co. in July struck an agreement for future output from Altura Mining Ltd.’s project.

Manchin eyed as potential pick for Energy secretary: report | TheHill: White House and Republican officials are floating the possibility of appointing Democratic Sen. Joe Manchin (W.Va.) as Energy secretary, Bloomberg reported Friday. Manchin was reportedly considered for the job after Trump's election in November, but Trump eventually nominated former Texas Gov. Rick Perry to the post. Jonathan Kott, a spokesman for Manchin, told Bloomberg that the West Virginia Democrat hasn't been in talks for the job and did not say whether Manchin would take the job if offered to him.“Senator Manchin has not had any recent conversations with the Administration about the Secretary of Energy position. He remains committed to serving the people of West Virginia,” Kott said. If Manchin were to take over at the Energy Department, West Virginia Gov. Jim Justice, a former Democrat who earlier this month switched to the GOP, would be able to appoint a Republican to replace Manchin in the Senate. Such a move would expand the GOP's majority in the chamber, potentially boosting Republicans' efforts to repeal and replace ObamaCare. A repeal and replace bill failed by one vote last month after three Republicans voted against it. Perry, the current Energy secretary, has also been floated as a possible replacement for former Homeland Security Secretary John Kelly. Kelly became President Trump's chief of staff in July. The Trump administration has said revitalizing American fossil fuel industries, including West Virginia’s dwindling coal sector, is a key goal. Under Perry, the Energy Department is conducting a study of the reliability of the electric grid, which some green advocates worry is a way to advance coal and natural gas over renewable sources. 

Under Trump, Coal Mining Gets New Life on U.S. Lands - — The Trump administration is wading into one of the oldest and most contentious debates in the West by encouraging more coal mining on lands owned by the federal government. It is part of an aggressive push to both invigorate the struggling American coal industry and more broadly exploit commercial opportunities on public lands. The intervention has roiled conservationists and many Democrats, exposing deep divisions about how best to manage the 643 million acres of federally owned land — most of which is in the West — an area more than six times the size of California. Not since the so-called Sagebrush Rebellion during the Reagan administration have companies and individuals with economic interests in the lands, mining companies among them, held such a strong upper hand. Clouds of dust blew across the horizon one recent summer evening as a crane taller than the Statue of Liberty ripped apart walls of a canyon dug deep into the public lands here in the Powder River Basin, the nation’s most productive coal mining region. The mine pushes right up against a reservoir, exposing the kind of conflicts and concerns the new approach has sparked. “If we don’t have good water, we can’t do anything,” said Art Hayes, a cattle rancher who worries that more mining would foul a supply that generations of ranchers have relied upon. During the Obama administration, the Interior Department seized on the issue of climate change and temporarily banned new coal leases on public lands as it examined the consequences for the environment. The Obama administration also drew protests from major mining companies by ordering them to pay higher royalties to the government. President Trump, along with roundly questioning climate change, has moved quickly to wipe out those measures with the support of coal companies and other commercial interests. Separately, Mr. Trump’s Interior Department is drawing up plans to reduce wilderness and historic areas that are now protected as national monuments, creating even more opportunities for profit.

West Virginia governor wants federal incentives to boost Appalachian coal use - The U.S. Energy Information Agency projects that U.S. coal use will be flat or falling through 2040 as coal is displaced by renewable energy sources and cheaper natural gas. In the EIA’s analysis, coal use declines even without policy proscriptive such as the Environmental Protection Agency’s Clean Coal Plan, which the Trump administration is in the process of challenging and revising. One way to solve coal’s decline would be add an incentive to burning it. Gov. Justice’s plan would do just that, providing $15/ton in federal funds for Appalachian coal. That could go a long way toward making coal competitive, but perhaps not far enough. Recent EIA coal prices put Central Appalachian coal at $52.60/ton and Northern Appalachian coal at $45.65/ton.Even taking $15/ton off that price would not make those grades competitive with the $11.55/ton cost of the nation’s most popular coal from Wyoming’s Powder River Basin.But Justice says cost could help prevent a possible disaster if Western coal supplies were to be disrupted. “If you’re all on gas or you’re all on gas and western coal and somebody puts a bomb at a gas junction point or somebody puts a bomb on a bridge coming from the west you could very well lose the entire eastern power grid,” he said, according to the news outlet.  Justice is not alone in using coal as a hedge for national security risks over pipelines and other infrastructure. U.S. Environmental Protection Agency Administrator Scott Pruitt said utilities needed to store "solid hydrocarbons onsite" to call on during times of peak demand, raising concerns about the vulnerability of a grid system heavily reliant on natural gas. Justice recently switched political parties, registering as a Republican, in conjunction with President Donald Trump’s visit to West Virginia.

Justice says coal plan a matter of national security: — Gov. Jim Justice has been to the White House twice in the last three weeks for discussions on his plan to boost the use of coal produced in the eastern coalfields. Justice is proposing what he calls a homeland security incentive that would protect the eastern power grid.  “The federal government would pay our power plants for every ton of coal that they buy that’s a Central (Appalachian) ton or Northern (Appalachian) ton of coal in order to preserve our eastern coalfields,” Justice said. According to Justice, West Virginia and surrounding states with their three-foot high coal seams are having problems competing with higher seam coal mined in Illinois and western states that’s produced at a lower price. He said the more eastern utilities depend on western coal and natural gas the more the eastern power grid is vulnerable in case of a national security issue in the western part of the country. “If you’re all on gas or you’re all on gas and western coal and somebody puts a bomb at a gas junction point or somebody puts a bomb on a bridge coming from the west you could very well lose the entire eastern power grid,” Justice said. He said a $15 a ton subsidy to power utilities would create lots of coal jobs in West Virginia, Pennsylvania, Ohio, Virginia, Kentucky and Tennessee. Justice said the eastern coalfields need help for a variety of reasons and he fears they may not be able to survive another downturn. Justice said President Donald Trump and members of his staff listened to his plan during those two White House meetings. He admits though there’s a long way to go.

Fossil fuel subsidies are a staggering $5 tn per year -- Fossil fuels have two major problems that paint a dim picture for their future energy dominance. These problems are inter-related but still should be discussed separately. First, they cause climate change. We know that, we’ve known it for decades, and we know that continued use of fossil fuels will cause enormous worldwide economic and social consequences.Second, fossil fuels are expensive. Much of their costs are hidden, however, as subsidies. If people knew how large their subsidies were, there would be a backlash against them from so-called financial conservatives.A study was just published in the journal World Development that quantifies the amount of subsidies directed toward fossil fuels globally, and the results are shocking. The authors work at the IMF and are well-skilled to quantify the subsidies discussed in the paper.Let’s give the final numbers and then back up to dig into the details. The subsidies were $4.9 tn in 2013 and they rose to $5.3 tn just two years later. According to the authors, these subsidies are important because first, they promote fossil fuel use which damages the environment. Second, these are fiscally costly. Third, the subsidies discourage investments in energy efficiency and renewable energy that compete with the subsidized fossil fuels. Finally, subsidies are very inefficient means to support low-income households. With these truths made plain, why haven’t subsidies been eliminated? The answer to that is a bit complicated. Part of the answer to this question is that people do not fully appreciate the costs of fossil fuels to the rest of us. Often we think of them as all gain with no pain.

Interior Dept. scraps Obama-era rule on coal royalties  (AP) — The Interior Department on Monday scrapped an Obama-era rule on coal royalties that mining companies had criticized as burdensome and costly. The Trump administration put the royalty valuation rule on hold in February after mining companies challenged it in federal court. Officials later announced plans to repeal the rule entirely. The final repeal notice was published Monday in the Federal Register and takes effect Sept. 6.Repealing the rule "provides a clean slate to create workable valuation regulations," said Interior Secretary Ryan Zinke, adding that the repeal will reduce costs that energy companies would otherwise pass on to consumers.The decision reinstates rules in place since the late 1980s governing royalties paid by energy companies for coal and other minerals produced on federal and tribal lands. Interior remains committed to collecting every dollar due, Zinke said, noting that public lands are assets belonging to taxpayers and Native American tribes. The valuation rule, crafted under the administration of Democratic President Barack Obama, was aimed at ensuring that coal companies don't shortchange taxpayers on coal sales to Asia and other markets. Coal exports surged over the past decade even as domestic sales declined. Federal lawmakers and watchdog groups have long complained that taxpayers were losing hundreds of millions of dollars annually because royalties on coal from public lands were being improperly calculated.

Judge: TVA must remove coal ash at power plant — A federal judge on Friday ordered the nation's largest public utility to dig up its coal ash at a Tennessee power plant and move it to a lined waste site where it doesn't risk further polluting the Cumberland River.U.S. District Judge Waverly Crenshaw in Nashville ruled in favor of the Tennessee Scenic Rivers Association and the Tennessee Clean Water Network, saying coal ash storage at Tennessee Valley Authority's Gallatin Fossil Plant has been letting pollutants seep into the river for decades in violation of the Clean Water Act.As long as the coal ash remains at the plant about 40 miles from Nashville, dangers, uncertainties and conflicts will continue, Crenshaw wrote. However, he added that there's scant evidence so far of concrete harm beyond the mere risk and presence of pollutants.He wrote that removing the ash is the only adequate way to resolve an "untenable situation that has gone for far too long.""While the decision to build the Ash Pond Complex is in the past, the consequences of that decision continue today, and it now falls on the Court to address them," Waverly wrote. "The way to do so is not to cover over those decades-old mistakes, but to pull them up by their roots. TVA, as the entity responsible for the ponds, must be the entity to do so."TVA has said it would cost roughly $2 billion for TVA to excavate and truck out the ash. Spokesman Scott Brooks said it's too soon to say if TVA will appeal the ruling, and the utility is reviewing the order. Brooks pointed out that the court noted no evidence of adverse human health or environmental impacts from the coal ash ponds. TVA has said it would cost about $230 million and may be safer and more environmentally friendly to keep the ash where it is and cover it with a cap

Feds begin 'information gathering' work for Yucca nuclear waste site | TheHill: Federal officials have voted to begin “information gathering activities” related to the Yucca Mountain nuclear waste depository site in Nevada. The Nuclear Regulatory Commission (NRC) voted 2-1 to begin holding “virtual meetings” and hear from the public about reconstructing a database of documents related to the proposed plan to store nuclear waste at Yucca Mountain. The commission voted to dip into its $634,000 Nuclear Waste Fund to support the information gathering efforts. The total cost of the activities could hit $110,000, the NRC said in a statement. The vote itself does not restart the licensing process for Yucca, which has been mothballed by federal law. But it comes as the Trump administration aims to restart that process. The White House has requested $120 million in funding next fiscal year to begin laying the groundwork for a waste disposal site at Yucca, despite opposition to the project in Nevada. In statements explaining their votes, NRC Chairwoman Kristine Svinicki and Commissioner Stephen Burns said the information gathering amounted to what Svinicki called “appropriate steps to develop the agency’s readiness to execute the budget requested” by Trump. In a statement, Rep. Dina Titus (D-Nev.) said the vote is “another sign the Trump administration continue to stack the deck against Nevada.”

Billions lost in nuclear power projects, with more bills due   — A decade ago, utilities were persuading politicians around the country to let them spend big to go nuclear. Expanding nuclear energy capacity was a sure bet, they said: Natural gas prices were rising, energy needs skyrocketing, and the federal government was poised to cripple carbon-emitting fossil fuel plants. With a dozen or more nuclear power projects being developed around the nation, cost savings could be found through simultaneous construction. State legislators were sold. In South Carolina, they even passed a law allowing utilities to charge customers up front and to recoup their investments even if the projects never produced a kilowatt. Several other Southern states also passed “pay-as-you-go” laws. This week, having spent more than $10 billion, executives with South Carolina Electric & Gas and Santee Cooper acknowledged that all their assumptions were wrong. Worse still: Consumers may have to pay billions more on the rusting remains of two partially-built reactors at the V.C. Summer Nuclear Station north of Columbia. “When we started, there was talk of a nuclear renaissance restarting a whole industry in the U.S.,”   Most of the 18 nuclear projects pending before the Nuclear Regulatory Commission a decade ago have been aborted or suspended indefinitely. None of the 7 projects the NRC licensed are operational. Only one is still being built, in Georgia, at a cost of $100 million a month. Southern Company financial documents filed Wednesday say the project, slated to cost $14 billion, could cost $25 billion or more if completed. 

South Carolina Gov. Henry McMaster, Santee Cooper say they have potential buyers for all or part of state power company | News | postandcourier.com: Gov. Henry McMaster and Santee Cooper say they have companies considering buying all or part of the state-run power utility that could help restart a $9 billion Fairfield County nuclear plant expansion abandoned last week after a decade of work. McMaster said Wednesday his office is talking with Duke Energy of Charlotte — South Carolina's largest power provider — as well as Southern Power Co. of Atlanta and Dominion Energy of Richmond, Va., about buying possibly all of Santee Cooper. "We’re working hard," McMaster said during a visit to a new solar power field in Aiken County. "Everything’s on the table. We have a state-owned utility. I have told these power companies that it is for sale, some or all. Everything’s on the table." Santee Cooper is conducting its own search for a buyer but only its 45 percent share of two unfinished reactors at the V.C. Summer site in Jenkinsville. Investor-owned South Carolina Electric & Gas controls the other 55 percent. "We have heard from two interested parties and are beginning our own outreach to others," Santee Cooper spokeswoman Mollie Gore said Wednesday. "We have a letter asking about interest in Santee Cooper's share of the project going out this week to about 50 utilities and other entities in the Southeast who could enter into power purchase agreements,” she added.

New Generation Nuclear Reactors Unlikely to Deliver on Design - New generation nuclear reactors, promised for the last 18 years by the U.S. Office of Nuclear Energy (NE) as a way to provide cheap and plentiful supplies of electricity, are unlikely to be fulfilled any time in the next 30 years.  That is the conclusion of university researchers who have used the Freedom of Information Act to obtain the program's budget history to find out what designs the government has spent $2 billion of public money on supporting.  Researchers described the research program as "incoherent" and said the government was "unlikely" to deliver on its mission to develop and demonstrate an advanced nuclear reactor by mid-century.  The study, published in the journal Environmental Research Letters , said much of the money that was supposed to be spent on civilian reactors was spent instead on supporting infrastructure, where the main focus was defense programs and not commercial opportunities.  The report's authors are not against nuclear energy. In fact, they are concerned that the government's failure to conduct a proper research program will lead to other nations taking the lead with the technology.  In theory, they said, the new breed of advanced reactor the U.S. is trying to develop are a promising carbon-free technology. They could operate for decades without refueling, and would generate smaller volumes of waste. However, "No such design is remotely ready for deployment today," said lead researcher Dr. Ahmed Abdulla from the University of California. "One example of this lack of vision is the gap that exists between the advanced reactor and advanced fuel programs. Investing in advanced fuels research is critical to developing a new nuclear reactor technology.  "However, NE has mostly invested in one fuel type while exploring multiple reactor designs, most of which do not use that fuel. This disjunction between the two programs is naturally problematic."

Radioactive Plutonium Detected In Air Near Hanford Nuclear Facility - Just ten days after the emergency at Washington's Hanford nuclear facility in early May, when a tunnel collapse prompted concerns about radioactive waste fallout as we described then in "'Serious Situation' After Tunnel Collapse At WA Nuclear Facility; Evacuation Ordered, No-Fly Zone In Place", we reported that the U.S. Department of Energy was scrambling to deal with a second emergency, when signs emerged that a massive underground double shell nuclear waste holding tank may also be leaking. As reported then, the tank in question - AZ 101 - was put into service in 1976, with a life expectancy of 20 years. Through 2017, it has been holding hot, boiling radioactive and chemically contaminated waste for 41 years.As a reminder, prior to this second leak, on May 9 workers found a 20 by 20 foot cave in of a tunnel used to store highly radioactive and chemically contaminated equipment from the Cold War-era. Worse still, as The Wall Street Journal reported at the time, a worker’s clothing was exposed to radioactive contamination at the site, in what Gov. Jay Inslee called an “alarming incident” that should prompt federal officials to expedite their cleanup of the decommissioned facility. Detection equipment was then used to check for contamination that might have become airborne and adhered to the workers. The radioactive material was found in three spots: on a worker's shoe, his shirt, and his pants in the knee area. According to workers in the field, the contaminated items were removed, bagged and appropriately disposed of.Following these incidents, all newsflow involving Hanford and its erratic leaks of radioactive material faded away, even as concerns grew that leaks at the radioactive facility were not being addressed.In retrospect, the concerns were justified because according to KATU2, on Tuesday health officials confirmed low plutonium levels in the air near the Hanford nuclear reservation. State of Washington's Department of Health's (DOH) workers analyzed samples taken June 8, 2017 and detected levels of contamination near the Rattlesnake Barricade, according to Hanford officials.

Tests show Hanford workers inhaled radioactive plutonium -- On June 8 approximately 350 Hanford workers were ordered to “take cover” after alarms designed to detect elevated levels of airborne radioactive contamination went off.  It was quickly determined that radioactive  particles had been swept out of a containment zone at the plutonium finishing plant (PFP) demolition site. The work is considered the most hazardous demolition project on the entire nuclear reservation. At the time Hanford officials called the safety measure “precautionary.” Officials from the U.S. Dept. of Energy, which owns Hanford, and the contractor in charge of the demolition, CH2M Hill, downplayed the seriousness of the event with statements including, it appeared “workers were not at risk”, “(the alarm went off) in an area where contamination is expected” and there was “no evidence radioactive particles had been inhaled” by anyone. The KING 5 Investigators have discovered those statements are incorrect. An internal CH2M Hill email sent to their employees on July 21 was obtained by KING. It states that 301 (test kits) have been issued to employees and of the first 65 workers tested, a “small number of employees” showed positive results for “internal exposures” (by radioactive plutonium). Several veteran Hanford workers were surprised by the number of people with internal contamination from a single event.  “In 36 years I’ve not seen this many people with internal exposure,” said a Hanford worker who wished to remain anonymous. “It’s a monstrous deal. And the workers know it, but they don’t want to say anything. They’re afraid.” “There’s no safe amount of plutonium you can inhale or ingest,”

State Sues US for $100M Over Failure to Remove Plutonium (AP) — South Carolina says it's filed its largest lawsuit ever against the federal government, seeking to force the U.S. Department of Energy to make good on a deal over removing plutonium from the state. The state said Monday that its lawsuit seeks to recover $100 million from the agency over failing to comply with an agreement to remove one metric ton of weapons-grade materials from the Savannah River Site. The state tried to recover the fines as part of another lawsuit over the government's inability to complete a nuclear fuel processing plant. But a judge ruled she couldn't force the government to pay up. The Energy Department didn't immediately respond to a message seeking comment.

We’re Edging Closer To Nuclear War - The nuclear football — a black briefcase containing an illustrated menu of doomsday scenarios — follows President Trump everywhere he goes. Like every U.S. commander-in-chief since John F. Kennedy, Trump has the sole authority to empty the American nuclear arsenal on any target, at any time, for any reason. James Mattis, his secretary of defense, must authenticate the order before it reaches the Pentagon, but should Mattis refuse to do so in an attempt to prevent missiles from launching, Trump can simply fire him on the spot and replace him with someone who will carry the order out. “There is no procedural or institutional mechanism that can stop a president from giving an order to use nuclear weapons,”  You can exhale, though: Most nuclear security experts I spoke to are not particularly worried by this aspect of the Trump presidency. They said that the risk of civilian-targeted nuclear weapon use has ticked up since 2015, but the causal pathway is a bit subtler than itchy fingers on the metaphorical red button. “I don’t know how this plays out,” said Rachel Bronson, executive director and publisher of the Bulletin of Atomic Scientists. “But he’s moving us into a much more uncertain time.”  The trouble is, nuclear risks are hard to measure quantitatively. The small sample size (two bombs dropped, ever) and rapidly changing technological and diplomatic contexts don’t exactly lend themselves to simple mathematical modeling. While such models do exist, they are “mainly an exercise in structuring one’s thinking, not something that would provide a ‘right’ answer,” according to Matthew Bunn, a professor at the Harvard Kennedy School.  But just because we can’t model our way to an exact answer doesn’t mean we should throw up our hands and move on. Since so many lives are at stake, even a tiny increase in the probability that nuclear weapons will be used is a really big deal, and that remains true even if our best predictions are somewhat imprecise.

"Black Sky Hazards": Feds To Wargame "Widespread Power Outages" And "Cascading Infrastructure Failures" - As the world teeters on the brink of a nuclear confrontation with North Korea, FEMA and the U.S. Department of Energy are preparing to wargame so-called "Black Sky Hazards" that could result in a "subcontinent scale, long duration power outage, with cascading failure of all our other increasingly interdependent infrastructures."  Here's how EarthEx2017described the exercise:Concerns have grown over the potential for severe malicious or natural “Black Sky” hazards associated with subcontinent scale, long duration power outages, with cascading failure of all our other increasingly interdependent infrastructures. This creates a grim and difficult dilemma: Restoration of any sector will only be possible with at least minimal operation of all the others.To deal with this deadlock, careful sector by sector and cross-sector resilience planning is crucial. However, such plans, to be effective, must be exercised. With the diversity and the national and global scale of the infrastructures we now depend on, this requires an unprecedented, multi-sector, national and international exercise series.EarthEx defines "Black Sky Hazards" as a "catastrophic event that severely disrupts the normal functioning of our critical infrastructures in multiple regions for long durations."  Here are a couple of examples of things EarthEx is prepping for: (graphic) Of course, large-scale natural disasters could also result in similar widespread failures of critical infrastructure. According to former Florida Congresswoman Michelle Rehwinkel Vasilinda, "Black Sky Events," though largely dismissed as a remote possibility by most, will occur...it's just a matter of when, not if. 

14,995 nukes: All the nations armed with nuclear weapons and how many they have - North Korea may have more than triple the number of nuclear weapons that experts recently estimated, according to a story by The Washington Post.  The new count comes via a July 2017 report created by the US Defense Intelligence Agency. According to the newspaper, which obtained the document, "up to 60 nuclear weapons are now controlled by North Korean leader Kim Jong Un." It's a significant disparity compared to the 10 to 20 North Korean weapons the Stockholm International Peace Research Institute estimated in July.  A separate confidential report obtained by The Post also suggests that the isolated nation — now facing $1 billion of sanctions approved by the UN security council on Saturday — has miniaturized its nuclear warheads to fit on top of intercontinental ballistic missiles. Recent North Korean launch tests, meanwhile, hint that such missiles could reach as far as New York or Washington, DC.  The news comes amid strained relations between the US and Russia nuclear superpowers, which have reached a "low point" due to US accusations that Russia meddled in the US election and is involved with the use of chemical weapons in Syria.  President Donald Trump has also inherited a $1 trillion program to modernize US nukes, and Russia now strains its budget to do the same for its arsenal. (In regard to Russia's nuclear modernization, Trump has even said, "Let it be an arms race.")  The Bulletin of the Atomic Scientists took note of such nuclear rhetoric and proliferation in January by advancing its Doomsday Clock 30 seconds. The symbolic shift implies that humanity is now just 2 minutes 30 seconds away from an apocalyptic "midnight."  Below is a map that shows the best estimates of which countries have them and how many they have.

Youngstown Residents Push to Oust Corporations from Election Campaigns, Cap Contributions at $100 - In These Times - In their seventh attempt to put an end to the environmental threats the oil and gas industry pose to their land, water and right to self-governance, a community rights group in Youngstown, Ohio, is attempting to amend their city’s charter in order to ban corporate interference in their local elections.  With assistance from the Community Environmental Legal Defense Fund (CELDF)—a non-profit, public interest law firm that provides legal services to communities facing outside threats to their local environment, local agriculture, local economy and quality of life—the Youngstown Community Bill of Rights Committee has gathered and submitted the signatures required to get the initiative, explained below, on their November ballot.   The Aug. 7 CELDF press release, in part, reads:  The Youngstown Community Bill of Rights Committee drafted the initiative with the support of the Community Environmental Legal Defense Fund (CELDF). CELDF has been assisting Youngstown residents to advance their democratic and environmental rights since 2013, when residents launched their community rights work to protect themselves from fracking activities. Fracking threatens their drinking water and has caused earthquakes in the area.  The initiative states that the people of Youngstown recognize that “corporations use their disproportionate wealth to frame important issues and influence elections.” Therefore, the measure removes corporations from the election process. It also places candidate selection in the hands of voters rather than powerful political parties. It reinforces the separation of powers between the judiciary and other branches of government by removing the initiative’s content as grounds for blocking it from the ballot. Thus, if technical requirements are met, initiatives must be placed before voters. Tish O’Dell, the Ohio community organizer for CELDF, says, “The right to community self-government is an inalienable right—one that the American Revolutionaries fought and died to uphold. The right to vote is supposed to reflect our right to self-government. In Youngstown, that right is rendered meaningless when the people in the community are outspent in their issue campaigns 50:1 by corporate entities. Residents are ready to level the playing field and bring inalienable rights back to the real people who live here.”

New law could take failed anti-fracking issue off Youngstown ballot - (WYTV) – The Youngstown Community Bill of Rights expects to have two measures on the ballot in November but a new state law could block one or both from getting to voters.The anti-fracking proposal has failed six times in Youngstown but last month, the petition was presented again.“Ohio has had the right of citizen initiatives since 1912 so chartered municipalities, citizens, can do petitions when they feel the government is not protecting them,” said Susie Beiersdorfer, a member of the Mahoning County Board of Elections.One measure asks to prohibit fracking within city limits and that water funds be used for water quality and infrastructure, not downtown development.The second issue is for free and fair elections, taking out corporate money. Registered voters in Youngstown can donate up to $100 for candidates and ballot measures. The State Supreme Court ruled unanimously that citizens’ initiatives must be put on the ballot. That was right after a Community Bill of Rights measure was kept off the ballot. Now, a new Ohio law gives boards of election the chance to invalidate local proposals if they don’t follow state law. “This is not just about fracking and the oil and gas industry. We’ve seen it in education, seen it in health care, big AG with pesticides. So there’s many areas where citizens’ rights and nature’s rights need to be elevated above corporate rights,” Beiersdorfer said.  She anticipates the two measures could be kept off the ballot, which would start another legal challenge. “We believe this is an unjust law but until you can challenge a law, you just can’t say, ‘This is a bad law, get rid of it,'” she said. Beiersdorfer said the board is obligated to investigate if a petition falls within the scope of authority.

Through this beige office runs the Kremlin cash that funds U.S. anti-fracking activists, Republicans say -- – A couple of influential Republicans from Texas see a long trail of Kremlin money leading to a beige office building on a palm-lined street in Bermuda – and it has nothing to do with the investigations of Russian election meddling. The cash, tagged to an offshore shell company housed in a law office inside, was not intended for the 2016 presidential election. Rather, they believe, it was part of a “covert anti-fracking campaign” to foster global dependence on Russian gas. The theory, long a staple of alt-right websites and conservative groups, has been given new life in a recent letter from Texas U.S. Reps. Lamar Smith and Randy Weber, lawmakers with strong ties to the energy industry that has been the target of climate change activists opposed to hydraulic fracturing.In a case of dueling Russian conspiracy narratives, Smith and Weber are asking the Trump administration to investigate allegations that the Bermuda entity served as a secret cash conduit for environmentalists in the U.S.The allegations, spelled out in a letter to U.S. Treasury Secretary Steven Mnuchin, come amid growing public angst about Russia as a disruptive force on the world stage, not only in elections, but in Syria, the wider Middle East, and world energy markets. They also illustrate the unsettling confluence of fact versus fiction in an age of political polarization and competing media narratives.

Fracking is spreading invasive plant species, Penn State research says fracking is spreading non-native plants | Centre Daily Times: Researchers at Penn State have discovered in a recent study that Marcellus Shale fracking activity can aid in the spread of invasive, non-native plant species. The findings, published in July in the Journal of Environmental Management, are a result of research that began in 2012 and focused on 127 natural gas well pads on state forest land in the north-central part of the state. Lead researcher Kathryn Barlow, a doctoral candidate in Penn State’s department of plant sciences, said the team found that 61 percent of the wells studied have at least one invasive, non-native plant species growing around the edges of the well pads or along the sides of the access roads. Of the wells that are being colonized by invasive plants, 19 percent have more than one non-native plant, such as Japanese stiltgrass, reed canary grass and crown vetch, according to the study. In addition to tracking the plants using the survey protocol, Penn State analyzed the role fracking vehicle traffic plays in spreading the seeds. To reach the desired well depth, about 1,200 one-way truck trips are required to deliver the fluid needed for the process, Barlow said. The Penn State team measured how far the invasive plant seeds can blow based on the wind speed created by a passing vehicle. The team also discovered that the seeds can stick to the undercarriage of the vehicles, which Barlow said accelerated the spreading rate of the plant colonies. 

Driller files $5M suit against ‘Gasland’ resident, lawyers - A gas driller that was targeted with allegations that it polluted residential water wells in Pennsylvania has filed a $5 million lawsuit against a Pennsylvania resident and his lawyers, asserting they tried to extort the company through a frivolous lawsuit. Cabot Oil & Gas Corp. said Dimock resident Ray Kemble and his lawyers sought to harass and extort the Houston-based driller, attract media attention and "poison" the community by recycling "stale, settled claims" against the company. "Cabot will protect its rights and pursue justice against those who irresponsibly and maliciously abuse the legal system," George Stark, the Houston-based driller's director of external affairs, said in a statement Tuesday. Cabot's suit, filed Monday in Susquehanna County Court, takes issue with a federal lawsuit that Kemble and his lawyers filed in April but withdrew two months later. That suit accused Cabot of continuing to pollute Kemble's water supply. The company said the claims in Kemble's suit were the subject of a 2012 settlement between Cabot and dozens of Dimock residents — including Kemble — and were barred by the statute of limitations. Cabot's suit also alleged Kemble had breached the 2012 settlement by publicly talking about the company. Kemble, who's long been one of Pennsylvania's most visible and outspoken anti-drilling activists, did not immediately return a phone message Tuesday. Nor did the attorneys named as defendants in the suit, Charles Speer of the Speer Law Firm in Kansas City, Missouri, and Edward Ciarimboli and Clancy Boylan of Fellerman & Ciarimboli, which has offices in Philadelphia and northeastern Pennsylvania. Cabot's suit is the latest sign of a rekindling battle in Dimock, the small village that became ground zero in the national debate over drilling and fracking after residents accused Cabot of polluting the water nearly a decade ago. The community was featured in the Emmy-winning 2010 documentary "Gasland," which showed residents lighting their tap water on fire. Cabot said the methane in their water was naturally occurring.

Documentary tracks effects of fracking -- During the eight-year Obama presidency, there has been an extreme fossil fuel development that has put Americans in harm’s way. An estimated 17 million Americans live within one mile of at least one oil or gas well.  With this massive new drilling, rural America has been industrialized with pollution of air and water, leakage of methane at high rate into the atmosphere, and loss of property values and quality of life. Chemicals, heavy machinery, and violent explosions have injured the lowest paid workers. Because of poor training and lack of protective clothing, workers are being exposed to the toxic chemicals from the bedrock. The chemicals include heavy metals such as arsenic, radioactive substances, and hydrocarbons such as carcinogenic benzene. High pressure injections of waste water deep into the earth are causing earthquakes from Ohio to Texas.Drilling is tearing communities apart. Some residents make money, but others have had their property values ruined and have had their health compromised. Local communities such as Abida Springs, La., have found that zoning laws mean nothing. Landowners’ rights are superseded by ground and mineral leases. Fracking occurs under homes and property owners have no say over drilling on their property. California is the third largest oil producer of all the states. Because of the increased drilling of oil wells in farming areas, volatile chemicals are getting into the water for irrigation. Those chemicals are then getting into human food such as oranges and almonds. In Los Angeles, oil wells are being drilled in urban areas. The fumes are causing nausea, nosebleeds, headaches and respiratory problems in the residents of those neighborhoods.

New York's Fracking Ban Was Supposed to Set a Precedent-- but Gov. Cuomo Is Going Back on His Word -- New York banned high-volume hydraulic fracturing (fracking) two years ago, in a victory for persistent anti-fracking activists and a potential precedent for other states. Now, however, the state is poised to begin operating a power plant that will make fracking infrastructure fully operational throughout the state, completely undermining the ban. The $900 million power plant planned by Competitive Power Ventures (CPV) in Orange County, New York, requires permits for only two short pipelines before it may begin operating. CPV will be among the largest of New York's nearly 500 gas- and oil-fired power plants. Like more than half of currently proposed electricity generation in the state, this power plant will burn fracked gas from Pennsylvania's Marcellus Shale.Opponents charge that the plant is not needed and serves only to further push a warming world to the tipping point of climate-change catastrophe.On October 8, 2015, speaking with former Vice President Al Gore, New York Governor Andrew Cuomo said he would cut greenhouse gas emissions by 40 percent in the next 13 years, but climate scientists and engineers tell us CPV will emit 7 million tons of carbon-dioxide-equivalent pollution annually and add a full 10 percent from power generation to the state's current greenhouse gas inventory.  Natural gas produces less carbon dioxide to generate electricity than coal, but the methane leaked from gas wells, pipelines and compressor stations make fracked gas worse than coal for accelerating climate change.

Pipeline company could resume drilling in Pennsylvania under deal | TheHill: The developer of the Marine East 2 pipeline in Pennsylvania has reached a settlement agreement with the state and environmentalists that could let it resume underground boring. Under the deal, Sunoco Pipeline would have to re-evaluate construction plans for high-risk areas in an effort to prevent the clay slurry spills that occurred dozens of times in recent months during pipeline construction, particularly in vulnerable areas like wetlands, the Pittsburgh Post-Gazette reported. Regulators last month ordered a halt to all underground boring for the cross-state project in response to environmentalists’ challenges, which cited the spills. Sunoco, the developer, is a unit of Energy Transfer Partners, best known recent as the operator and developer of the controversial Dakota Access oil pipeline. The settlement was reached Tuesday night, but it still must get approval from a judge. A hearing on the matter had been scheduled for Tuesday, but it was postposed so the Judge Bernard Labuskes Jr. could review the deal, the Post-Gazette wrote. Sunoco agreed in the settlement to review 47 sites close to drinking water supplies, important natural features and other utilities, and to submit reports to the state about each review, along with the steps crews plan to take to reduce risk. The company also would have to notify nearby landowners before drilling and offer to test their water supplies. Energy East 2 is planned to carry natural gas liquids from drilling areas in the western part of Pennsylvania to the Philadelphia area for refining or further transportation. 

Pipeline Work Moving Steadily Across Valley - Pipeline work to move Marcellus and Utica shale natural gas continues in nearly every corner of the Upper Ohio Valley, as new data show the industry supported more than 333,000 jobs in Ohio and West Virginia in 2015, while contributing nearly $46 billion to the two states’ economies.Meanwhile, there are several billion dollars’ worth of interstate pipeline projects that are in some stage of development, whether they are still in the permitting process or construction is ongoing. These include the $5.1 billion Atlantic Coast Pipeline, the $3 billion Atlantic Sunrise, the $1.4 billion Leach XPress, the $2 billion Nexus Pipeline, the $4.3 billion Rover Pipeline, the $3.5 billion Mountain Valley Pipeline and the $2 billion Mountaineer XPress. These giant pipeline systems do not include the “transmission lines” that move natural gas from well sites and processing plants to the interstate pipelines, nor do they count the “gathering lines” that connect individual well sites to transmission lines.For several years, pipeliners have been working in both northern West Virginia and eastern Ohio. This work, combined with drilling and fracking, was part of the 10.3 million jobs and $1.3 trillion impact the industry made throughout the U.S. in 2015, according to the Washington, D.C.-based American Petroleum Institute. In fact, the API shows the number of jobs the natural gas industry supports has grown by 500,000 since 2011.    The average salary for one of these jobs is $101,181, according to the U.S. Bureau of Labor Statistics. (this, of course, is BS; as of July, oil and gas extraction only employed 180,000 in the US)

Energy Transfer executives see Rover Pipeline in home stretch -- Energy Transfer Partners' beleaguered Rover Pipeline natural gas project is expected to be in service by the end of November or early December, with full commercial service in January, company executives said Wednesday. Phase 1A of Rover -- from Cadiz to Defiance, Ohio -- is nearly done, with completion expected by the company in the coming days, executives said during a second-quarter earnings conference call. When finished, Rover will seek US Federal Energy Regulatory Commission permission to place those facilities into service.Phase 1B is awaiting FERC approval for one directional drill. With that approval in hand, the drill should be completed in about 40 days, and in-service authorization will be sought immediately after that, executives said. Rover Phase 2 is held up at FERC as well. "Assuming quick resolution by FERC regarding Phase 2, we expect to be in service by the end of November or early December with full commercial service in January," Energy Transfer CFO Tom Long said. Rover has faced regulatory setbacks after drilling releases into Ohio wetlands and demolition of a farmhouse that had been eligible for listing on a national historic registry. FERC initiated investigations related to both matters and ordered a stop to some directional drilling. The Ohio EPA has also proposed fines related to environmental mishaps and ordered remediation. And West Virginia regulators last month halted some operations in light of erosion and runoff problems. Any signoff to bring parts of the project into service will require first satisfying FERC. The agency on July 12 gave Rover a substantial list of environmental restoration work it would require before allowing Mainline A of the project to enter service. In addition, FERC has said that prior to authorizing future HDDs, commission staff "anticipates the development of a set of protocols to prevent future drilling and mud contamination."

Dominion: Cove Point LNG 95 percent complete - Dominion Energy said work on the Cove Point LNG export facility near Lusby, Maryland is 95 percent complete and on track to start service in the fourth quarter of 2017. All of the major equipment has been set in place with the focus now turning on commissioning activities, Dominion said in its July report. All of the five tower cranes used to transfer equipment onsite have been taken down and transported offsite, Dominion said, adding that all the barge loads and heavy haul deliveries have been transported. Thomas F. Farrell II, chairman, president and chief executive officer of Dominion Energy, said the company received “FERC authorization for hydrocarbon entry into four additional project areas, adding that over 90 percent of the project’s systems are now in the commissioning phase.” Speaking during the company’s second quarter conference call, Farell II said the company has received FERX permit to export the LNG produced during commissioning. “We have an agreement with a third party to provide the commissioning natural gas and to export commissioning LNG from a facility,” he said. He added that the facility will have a period of sustained LNG production during the fourth quarter before it starts commercial operations later in the year.Once it is completed, the liquefaction facility being built at its existing LNG terminal will have the capacity to produce 5.25 million metric tons of liquefied natural gas per year. The production capacity has been fully subscribed with Pacific Summit Energy, a U.S. unit of Sumitomo Corporation, as well as with GAIL Global (USA) LNG, a U.S. unit of India’s utility GAIL, under 20-year terminal service agreements.

Plan for natural gas pipeline under Potomac River in Western Maryland draws scrutiny - Baltimore Sun - A proposed 3.5-mile underground natural gas pipeline crossing far below the Potomac River in Western Maryland would provide a critical link, proponents say, between gas producers in Pennsylvania and manufacturers in West Virginia’s Eastern Panhandle.But opponents are calling on Gov. Larry Hogan and the Maryland Department of the Environment to reject the project because it would carry gas produced by hydraulic fracturing, or “fracking,” a practice state lawmakers voted to ban, while also threatening a river that provides drinking water to millions.  A group of activists in kayaks — “kayaktivists,” they call themselves — will paddle the Potomac with signs on Friday, the most recent action in a campaign against the project they hope will echo last summer’s protests of the Dakota Access oil pipeline in Standing Rock, N.D., and capture the governor’s attention.“It does pose a serious threat to drinking water,” said Denise Robbins, spokeswoman for the Chesapeake Climate Action Network. “This pipeline and fracked gas pipelines in general are becoming the new threat to this country. … It’s not going to benefit Marylanders whatsoever.” Maryland Environment Secretary Ben Grumbles said in a statement that state officials are “taking a hard look” at the proposal, which would run a pipeline underground across the narrowest part of the state near Hancock and under the Potomac River to Berkeley Springs, W.Va. The state will host a public hearing in the upcoming months to gather input before making a decision, Grumbles said.

In new trend, U.S. natural gas exports exceeded imports in 3 of the first 5 months of 2017 - The United States exported more natural gas than it imported in February, April, and May of 2017 according to the latest EIA’s Natural Gas Monthly. The United States has been a net natural gas importer (on an average annual basis) for nearly 60 years. Declining net pipeline imports from Canada, growing natural gas pipeline exports to Mexico, and increasing exports of liquefied natural gas (LNG) are all contributing to the nation’s ongoing shift toward being a net exporter.   The United States began importing more natural gas than it exported in 1958, when total natural gas trade volumes were much smaller. In October of that year, the TransCanada pipeline was completed, allowing Western Canadian natural gas to enter northeastern U.S. markets. Net U.S. natural gas imports from Canada peaked in 2007, averaging over 10 billion cubic feet per day (Bcf/d). More recently these volumes have been declining as domestic natural gas production from shale gas and tight oil formations has increased and displaced Canadian natural gas. Border crossings in Idaho and Montana make up the largest portions of natural gas entering the United States from Canada by pipeline, making up about 25% and 20%, respectively, in 2016.  While the United States remains a net importer of natural gas from Canada, U.S. exports to eastern Canada have been increasing steadily since 2000, when the Vector pipeline began service. The Vector pipeline, with a capacity of 1.3 Bcf/d, originates in Chicago and is currently supplied by natural gas from western Canada, Texas, Louisiana, and Oklahoma. It delivers natural gas at the border in St. Clair, Michigan, and into Ontario’s Dawn hub. U.S. natural gas exports from Michigan, mainly through the Vector pipeline, make up most of the natural gas export volumes by pipeline to Canada.  Since 2011, several pipeline reversals have contributed to the growing volume of natural gas delivered into Canada from both the Midwest and Northeast. In March 2017, total U.S. natural gas exports to Canada were 3.21 Bcf/d, near the monthly record of 3.25 Bcf/d reached in December 2012; U.S. exports declined in both April and May.  Natural gas exports to Mexico from the United States also reached near-record levels in the first five months of 2017, averaging 4.04 Bcf/d.

United States expected to become a net exporter of natural gas this year - EIA’s latest Short-Term Energy Outlook projects that the United States will export more natural gas than it imports in 2017. The United States has been a net exporter for three of the past four months and is expected to continue to export more natural gas than it imports for the rest of 2017 and throughout 2018. The United States’ status as a net exporter is expected to continue past 2018 because of growing U.S. natural gas exports to Mexico, declining pipeline imports from Canada, and increasing exports of liquefied natural gas (LNG). The United States is currently the world's largest natural gas producer, having surpassed Russia in 2009. Natural gas production in the United States increased from 55 billion cubic feet per day (Bcf/d) in 2008 to 72.5 Bcf/d in 2016. Most of this natural gas—about 96% in 2016—is consumed domestically. Abundant natural gas resources and large production increases have created opportunities for U.S. natural gas exports. With a near doubling of U.S. export pipeline capacity to Mexico by 2019, EIA expects U.S. natural gas exports to increase, though they should remain well below the available pipeline capacity. Mexico’s national energy ministry (SENER) expects to increase its natural gas use for electric power generation by almost 50% between 2016 and 2020. Mexico's domestic natural gas pipeline network is undergoing a major expansion, primarily to accommodate new natural gas pipeline imports from the United States. In addition, supplies of natural gas out of Appalachia into the Midwestern states are likely to gradually displace some pipeline imports from Canada as well as increase U.S. pipeline exports to Canada from both Michigan and New York. Several new pipeline projects, including the Rover and Nexus Gas Transmission pipelines, are also being developed to increase takeaway capacity from the Marcellus and Utica supply regions that span parts of New York, Ohio, Pennsylvania, and West Virginia into the U.S. Gulf coast, Midwestern states, and eastern Canada.  EIA expects exports of liquefied natural gas (LNG) to increase. U.S. liquefaction capacity continues to expand as five new projects currently under construction—Cove Point, Cameron, Elba Island, Freeport, and Corpus Christi—come online in the next three years, increasing total U.S. liquefaction capacity from 1.4 Bcf/d at the end of 2016 to 9.5 Bcf/d by the end of 2019.

Biggest US Fuel Pipeline Fills Up as East Coast Tanks Drain -- Colonial Pipeline is back to business as usual -- with more demand to move fuels to the East Coast from Houston than it has space for.After running below capacity about 45 days starting in July, the largest gasoline pipeline in the U.S. has restarted its practice of rationing space. The company froze shippers’ ability to nominate more fuels this month to maintain the line’s five-day cycle shipping frequency, spokeswoman Malesia Dunn said by email.To be a big player in the U.S. gasoline market, it’s essential to have a gateway to the high-demand center surrounding New York City. Some traders supply that hub with foreign imports, but 1.3 million barrels a day move north on the Colonial Pipeline from the refining hub near Houston.Last week the arbitrage, or selling opportunity for European gasoline exports to New York, fell to the lowest level since January 2016, according to PVM Oil Associates Ltd data. Upcoming imports from Europe will also be stifled as the region’s largest refinery shut unexpectedly. Royal Dutch Shell Plc will attempt to restart one of two crude units at the Pernis refinery Friday. “Inventories of gasoline have been drawing down across the East Coast and now it makes sense to take more barrels through Colonial’s pipeline,”. There were big profits available to Colonial shippers in the early 2010s when New York gasoline prices were normally 10 to 30 cents a gallon higher than the Gulf Coast. But only the committed shippers were getting a piece of the action. It was like an overcrowded subway train -- outsiders were so desperate to ride that they’d pay the regulars for their seat. As more shippers began selling their space on the pipeline, a “line space” spot market emerged.The market’s fundamentals have since changed and Gulf Coast gasoline no longer carries a wide discount to New York as exports boom. Demand to ship on the line fell below capacity in July for the first time in six years.

Flood of gasoline supply heads to U.S. Northeast as driving season ends (Reuters) - As the U.S. summer driving season winds down, a wave of gasoline barrels is headed for the Northeast market from Europe and the U.S. Gulf Coast, which will squeeze profit margins for local refiners in the country's biggest fuel-consuming region. A string of inventory draws in the United States and a revival in gasoline demand alleviated a longstanding glut in the New York gasoline hub, drawing interest from shippers in Europe at a time when buying historically eases at the end of August. Expectation for increased flows pushed gasoline futures and margins to a two-week low after they surged last week to a more than three-month high. European exports to North America of gasoline and naphtha, which is used for blending into gasoline, will jump in the coming weeks to the highest in months. "Arbs were open for weeks in July and I think the paper hedges were put in place, but the ships were not fixed. So now you are seeing the ships getting fixed," one East Coast trader said. U.S. gasoline imports into the East Coast more than doubled to 910,000 bpd in the week ended Aug. 4, according to the U.S. Energy Information Administration. East Coast inventories jumped by 1.4 million barrels and remain above the five-year average. The Colonial Pipeline, which connects the Gulf Coast to the populous Northeast, also signaled that demand to haul fuel on its gasoline line recovered after falling below capacity in June for the first time in six years. Tuesday's restart of Europe's largest refinery, Royal Dutch Shell's 404,000 bpd Pernis refinery in Rotterdam, is expected to support European gasoline exports. Total East Coast imports are set to reach nearly 850,000 barrels per day (bpd) by the end of August, doubling from a month earlier, according to traders and shipping data.

USGC crude Mars climbs to 23-month high as market eyes OPEC technical meeting -- US Gulf Coast medium sour crude Mars rose to its highest assessed level in almost two years Monday on market anticipation of possible Venezuela crude sanctions, continued export demand and an OPEC meeting to discuss production cut compliance. S&P Global Platts' Mars assessment increased 10 cents/b day on day to WTI cash minus 45 cents/b, its highest level since August 31, 2015, when it reached minus 35 cents/b. The strength coincided with an OPEC meeting Monday to discuss stricter compliance with its production cut deal with 10 non-OPEC producers, as total output reached about 920,000 b/d above its normal ceiling of around 31.9 million b/d. Increasing output from Libya and Nigeria, both of which were exempt from compliance with cuts, has contributed to the rise in production. However, much of the crude produced by Nigeria is sweet, meaning any further production cuts on the part of OPEC members could serve to tighten an already stretched global sour crude market, according to a source. 

Permian Natural Gas Processing Plants and NGL Pipelines, Part 2 The utilization of NGL takeaway pipelines out of the fast-growing Permian is determined to a significant degree by the natural gas processing plants that the pipes are connected to. Midstream companies prescient — or lucky — enough to own NGL pipelines that extend out of the hottest, most productive sub-regions within the Permian’s Midland and Delaware basins are benefiting not only from higher NGL volumes now, but the likelihood of even fuller pipes as Permian production continues to ramp up. Today we continue our blog series on the NGL side of the Permian phenomenon with a look at existing gas processing plants in the play and their connections to NGL pipelines that move y-grade to storage and fractionators.  As we said in Part 1, it is primarily the pursuit of crude oil — not natural gas or natural gas liquids (NGLs) — that is driving the frenzy of drilling and investment in the multistacked, hydrocarbon-packed Permian’s Midland and Delaware basins. But the oil-focused wells being drilled and completed there also are producing large volumes of associated gas, most of it liquids-rich, wet gas loaded with NGLs that — once processed, delivered and fractionated into purity products like ethane, propane, butanes and pentanes+ — add considerable monetary value of their own. The Permian already is producing 2.3 million barrels a day (MMb/d) of crude oil, 6.5 billion cubic feet per day (Bcf/d) of dry natural gas and nearly 800 Mb/d of NGLs. Under RBN’s Growth Scenario, crude production is expected to rise to 3.7 MMb/d (~60%) by 2022, while gas output is seen rising to 12 Bcf/d (~90%). NGL production is projected to increase 75% over the next five years, to ~1.4 MMb/d.

 West Texas Ranchers Threaten Lawsuits Over Fracking - The Permian Basin, which by several accounts is the world’s second-largest oil field, still has plenty of oil and gas lying beneath its surface. Much of it still untapped because for decades, it has been difficult to extract. In recent years, however, fracking has made those deposits easier to harvest. And as explained recently in the Houston Chronicle, compared to other shale oil fields, that energy is relatively cost-effective to extract, even during this stubborn three-year spell of low fuel prices. Extracting that oil, on one hand, sounds like a great way to revitalize many economically struggling communities. As a result, established companies and startups alike seek to build pipelines that would transport fuel and water alike across long distances in order to tap into these resources. But companies leading this effort, including the Dan A. Hughes Company, are running into opposition by more and more citizens, ranchers, farmers and environmentalists – all of whom share a bevy of worries, from the lack of water for cattle and crops to potential threats that could be inflicted on popular recreation areas such as Balmorhea State Park. They cite concerns over water scarcity, as estimates have suggested the amount of water harvested to support the West Texas fracking boom has surged from 5 billion gallons in 2011 to almost 30 billion gallons last year – and that amount could double by the end of this year and more than triple by the end of this decade. Ranchers and farmers fear that the Permian Basin’s aquifers, most of which are believed to be interconnected, could all dry up as that water is diverted elsewhere – leaving ranches, farms and communities dry.

Millennials Are Killing the Oil Industry -- According to a recent report by pollsters EY, 57 percent of teens now see the fossil fuel industry as bad for society, and 62 percent of those aged 16 to 19 say working for oil and gas companies is unappealing. Other findings suggest that millennials dislike the oil industry the most of any potential employer, with only 2 percent of college graduates in the United States listing the oil and gas industry as their first-choice job placement. Given that a majority of millennials now also reject capitalism, the fact that we don't feel too much warmth towards the industry that’s been at its dirty, beating heart of it for 300 years shouldn’t come as a surprise. Millennials are now the largest part of the U.S. workforce, meaning their flight could spell massive problems down the road for the world’s most destructive companies. To win back the youth, a series of recent ads from the American Petroleum Institute, the fossil fuel industry’s lobbying arm, announced “This ain’t your daddy’s oil…Oil strikes a pose. Oil taps potential. Oil pumps life,” flashing pictures of products made with oil—like spray paint! Because young people like graffiti, right? Not more than we like being able to breathe air and drink water. Aside from having a few suspicions about an industry whose business model stands directly at odds with a habitable planet, millennial workers also want more from their jobs than a paycheck—including a sense of doing something halfway decent for the world. As the consulting group McKinsey wrote in its report on the industry’s future, “Millennials don’t just want personal career growth; they expect to make a positive contribution to society … If companies want to attract the best and brightest, they must design ways for employees to make an impact beyond the walls of the company.” As is the case with a host of other progressive issues, the overwhelming majority of millennials—91 percent—believe in climate change, and the vast majority support government action to do something about it. Because of this, there have been massive, millennial-led campaigns targeting the fossil fuel industry, like the one to divest major institutions’ holdings from coal, oil and natural gas companies.

From a Little-Known Shale Play in New Mexico, BP Gets a Gusher  (Bloomberg) -- While other natural gas drillers are paying a premium for acreage in prized U.S. shale formations across Texas and Pennsylvania, BP Plc may have just found a gem in a largely ignored corner of New Mexico. The London-based oil giant started producing from a gas well in New Mexico’s Mancos shale that could turn out to be a “significant new source of U.S. natural gas supply,” according to a statement Monday. The well averaged 12.9 million cubic feet a day in its first month, the highest output achieved in the San Juan Basin in 14 years, the company said. The well could bring gas explorers one step closer to unlocking a shale play that, according to the U.S. Geological Survey, is home to one of the nation’s largest reserves of the fuel. The shale boom that’s turning the U.S. into a net exporter of the heating fuel has so far left the Mancos behind as explorers seek out cheaper plays. But with acquisition costs in proven fields rising, they’re turning to less popular regions to get more for their drilling dollars. "Everyone is trying to find another play," James Sullivan, analyst at Alembic Global Advisors, said by phone Monday. BP bought assets in the Mancos in 2015. At the time, there were no gas rigs operating in the basin, according to data from oilfield service provider Baker Hughes. WPX Energy Inc. also has approximately 105,000 net acres in the basin, according to a company filing with the Securities and Exchange Commission. The well “gives us confidence to pursue additional development of the Mancos Shale, which we believe could become one of the leading shale plays in the U.S.,” Dave Lawler, chief executive officer of BP’s U.S. onshore oil and natural gas business, said in the statement.

Fracking New Mexico: BP Just Found 'Significant New Source of U.S. Natural Gas Supply' -- Amidst the continued dire warnings about climate change , censored scientists and stranded assets , the oil industry keeps on doing what it does best: keeps on belligerently looking for more oil and gas. Earlier this week, BP announced it had discovered what it is labelling a "significant new source of U.S. natural gas supply" in New Mexico in the Mancos Shale, just across from the Colorado border. "We are delighted with the initial production rate of this well," said Dave Lawler, CEO of BP's U.S. Lower 48 onshore business. "This result supports our strategic view that significant resource potential exists in the San Juan Basin , and gives us confidence to pursue additional development of the Mancos Shale." BP, which bought the lease only two years ago, said the area could become one of the U.S.' main shale areas. The San Juan Basin sprawls across the Colorado-New Mexico border. "While other natural gas drillers are paying a premium for acreage in prized U.S. shale formations across Texas and Pennsylvania, BP may have just found a gem in a largely ignored corner of New Mexico," Bloomberg reported.  For anyone fighting fracking , climate change and the shale industry in the U.S., it is significant because it could open up a whole new area of shale. According to the U.S. Geological Survey (USGS), "The Mancos Shale is a significant potential source of natural gas." A report the USGS published last year concluded that the wider Mancos Shale basin "contains an estimated mean of 66 trillion cubic feet of shale natural gas, 74 million barrels of shale oil and 45 million barrels of natural gas liquids ... This estimate is for undiscovered, technically recoverable resources." The previous estimate was just 1.6 trillion .

Keystone XL pipeline fate in balance as Nebraska opens hearings (Reuters) - Nebraska regulators opened a final hearing on TransCanada Corp’s (TRP.TO) proposed Keystone XL pipeline on Monday, a week-long proceeding that marks the last big hurdle for the long-delayed project after President Donald Trump approved it in March. The proposed 1,179-mile (1,897-km) pipeline linking Canada’s Alberta oil sands to U.S. refineries has been a lightning rod of controversy for nearly a decade, pitting environmentalists worried about spills and global warming against business advocates who say the project will lower fuel prices, shore up national security and bring jobs. Trump's administration handed TransCanada a federal permit for the pipeline in March, reversing a decision by former President Barack Obama to reject the project on environmental grounds. But the line still needs a nod from regulators in Nebraska – which would be the last of three states to approve its proposed path into the heartland. A lawyer for opponents of the line opened the hearing in front of the five-member Nebraska Public Service Commission on Monday morning by grilling an executive for the Canadian company about how the pipeline will be disposed of after its anticipated 50-year lifetime. "Do we have to clean up TransCanada’s abandoned pipeline?" attorney David Domina asked TransCanada executive Tony Palmer. 

Keystone XL foes question proposed route through Nebraska - The 1,179-mile crude oil pipeline has faced relentless criticism from environmental groups, Native American tribes and a well-organized minority of Nebraska landowners who don't want the project cutting through their property. Business groups and some unions support the Keystone XL, saying it will provide jobs and property tax revenue for local governments. Opponents argue that, if it wins approval, the Keystone XL should run along the same path as the original Keystone pipeline, a line through eastern Nebraska that was completed with little opposition in 2010. TransCanada's preferred route would carry crude oil roughly 275 miles through Nebraska, whereas the original Keystone route only stretches 210 miles, said Brian Jorde, an attorney for the landowners. Company officials have said their preferred route is the most direct way to transport oil from Alberta, Canada, to an existing pipeline in Steele City, Nebraska. Rerouting the pipeline would add millions of dollars to the project's $8 billion price tag. Because it would travel along a nearly straight path, company officials said their preferred route would affect the least amount of land. TransCanada considered other routes, including one that would have run along Interstate 90 in South Dakota, but rejected them because they were longer, said Meera Kothari, a company engineer. The most direct path "lends itself to a diagonal route through Alberta, Montana, South Dakota and Nebraska," Kothari said. The company has also argued that the route through neighboring South Dakota is already set, thus requiring it to cross the border at a point near Mills, Nebraska.

Trump promised to build the Keystone XL. Three votes in Nebraska could stop it. - In an Oval Office ceremony after pushing through the approval of TransCanada’s controversial Keystone XL tar sands pipeline, President Trump asked the company chief executive Russ Girling when work would start. The answer wasn’t that simple. TransCanada still needs to win the approval of state regulators. This week they got a taste of how difficult that could be as the Public Service Commission kicked off public hearings in Nebraska, the state where opposition to the $8 billion pipeline project has been strongest. Two days featuring TransCanada experts are to be followed by two days of experts who are opposed to the pipeline, claiming that the steel line would pose environmental dangers and arguing that there was no reason to force landowners to allow it to cross their property. At the same time, TransCanada must find oil producers ready to fill the 830,000 barrel-a-day 36-inch diameter pipeline running from Canada’s oil sands to a pipeline nexus in southern Nebraska. Nebraska might be TransCanada’s biggest obstacle. The pipeline, first proposed more than eight years ago, has touched a populist nerve and aroused concerns that a leak could contaminate farm land and pasture, the delicate Sandhills, or water supplies. “We still have a bunch of family farmers on the land that their ancestors homesteaded,” said Jane Kleeb, chair of the Nebraska Democratic Party and a long-time organizer of opposition to the Keystone XL .“They have a deep emotional and cultural tie to the land and feel a responsibility that they must protect it.” Many farmers and ranchers are angered by the idea of a foreign pipeline company using eminent domain, which the 2016 Republican Party platform criticized, to force them into letting large construction equipment plow a 50-foot-wide right of way to bury the pipeline about four feet below the surface.

Tribes ask court to shut down Dakota Access pipeline | TheHill: A pair of American Indian tribes are asking a federal court to immediately shut down the controversial Dakota Access oil pipeline. The Standing Rock Sioux and Cheyenne River Sioux tribes, whose reservations are near the route of the North Dakota to Illinois line, say that since a Washington, D.C., court found the Army Corps of Engineers did not conduct a proper environmental review of the project, shutting it down is the only proper course of action. “The question before the court now is whether the pipeline should continue operating, exposing the tribes to the very risks that the Corps will be examining, while this remand is underway,” the tribes wrote, referring to certain parts of the environmental review that the agency is redoing. “Under both the law of this Circuit as well as the history of this action, the answer is no,” they continued. “The Corps must prepare a new [environmental] analysis of key issues at the heart of this dispute and make a new decision based on a full and objective analysis. The only way to ensure the integrity of that process, and reduce the risks to the tribes that the process is supposed to be analyzing, is by applying the default remedy of vacatur — as virtually every court to face a similar situation has done.” The brief, filed late Monday in the District Court for the District of Columbia, came after Judge James Boasberg’s June ruling that the Army Corps’ review leading to its approval of the final piece of the pipeline was inadequate. Boasberg said the review was acceptable for the most part, but the Army Corps “did not adequately consider the impacts of an oil spill on fishing rights, hunting rights, or environmental justice, or the degree to which the pipeline’s effects are likely to be highly controversial.”

Tribes want Dakota pipeline shut, but offer fallback plan  -  bismarcktribune.com: American Indian tribes fighting the Dakota Access oil pipeline are asking a judge to shut down the line while more environmental review is conducted, but they've also presented a fallback plan should the judge disagree. The "alternative relief" that Standing Rock Sioux attorney Jan Hasselmen "reluctantly" proposed in court documents filed Monday includes increased public reporting of pipeline issues such as repairs, and implementation of a spill response plan — including equipment staging — at the Lake Oahe reservoir on the Missouri River, from which the tribe draws its water. The $3.8 billion pipeline built by Texas-based Energy Transfer Partners began moving oil from western North Dakota to a distribution point in Illinois on June 1, after President Donald Trump earlier this year pushed through its completion. U.S. District Judge James Boasberg later in June ruled that the Army Corps of Engineers largely complied with environmental law when permitting the pipeline but didn't adequately consider how an oil spill under Lake Oahe might affect the Standing Rock Sioux tribe. He ordered the corps to reconsider certain areas of its environmental analysis and is deciding whether to shut down the 1,200-mile pipeline through the Dakotas, Iowa and Illinois while the work is done. The corps and ETP have advocated for keeping the pipeline operating. The company maintains a shutdown would cost it $90 million each month and also impact the energy industry, consumers and government tax revenue. The corps says the agency expects to be able to substantiate its earlier determination that the pipeline poses no significant environmental threats. "Neither the corps (of Engineers) nor DAPL has ever communicated with the tribes about spill response planning," Hasselman wrote.

Dakota Access pipeline: Land restoration, cleanup 100% done in Iowa -   The Dakota Access pipeline project is 100 percent finished in Iowa, including cleanup and restoration of farmland, according to documents filed with the Iowa Utilities Board.Crude oil from North Dakota's Bakken oil patchbegan flowing through the pipeline in four states on June 1, but final restoration work has been underway since spring in four counties in north-central and northwest Iowa.Those counties included Calhoun, Sac, Buena Vista and Cherokee. Most of the pipeline project was finished in other parts of Iowa last summer and fall.Brant Leonard, an attorney representing Dakota Access in Des Moines, filed a letter with the Iowa Utilities Board last week which said all final right of way clean up has been completed in Iowa. However, certain construction repairs not included in categories of reportable work continue, including spot repairs to drainage tile or ditch lines, fixing low spots and reseeding specific areas, he said.The state board had issued an order in August 2016 that had required Dakota Access to file weekly statewide construction progress reports. The pipeline crosses diagonally through 18 Iowa counties for 346 miles. Because the required work has been finished, Leonard said Dakota Access will stop filing the weekly reports. Lisa Dillinger, a spokeswoman for Dallas-based Energy Transfer Partners, which developed the pipeline, said Monday that restoration work is now complete in all four states, including Iowa, North Dakota, South Dakota and Illinois. But certain post-construction activities continue in all four states, such as reseeding and site-specific repairs, she added.

Judge Accepts No-Jail Deal for Jill Stein in Pipeline Protest Case - NBC News: — A North Dakota judge on Wednesday accepted a plea agreement that spares former Green Party presidential candidate Jill Stein any jail time for protesting the Dakota Access oil pipeline nearly a year ago. Judge Gail Hagerty accepted a plea deal in which Stein pleaded guilty to misdemeanor criminal mischief and prosecutors dropped a misdemeanor criminal trespass charge. Stein will be on unsupervised probation for about six months and must pay $250 in fees. She had faced a maximum punishment of two months in jail and $3,000 in fines. Stein and her attorney did not respond to phone and email messages seeking comment. Morton County Assistant State's Attorney Brian Grosinger also did not respond to messages seeking comment on why prosecutors chose not to take the case to trial. Stein was charged for spray-painting a bulldozer at a construction site last September. She told The Associated Press in March that it was "very problematic to have this hanging over my head" and that she wanted the case resolved. She also said that she was willing to go jail but that's "not my preference, obviously."

Changing crude flow landscape boosts Bakken differentials in Guernsey, Wyoming -- Bakken shale crude in Guernsey, Wyoming, traded this week at a premium to the front-month WTI calendar-month average for the first time since 2015. Traders said that the spike in value is the result of shifting crude flows in the region since the startup of the 520,000 b/d Dakota Access Pipeline. Bakken in Guernsey was heard traded between WTI CMA plus 10 cents/b and flat to the average late Wednesday and Thursday. "I think it will go stronger," one Bakken crude trader said. "Traders need an incentive to ship there."Differentials for Bakken in Guernsey have been narrowing steadily since Dakota Access began commercial deliveries in June. The average for Bakken ex-Guernsey in July was WTI CMA minus 42 cents/b, compared to a pre-Dakota Access average of minus $1.31/b in May, according to S&P Global Platts data. Crude traders and analysts said that the price increase in Guernsey is not unexpected since more Bakken crude is being pulled over to Dakota Access, which carries crude from North Dakota to markets in the Midwest and Gulf Coast. "During the 2014 to 2016 timeframe we saw quite a bit of pipeline capacity added in PADD IV, which was followed shortly after by production falling in both the DJ and Bakken due to lower prices," said Jenna Delaney, an analyst with Platts Analytics' Bentek Energy. "This has resulted in the overall pipeline system in PADD IV being utilized at around 50% over the past year. Then, you throw Dakota Access on top of that, and even more barrels are diverted away from Guernsey. With so much spare takeaway capacity available, it's not surprising that differentials have compressed.

As Hilcorp plans to drill in Arctic waters, a troubling trail of violations surfaces —In the energy industry, Hilcorp has built a reputation for fast growth, big profits and making people rich.  Founder Jeffery Hildebrand has become a billionaire, rising up the ranks of the hundred richest Americans.  In regulatory circles, however, and among environmentalists, Hilcorp has become known for different reasons. As the company has bought up older oil and gas fields from bigger companies, a business strategy known as "acquire and exploit," it has amassed a troubling safety and environmental track record in Alaska and several other states. As soon as the company started working in Alaska in April 2012, it began to accumulate violations. By October 2015, the Alaska Oil and Gas Conservation Commission (AOGCC), the main industry regulator in the state, had documented 25 instances in which Hilcorp violated its regulations, prompting a reprimand that had little of the bureaucratic blandness typical of regulatory notices. "The disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska operations and virtually assured the occurrence of this violation," the chair of the commission wrote to the company in November 2015. "Hilcorp's conduct is inexcusable." Whether Hilcorp is a model for its industry or a business with an endemic disregard for rules is a question that will only grow in importance. The company is already the biggest producer in Cook Inlet, where it bought up some of Alaska's oldest oil and gas facilities. Next it plans to drill new wells in pristine Arctic waters, pursuing a technically challenging project acquired from BP in 2014. This undertaking would expand North Slope production into the federal waters of Alaska's Outer Continental Shelf for the first time, just as the Trump administration tries to open more of the Arctic, including the nearbyArctic National Wildlife Refuge, to petroleum development. A review by InsideClimate News of thousands of pages of government documents, along with interviews of people who work in, regulate and watchdog the industry, reveals a string of Hilcorp incidents that harmed the environment or put workers in danger. The regulatory record portrays a company that critics say prioritizes an aggressive expansion in Alaska while repeatedly falling short on compliance.

Oil company works to contain leak in Alaska’s North Slope (AP) — A Texas-based oil and gas company that last year said it discovered at least 6 billion barrels of oil under its land in northern Alaska is cleaning up more than 7,000 gallons (26,500 liters) of oil that leaked from a well.Alaska's Energy Desk reports (http://bit.ly/2vRX1SC ) that Caelus Energy originally thought the spill in mid-June was just 5 gallons (19 liters).Tom DeRuyter, who is overseeing the response to the leak, says the Alaska Department of Environmental Conservation thinks most of the spill was contained to the surrounding gravel pad, but about 3 gallons (11 liters) of oil made it out to the tundra.Cleanup on the spill is ongoing. Caelus officials declined to be interviewed, but the company stated it is working with the state department to minimize damage.

U.S. shale breakeven price revealed around $50: Kemp (Reuters) - U.S. shale producers need a WTI oil price around $50 per barrel to break even, according to an analysis of financial statements for the second quarter.Fifteen of the largest shale oil and gas producers reported total net losses of $470 million for the three months between April and June when benchmark WTI prices averaged $48.Total losses were down from $3.7 billion in the first three months of the year and $7.4 billion in the same period in 2016, according to earnings statements published in the last week (http://tmsnrt.rs/2ftmgnd).Nine of the companies in the sample reported positive net income in the second quarter, down from 10 in the first quarter, but well up from none in the same period last year.Shale companies have staunched the losses thanks to a combination of cost cutting, improved efficiency and the rise in oil prices.But there is considerable controversy about how high prices need to be for shale producers to cover all their costs and earn a return for their investors.Some firms claim they can break even and even make large profits with benchmark WTI prices below $50 or even $40 per barrel.It remains unclear if these figures apply to full lifecycle costs (including overheads) and all the parts of all the shale plays (or just the most productive sweet spots).However, Harold Hamm, chief executive of Continental Resources CLR.N, a large shale producer in North Dakota and Oklahoma, has said prices need to be above $50 to be sustainable.Prices below $40 would cause drillers to idle rigs again, Hamm said in a television interview earlier this summer ("Harold Hamm warns oil prices below $40 will idle U.S. drilling", CNBC, June 28).Following a cyclical downturn between the middle of 2014 and the middle of 2016, the oil market has discovered the breakeven price for the U.S. shale sector. Some shale producers have lower breakeven prices than the average, and some higher, but the sector as a whole seems to need around $50 to grow production profitably.

$50 oil ‘magic’ boosts sea drillers’ hopes of vying with shale | GulfNews.com: The “magic” of $50 oil is now in the sights of deep-sea drillers as they try to lure customer spending from shale wells on land.And after more than three years of pain, that prospect has some investors excited. Transocean Ltd rose the most in more than eight months after the world’s biggest provider of offshore rigs predicted explorers could soon shift their spending from land to sea as crude futures inch closer to the key level. Shares of other deepwater service providers like Diamond Offshore Drilling Inc and Noble Corp Plc also surged on the heels of Transocean’s rally.“Break-even costs in multiple deepwater basins around the world are consistently coming in below $50 and are now often around, if not below, $40,” Chief Executive Officer Jeremy Thigpen told analysts and investors Thursday on a conference call. “Deep-water break-evens are starting to compare favourably with onshore, which by the way is now experiencing some fairly significant price inflation across most products and services.”The global oil downturn hit offshore drillers with the double whammy of a drop in customer demand for their services and a glut of new rigs rolling out of shipyards. More than three quarters of Transocean’s sales have been carved away since hitting a peak of $3.3 billion at the end of 2008, according to data compiled by Bloomberg.A little more than half of the oil industry’s 817 offshore rigs were working in the second quarter, down from the 92 per cent utilisation rate for global rigs in 2008, Jud Bailey, an analyst at Wells Fargo, wrote last month in a note to investors. 

US crude output to average 9.35 mil b/d in 2017, 9.91 mil in 2018: EIA - Higher production of light sweet crude from Libya, Nigeria and the US in July could be contributing to a price squeeze between light and medium crudes, the US Energy Information Administration said Tuesday. Libyan crude output jumped 19% to 1.01 million b/d in July, from 850,000 b/d in June. Nigerian production increased 6% to 1.66 million b/d in July, from 1.56 million b/d a month earlier, EIA said in its Short-Term Energy Outlook. US crude production increased a more modest 1% to 9.43 million b/d, compared with 9.32 million b/d in June, the report said. The increases come as voluntary production cuts by OPEC and non-OPEC countries tightens supply of medium sour and heavy sour barrels. "As a result, over the past several months, the usual premium that light sweet crude oils command over medium and heavy crude oils has declined in many regions around the world," the report said. EIA continues to expect US production to rise over the next two years and cross the 10 million b/d threshold in November 2018. It sees output averaging 9.35 million b/d in 2017, up 20,000 b/d from last month's outlook, and 9.91 million b/d in 2018, up 10,000 b/d from last month. "US oil production growth could slow as some US energy companies plan less investment spending for the rest of this year and the number of drilling rigs has recently increased at a slower clip," EIA Acting Administrator Howard Gruenspecht said in a statement. OPEC crude production held steady in July at an average 32.93 million b/d, compared with 32.61 million b/d in June, despite the sharp increases in Libya and Nigeria. Saudi Arabia produced 10.2 million b/d in July, steady from 10.15 million b/d a month earlier. The agency expects OPEC output to average 32.53 million b/d in 2017 and 32.96 million b/d in 2018.

Are Strong U.S. Crude Inventory Draws Sustainable? - Arthur Berman - The decline in U.S. comparative inventories since February is the most significant oil market development since prices collapsed three years ago. It means that U.S. demand has exceeded supply for most of the last 5 months. The main cause is lower net imports, not higher domestic consumption, and that is probably not sustainable.  Comparative inventory (C.I.) is the difference between current storage levels of crude oil plus a select group of refined products, and their 5-year average for the same weekly time period (Figure 1). It is an indicator that normalizes seasonal variations in production, consumption and refinery utilization. Figure 1. Comparative Inventory Is The Difference Between Stock Levels & Their 5-Year Average. C.I. is the key to understanding oil prices yet few analysts use or even discuss it. Instead they try to explain price fluctuations by events in the daily news cycle or by simple year-over-year comparisons. The negative correlation between C.I. and WTI price is strong. The 121 million barrel (mmb) increase in C.I. that began in June 2015 corresponded with a decrease in oil prices from $60 to $28 per barrel (Figure 2). The subsequent decrease in C.I. from April to July 2016 corresponded to an increase in oil prices from $28 to $50 per barrel. Figure 2. Strong correlation between Comparative Inventory and WTI Prices.  U.S. comparative inventories have fallen more than 104 million barrels since mid-February 2017. Average weekly withdrawals of 4.3 mmb of crude oil and refined products indicate that demand has exceeded supply by almost 600,000 barrels per day (b/d) over the past 24 weeks. Figure 3 shows the same C.I. vs. price data as a cross-plot (with the time dimension suggested by the light blue connecting lines). The resulting “yield curve” (Bodell, 2009) offers a structure for organizing seemingly random variations in oil prices. The yield curve does not provide a precise solution to comparative inventory vs. price trends. Nor does it represent a simple regression fit although the data correlate systematically in time. Interpretation based on experience is required because much of the apparent data scatter is due to sentiment-based fluctuations in price. Nevertheless, the C.I. vs. price yield curve presents a unique framework and context for prices and price trends. Because it reflects movement of oil volumes in and out of storage, it integrates true demand and supply variations with price. It also places probabilistic constraints on future price movements.

US EIA raises gas market production estimates -- The US Energy Information Administration nudged up its natural gas production estimates for the fourth quarter and coming year amid rising demand from the generation sector and a boost in exports. The agency, in its August Short-Term Energy Outlook Tuesday, raised by 840 MMcf/d to 82.1 Bcf/d its natural gas marketed production estimate for the US in Q4 2017. "US natural gas production growth is expected to accelerate over the next two years, with growth rates over 2% in 2017 and over 5.5% in 2018," said EIA Acting Administrator Howard Gruenspecht in a statement accompanying the outlook. "Forecast record natural gas production in 2018 coincides with an expected rise in electricity generation from natural-gas fired power plants and a 23% increase in US natural gas exports," he added. From 2017 to 2018, EIA projects US gross exports of gas will rise to 10.62 Bcf/d from 8.66 Bcf/d. The 2018 estimate is up 5.3% from the prior forecast. The agency raised its production estimate 210 MMcf/d to 78.91 Bcf/d for full-year 2017, and raised its 2018 estimate 1.01 Bcf/d to average 83.3 Bcf/d. Overall, it forecast that dry gas production would average 73.5 Bcf/d in 2017, up 1.2 Bcf/d from 2016 levels, and that gas production in 2018 would rise 3.9 Bcf/d above the 2017 level. EIA, however, lowered its Q3 production estimate 150 MMcf/d to 79.65 Bcf/d. Short-term natural gas price estimates were lowered from July's outlook, although EIA is still expecting prices to rise in 2018 on growing consumption and exports. EIA lowered its forecast for Q3 Henry Hub natural gas spot prices to $2.99/MMBtu, 9 cents below its July estimate, and lowered its Q4 estimate to $3.17/MMBtu, 7 cents below its July estimate. "Higher natural gas exports and growing domestic natural gas consumption in 2018 contribute to the forecast Henry Hub natural gas spot price rising from an annual average of $3.06/MMBtu in 2017 to $3.29/MMBtu in 2018," the report said. Those figures were trimmed from EIA's July forecast by 4 cents and 11 cents, respectively.

US natural gas output will be up in 2017; still below the 2015 record --(Reuters) - The U.S. Energy Information Administration (EIA) on Tuesday projected dry natural gas production would rise in 2017 after falling in 2016, while gas consumption would decline in 2017 after rising to a record high last year. EIA projected dry gas production would rise to 73.48 billion cubic feet per day (bcfd) in 2017 from 72.29 bcfd in 2016, according to its Short Term Energy Outlook in August. That EIA production forecast was higher than EIA's 73.30-bcfd forecast in July but shy of the record high 74.14 bcfd produced on average in 2015. Annual production declined in 2016 for the first time since 2005 as low energy prices in 2015 and 2016 reduced drilling activity. EIA also projected U.S. gas consumption would fall to 72.62 bcfd in 2017 from a record 75.11 bcfd in 2016. The 2016 high was the seventh annual demand record in a row. If correct, that would be the first decline in usage since 2009. EIA projected both production and consumption would rebound in 2018 to record highs with output hitting 77.34 bcfd and usage reaching 75.79 bcfd. EIA said the United States would become a net exporter of gas on an annual basis in 2017 as sales of liquefied natural gas and pipeline flows to Mexico increase. The country was last an exporter on an annual basis in 1957.In the electric space, EIA projects coal will retake the title as the primary fuel for power generators in 2017 as gas prices increase. 

Switching from coal to natural gas will not save our planet - Bill McKibben - MOST magic tricks and confidence games mostly work the same way — a little bit of misdirection to get the audience looking in the wrong direction. And some of the finest magicians at large in America today are its natural-gas salesmen, who have worked hard to reassure us that they’re part of the solution to the global warming crisis. To understand why that’s a ploy — to understand why they’re in fact helping drive the heating of the planet — you have to pay close attention. The basic move is to insist that natural gas helps cut carbon emissions.  This is true on the surface. As America’s power plants have replaced coal with fracked gas, carbon emissions have fallen because natural gas produces half as much CO2 as coal when you burn it. The problem is, carbon emissions are not the only thing that drive global warming. There’s another gas that does the job even more powerfully: CH4, or methane, which is the scientific name for natural gas. If it leaks unburned into the atmosphere, then methane traps heat about 80 times more effectively, molecule for molecule, than CO2. The point of this chemistry lesson is: If as little as 3 percent of natural gas leaks in the course of fracking and delivering it to the power plant through a pipe, then it’s worse than coal.  And, sadly, it’s now clear that leakage rates are higher than that. In January 2013, aerial surveys of a Utah fracking basin, for instance, found leak rates as high as 9 percent. Data from a Harvard satellite survey showed that between 2002 and 2014, U.S. methane emissions increased more than 30 percent. In fact, some experts who have reviewed the data say that because of the boom in fracking and the conversion to gas, America’s total greenhouse-gas emissions may actually have gone up during the Obama years. And at least the Obama administration required drillers to keep track of how much methane they were leaking — one of the first acts of the Trump EPA was to scrap that requirement, apparently on the grounds that what you don’t know can’t hurt you. So, to summarize, because this is a subtle point that citizens, politicians and editors need to understand, given the importance of the debate: Natural gas is not reducing the amount of greenhouse-gas emissions. It is doing nothing to slow climate change.

Ethane Asylum Revisited - New U.S. Cracker Demand, Exports Will Strain Ethane Supply, Part 2 -- In the Energy Information Administration’s (EIA) latest ethane production stats — for the month of May — gas plant production of ethane exceeded 1.4 MMb/d for the first time. In the same month, ethane exports also hit a record at 191 Mb/d, and ethane demand for petrochemical production — you guessed it — hit still another all-time high, topping 1.2 MMb/d. All this is just the beginning. These numbers and the throughput of any midstream infrastructure transporting or fractionating ethane will continue to increase over the next two years as new, ethane-only crackers come online, ethane rejection dwindles and overseas exports of ethane ramp up. By 2020, U.S. ethane demand is expected to reach 2 MMb/d — up by two-thirds from where it stands now. Today we continue our series on rising ethane demand, how the new demand will be met and what it all means for ethane prices.  As we covered in Part 1 of this series, ethane is a unique market — it’s the only energy commodity that can morph from being sold as natural gas (for its Btu content) to being sold to petrochemical plants as a liquid feedstock. This chameleon-like attribute contributes to ethane’s volatility, both in terms of production volume and pricing. Because of ethane’s one-of-a-kind niche (and our fondness for ethane in the RBN blogosphere), we’ve been posting lots of blogs on the topic for years, going back to the original Ethane Asylum, which heralded the ramp-up in ethane rejection in the Shale Era. Also in Part 1, we discussed one of the most important market factors that will indicate how the ongoing ethane market transformation will play out. This is the ratio of the Mont Belvieu price of ethane to the Henry Hub natural gas price on a per-Btu basis — an indicator of the relative value of ethane as a petrochemical feedstock versus ethane sold as natural gas (ethane rejection). As a general rule, the higher the ratio of the ethane price to the natural gas price, the greater the volume of ethane recovered as a liquid feedstock for the petrochemical industry.   This time last year, the ratio was about 1:1, that is, ethane at Mont Belvieu was worth about the same as natural gas at Henry Hub. Today, that ratio is closer to 1.4:1, so ethane is worth 40% more than natural gas on a per-Btu basis. That’s a big difference, and so it’s no wonder that ethane production is on the rise.

A new, more competitive era for LNG shipping - Growth in LNG supply and demand, the ongoing restructuring of the LNG sector and other factors are giving new significance to the nearly 500 specialized, oceangoing vessels that transport the supercooled, liquefied natural gas around the world. It used to be that the vast majority of LNG was delivered in milk run-like fashion under long-term contracts between suppliers and buyers, but that’s no longer the case. Now, the LNG market is much less structured and more fluid, with spot-market sales becoming more common and with the captains of some LNG-laden vessels not sure where they will end up as they head out of port. Today we describe the ins and outs of the shipping sector that moves hundreds of millions of metric tons of LNG annually. Five years ago, in Export Boom or Import Echo — one of RBN’s first blogs about the potential for large-scale U.S. exports of liquefied natural gas (LNG) — we explained that the long-distance delivery of natural gas by ship is made possible and economic by liquefaction. Liquefaction is the process of supercooling natural gas into a liquid state, thereby reducing every 600 cubic feet of gas into one cubic foot of LNG. LNG is transported by special, purpose-built tankers with insulated cryogenic tanks that keep the liquid at about minus 260 degrees Fahrenheit, or about minus 160 degrees Centigrade. Cold, cold, cold indeed.

Giant pipes wash up on Norfolk beaches (video) Giant pipe segments have washed up on the coast of Norfolk. The 8ft (2.4m) diameter plastic pipes, with the longest beached segment 1,574ft (480m) long, washed up at Winterton and Sea Palling. They came loose as they were being towed to Algeria for a large project. The Maritime and Coastguard Agency say they pose no danger to the public and will be relocated offshore north of Lowestoft. They will then be towed to Norway.

Big Oil's dream of $65 billion hidden off Norway is fading away -  The oil industry has been salivating for years over Norway’s Arctic Lofoten islands, which could hold billions of barrels of crude. It will likely have to keep dreaming.The general election next month is unlikely to lift a deadlock that’s keeping a ban on drilling off the environmentally sensitive archipelago as more and more Norwegians are turning their backs on the industry that helped make the country one of the world’s richest.     Backed by unions and business, Norway’s two biggest parties, Labor and the Conservatives,  have long favored steps that could open up the area for exploration. But so far they have had to compromise with smaller parties that are determined to keep Lofoten oil-free. That’s because the area is a natural wonder. The waters off the rugged archipelago are home to the world’s biggest cold-water coral reef and a breeding area for 70 percent of all fish caught in the Norwegian and Barents seas, according to WWF. The islands also host mainland Europe’s biggest seabird colony. Opponents of oil exploration argue a spill could cause catastrophic harm and that Norway will run afoul of the Paris climate agreement if it expands exploration more.  Oil companies led by state-controlled Statoil ASA, the biggest Norwegian producer, say gaining access is key if the country wants to maintain production of oil and gas, which is forecast to fall again from 2025 after already dropping 12 percent since a 2004 peak. While the government estimates Lofoten could hold about 1.3 billion barrels of oil equivalent, industry group Konkraft has said resources could top 3 billion barrels. If it’s all crude rather than gas, that would represent at least $65 billion in sales value at current prices.

 Uniper CEO dismisses role of US LNG in Europe, slams US sanctions -- The head of Germany's Uniper -- one of the financiers of the planned Nord Stream 2 natuural gas pipeline from Russia to Europe -- on Tuesday dismissed the impact US LNG on the European gas market, saying it was too expensive and unreliable to be able to compete against Russian pipeline gas. Klaus Schafer, speaking to analysts following the release of Uniper's first-half results, also criticized the new US sanctions law that could see measures imposed against companies helping to build Russian energy export pipelines, calling for clarity from Washington on how and whether the sanctions would be implemented. The pipeline element of the new US sanctions law has been interpreted in Europe as a bid by Washington to promote US LNG exports -- President Donald Trump last month on a tour of Europe said US LNG could help European countries reduce their dependence on Russian gas. But Schafer said it was unlikely European gas buyers would warm to US LNG. "In the law's core are US strategic economic interests -- namely America's ambition to dominate the global energy market," Schafer said. "Russian pipeline gas has been a reliable source of supply in terms of both quantity and prices since the 1970s -- that's not the case with LNG," he added. Schafer said delivered US LNG to Europe -- on a full-cost basis -- was up to 50% more expensive than the price at the Dutch TTF hub, or Eur5-10/MWh higher. "Hardly anyone wants to pay this premium," he said. US LNG has been delivered to Europe since exports started in February 2016, with true costs much lower than those cited by Schafer given that companies can consider liquefaction fees and transportation costs as "sunk."

Brazil's promising pre-salt offshore wells costs about $8 per bbls. (Reuters) - Oil extraction in Brazil's promising pre-salt offshore wells costs about $8 per barrel, Petroleo Brasileiro SA Chief Executive Officer Pedro Parente said at an event in Sao Paulo on Tuesday. Discovered only 10 years ago, the pre-salt area has rapidly become the top priority for Petrobras and other oil majors holding exploration rights to some of its large reserves. Output from pre-salt wells surpassed the combined volumes from all other fields in the country for the first time in July. "Pre-salt, today, has an extraction cost of $8 per barrel. The problem was the delay in exploring pre-salt," Parente said. Parente also said the state-controlled company's new fuel pricing policy will reduce the chance of prices reaching below international parity. Petrobras has sharply reduced the price gap between the value of gasoline sold at its refineries and the spot price in the U.S. Gulf of Mexico since early July, when it announced changes to its pricing to adopt almost daily adjustments, according to fuel market experts.

Repsol, Statoil Pull Foreign Oil Workers From Venezuela -- One day after Venezuela allegedly squashed a "military rebellion", in anticipation of further political and social turmoil in the socialist nation, energy giant Repsol SA pulled all foreign workers from its fields in Venezuela, Bloomberg reports adding that Norway’s Statoil ASA also removed all expat staff.According to Bloomberg, Repsol field workers left the country in the past few weeks, with a skeleton expatriate staff remaining at the company’s offices in Caracas. Separately, Statoil withdrew its last three foreign workers before the July 30 election to ensure their safety, Erik Haaland, a company spokesman, told Bloomberg by phone. The immediate result of the departures will be an even bigger decline in Venezuela's oil output - the only remaining asset which Maduro can readily exchange for dollars - further exacerbating the country's financial crisis as the inflow of hard currency slows further.The departure of workers will be a concern to the government because oil output, which has tumbled over the past two years, accounts for 95 percent of Venezuela’s foreign-currency earnings. Repsol gets about 10% of its production from the country, where it owns a stake in the Carabobo heavy-oil field. The Spanish company also is a partner in the Perla project, Latin America’s largest offshore gas deposit, together with Eni SpA.  A spokesman for Rome-based Eni said the company is keeping only essential expatriate personnel in the country. It isn’t currently considering an evacuation but continues to monitor the situation, he said. In what some may consider employee discrimination, Repsol said it still has Venezuelan citizens working at its operations without specifying how many foreign staff had been in the country. Statoil also still has Venezuelans - but not foreigners - at its sites, Haaland said.

Hundreds of protesters storm Shell oil facility in Niger Delta   (Reuters) - Hundreds of Nigerians stormed a crude oil facility and gas plant owned by Shell in the Niger Delta on Friday demanding jobs and infrastructure development, a Reuters witness said. Echoing a common complaint in the impoverished swampland that produces most of Nigeria's oil, the protesters said they were not benefiting from the region's oil wealth and wanted an end to the oil pollution that has ruined much of the land. Soldiers and security guards did not disperse the crowd as it entered the Belema Flow Station in Rivers State, which feeds oil into Shell's Bonny export terminal. The company said it had evacuated staff late on Thursday and shut the facility when it became clear the protesters were on their way there. However, the army sent in 30 extra soldiers after protesters said they planned to stay at the facility for two weeks. One of the protest leaders, Anthony Bouye, said: "I am a graduate for about eight years without a job. Shell won't employ me despite us having so much wealth in our backyard." Shell said its "commitment to the welfare of host communities in the Niger Delta remains unshaken" and was working with authorities to resume operations at the facility.

India's BPCL makes its first purchase of US sweet crude for Oct delivery -- India's state-run refiner Bharat Petroleum Corp Ltd bought 1 million barrels of US WTI Midland sweet crude from the US for delivery in October, making it BPCL's first purchase of the sweet variety from the US, oil ministry sources said this weekend.The cargo was purchased from the Emirates National Oil Co., trade sources said. BPCL bought the cargo via a tender floated last month at a price linked to the Brent. The purchase price linked to the Brent was competitive against West African crude. Last Friday, BPCL also bought 1 million barrels of crude via a spot tender, the officials said but didn't provide details on origin and price.During the first half of July, BPCL bought 500,000 barrels each of Mars and Poseidon varieties of medium-to-high-sulfur crude for delivery to its Kochi refinery on the west coast of India between September 26 and October 15, 2017. BPCL bought the quantity via a tender that closed on July 14.BPCL made these purchases as the prices of the US varieties have turned attractive after the recent OPEC cuts and rising Shale oil in the US. BPCL makes 25%-30% of its overall imports of around 25 million mt/year through tenders for its four refineries in Kochi, Mumbai, Bina, and Numaligarh. Another state-run refinery, Hindustan Petroleum Corp. Ltd., also has plans to import US sweet crude in the next few months for its Vizag refinery in South India, company officials said.

Australia's east coast LNG exports to China hit record high in July - Australia's east coast LNG export hub Gladstone saw shipments to China hit a fresh record high in July, data from the Gladstone Ports Corporation released Monday showed. China-bound exports from Gladstone, home to all of Australia's east coast LNG exporters, totaled 1.04 million mt in July, up 1% from the previous high of 1.03 million mt in June and surging 63% year on year, the port data showed. The port ships cargoes from the Origin-ConocoPhillips 9 million mt/year capacity Australia Pacific LNG or APLNG, the Santos-led 7.8 million mt/year Gladstone LNG or GLNG, and Shell's 8.5 million mt/year Queensland Curtis LNG or QCLNG. All six trains across the three terminals have been up and running since APLNG brought its second train online last October. Its first train came online in January last year; QCLNG's two began production in January and July 2015 and GLNG's in October 2015 and June 2016, according to Platts Analytics. Total LNG exports from Gladstone stood at 1.68 million mt in July, down 2% from June but up 16% year on year, the port data showed. The highest monthly export volume to date was 1.75 million mt last December. China has been increasing its consumption of pipeline gas and LNG imports this year in an effort to reduce air pollution by weaning itself off coal. The second largest recipient of LNG from Gladstone in July was Japan at 259,508 mt, up 32% month on month but down 4% year on year, the data showed.

Prospect of Australia's first LNG import terminal gathers steam: AGL -- The prospect of the world's second-largest LNG exporter, Australia, developing its first LNG import terminal has gathered steam, with project leader AGL on Thursday naming a location and size for the facility. AGL has named Crib Point, near Melbourne in the state of Victoria, as the preferred site for the gas import jetty and pipeline that it is considering developing to shore up energy security and supply for customers in the region. "This doesn't signal the end of the feasibility studies for the proposed site but now accelerates the process," AGL's executive general manger for wholesale markets, Richard Wrightson, said. "This project will enable access to the world market for gas, injecting some much-needed competition into the Australian market, and help ease the tight gas supply," he said. The prospect of an LNG import terminal in Australia has raised eyebrows, considering the country is on course to potentially be the world's largest exporter of the fuel by 2019. It is in that same year that AGL, "if all goes to plan," will invest roughly A$250 million and start construction of the project, with an aim to begin operations by 2020-2021, Wrightson said. Australian LNG exports are expected to reach 55.79 million mt in 2017, before surging to 70.92 million mt as projects like Wheatstone LNG and Prelude FLNG go online, according to Platts Analytics. Victoria, where the project would be, is part of the same East Coast Australian gas market that the Australia Pacific, Gladstone LNG, and Queensland Curtis LNG projects at the Port of Gladstone, Queensland, are connected to. In the years since their development (the first LNG cargo departed Gladstone in January 2015, from QCLNG), the East Coast Australia gas market has faced rising costs of domestic gas and forecasts of potential shortages by the end of the decade. The federal government is currently in the process of determining whether or not it will restrict LNG exports next year, as a result.

More than meets the eye as China tops U.S. as biggest crude importer (Reuters) - How impressed should you be by China overtaking the United States as the world's largest importer of crude? The answer is quite a bit, but maybe not as much as you thought. China imported an average 8.55 million barrels per day (bpd) in the first half of 2017, above the 8.12 million bpd by the United States, according to government figures from both countries. The obvious takeaway from this is that the data highlights the shifting dynamics of the crude oil market, with Asia replacing the United States and Western Europe as the main demand centre, as well as the source of most of the growth in oil consumption. However, this trend has been in play for several years. All that has changed is we now have a set of numbers that confirm what was already known. What is more important is trying to understand the underlying drivers of Chinese crude demand and how these may develop in coming years. There are a few factors that, when taken together, give a slightly different perspective on China's rise to the top of global crude importers. These are China's ongoing, and significant, purchases of crude to fill its strategic reserves, the rise of its refineries as major players in the regional export markets for products, and the decline in China's domestic oil output.

Chinese refiners receive 5%-10% Saudi crude oil allocation cuts for Sep -- Various Northeast Asian end-users saw their crude oil term allocations from Saudi Arabia slashed for September, with two South Korean refining companies receiving around 10% cuts in monthly contract volumes for light and medium sour grades, market sources said Tuesday. South Korea's two biggest refiners SK Energy and GS Caltex have received around 10% September allocation cuts from Saudi Aramco, but Hyundai Oilbank is expected to be given full term volume that it had requested for the month, South Korean trade sources with direct knowledge of the matter told S&P Global Platts. The sources indicated that the reduction in crude allocations for September affected various sour grades including Saudi Arab Extra Light, Arab Light and Arab Medium. "Luckily, [Hyundai Oilbank] did not see any notable cuts in September Saudi crude allocation because [the company] only nominated [relatively] smaller amount for the month," a company source said. However, the source added that Aramco seemed to be limiting the volume of its crude exports to Asia, not just the US. "From what I gather, it wasn't just South Korean companies but the rest of North Asia. Margins are good lately and light sweet crude grades in Europe and Africa are all expensive ... [Middle Eastern crude] sellers have the upper hand this month," the source said. Chinese companies also saw significant cuts in their September term contract volumes from Aramco, with Unipec -- the trading arm of China's state-run oil giant Sinopec -- receiving cuts of around 5%-10% for Saudi Arab Light and Arab Heavy crude grades, a market source with knowledge of the matter said. Market sources also indicated that Chinaoil, the trading arm of state-run China National Petroleum Corp., could have received 5% or deeper cuts for medium and heavy grades, but full details could not immediately be verified. 

Nigerian oil output in July climbs to 2.06 million b/d -- Nigeria's average oil production including condensates, increased marginally to 2.06 million b/d in July, the country's petroleum ministry said Monday, as the OPEC member continued to ramp up production.The ministry said the country's crude output stood at 2.06 million b/d in July, up from 2.05 million b/d in June, and a sharp increase over the 1.6 million b/d output a year ago when production facilities were hit by attacks from Niger Delta militants. Nigerian oil output has climbed steadily following a respite in activity by militants demanding control of the region's oil resources. Loading of the popular export grade Forcados has resumed at its terminal in the Niger Delta after shutting for several months over the past year following attacks in February and November 2016. Producers including Seplat Petroleum, Eland Oil and Gas and Nigerian Petroleum Development Co. have all boosted their daily output of the grade.Natural gas production also rose to 7.81 Bscf/d in July from 6.74 Bscf/d in the preceding month. Nigerian National Petroleum Corp. Chief Executive Maikanti Baru said in July Nigeria was well on the way to surpassing its oil production, including condensates, target of 2.2 million b/d for this year, as more facilities shut at the height of militancy in the Niger Delta last year were restarted. Nigeria's Acting President Yemi Osinbajo last week stepped up peace talks following a threat by regional leaders to abandon the discussions that have helped curb violence against oil installations.

Oil slides as output rises at Libya's largest oil field | Reuters: (Reuters) - Oil prices fell as much as 2 percent on Monday on selling triggered by a rebound in production from Libya's largest oil field, along with worries about higher output from OPEC and the United States. Output at Libya's Sharara field was returning to normal after a brief disruption by armed protesters in the coastal city of Zawiya, the National Oil Corporation (NOC) said. The field has boosted Libya's oil production, which climbed to more than 1 million bpd in late June. Global benchmark Brent crude futures LCOc1 were down 26 cents, or 0.5 percent, at $52.16 a barrel at 2:05 p.m. EDT (1805 GMT) after trading as low as $51.37 a barrel U.S. crude futures CLc1 were down 34 cents, or 0.7 percent, at $49.24 per barrel, after seeing a low of $48.54 a barrel. Both contracts stood below levels hit last week, which marked their highest since late May. Doubts have emerged about the effectiveness of output cuts by the Organization of the Petroleum Exporting Countries and other big producers including Russia. OPEC output hit a 2017 high in July and its exports hit a record. "The petroleum markets are tipping toward the lower end of their recent trading range as oil producers meeting in Abu Dhabi have been slow to assure the market that compliance with this year’s production cuts will be improved, although we continue to note that adherence to the limits has actually been quite strong by historical standards,"

Iraq may need to justify OPEC fudge: Fuel for Thought -- Iraq is compliant with neither the spirit nor the letter of the OPEC-led agreement to cut oil production from January 1 this year. The question is whether it should be. With OPEC and non-OPEC technical experts set to meet to discuss faltering conformity, OPEC’s second largest producer may feel more than justified in its position, but among members those claims have a hollow ring. With millions of internally displaced people within its borders and the cost of being still at war with IS on its home soil, Baghdad has more reasons than most to expect tolerance as it needs funds to rebuild its nation. However, the country has tried to present a semblance of compliance by cutting crude oil exports rather than production. Adding up Iraqi production barrels isn’t as straightforward as it seems. For instance, since the start of 2016, Iraq’s Ministry of Oil has included production from the Kurdish region of Iraq as being ‘Iraqi oil’. Given its lack of control over this roughly 580,000 b/d output, Baghdad could legitimately claim that, at the very least, KRG oil should be treated separately. Moreover, Iraq carries a unique burden in that nearly a third of its exported oil is allocated as payment in kind to international oil company contractors involved in the development and operation of its producing fields. 

OPEC expects laggards to comply more fully with oil cut pact (Reuters) - OPEC expects greater adherence to its pact with non-OPEC producers to cut oil output after two days of meetings in Abu Dhabi aimed at boosting compliance with the accord. The Organization of the Petroleum Exporting Countries, Russia and other producers are cutting output by about 1.8 million barrels per day (bpd) until March 2018 to get rid of a glut and support prices. OPEC producers Iraq and the UAE have shown relatively low compliance with the deal based on figures from secondary sources OPEC uses to monitor its supply. Meanwhile, non-OPEC Kazakhstan and Malaysia have been boosting output in the last few months, according to the International Energy Agency. In Abu Dhabi, a panel comprising Russia, Kuwait and Saudi Arabia, plus officials from OPEC's Vienna headquarters, met individually with officials from Iraq, the United Arab Emirates, Kazakhstan and Malaysia. "Discussions were conducted in a constructive atmosphere and proved fruitful," OPEC said in a statement. "The conclusions reached with the countries at the meeting will help facilitate full conformity," it added, although it did not give details on how compliance would be increased. The meeting was a special session of the JTC, or Joint Technical Committee, which is monitoring adherence to the deal. A ministerial panel, known as the JMMC, met last month and instructed that the Abu Dhabi meeting be held.

 Hedge funds get bullish again on oil (third time lucky?): Kemp  (Reuters) - Hedge funds and other money managers are becoming bullish again about oil prices, for the third time this year, as investors conclude the market is showing clear signs of rebalancing. Hedge funds raised their combined net long position across the five major futures and options contracts linked to petroleum prices by 135 million barrels in the week to Aug. 1 (http://tmsnrt.rs/2fmeXOd). The combined weekly increase in net long positions across Brent, WTI, U.S. gasoline and U.S. heating oil was the largest since Dec. 6, immediately after OPEC announced it was cutting production. For the first time in months, the increase in the net long position was driven primarily by the creation of new long positions rather than covering of old short ones. Hedge funds raised their combined long position across the five major contracts by 95 million barrels to 951 million barrels, the highest level since April 18. Fund managers cut their combined short position across the five contracts by 40 million barrels to 239 million barrels, which was the lowest level mid-April. The same pattern of new long building and continued short covering was apparent across all the individual crude and fuel contracts. Hedge funds raised their combined net long position in ICE Brent and NYMEX and ICE WTI by 99 million barrels to 649 million barrels. Long positions were raised by 70 million barrels while short positions were trimmed by 30 million, according to regulatory and exchange data. Fund managers have boosted their net long position by more than 290 million barrels since the end of June to the highest level for more than three months. Funds now hold almost 4.5 long futures and options positions in Brent and WTI for every short position, up from a recent low of 1.95 at the end of June. Fund managers have also built up a large net long position in U.S. gasoline, a smaller one in U.S. heating oil, and a record net long position in European gasoil. 

Oil Stuck At $50 As OPEC Output Jumps - Oil prices faltered on Monday on concerns about slipping OPEC compliance, as well as news that a disruption in Libya had ended. "The petroleum markets are tipping toward the lower end of their recent trading range as oil producers meeting in Abu Dhabi have been slow to assure the market that compliance with this years production cuts will be improved,” Tim Evans, Citi Futures’ energy futures specialist, wrote in a research note. News that Saudi Arabia would cut oil exports (see below) helped steady crude benchmarks on Tuesday.  In a new report, investment bank Morgan Stanley pointed to tightening signs for certain crude oil blends, including the Urals blend and oil from Angola. The market is showing some optimism, and narrowing differentials for other benchmarks against Brent offer some evidence about tightening conditions. At the same time, Morgan Stanley noted that U.S. shale companies tend to hedge their production at $50 per barrel, which could provide resistance for further price gains.   In addition to Morgan Stanley, other analysts agree that $50 is a key threshold that starts to trigger new output from U.S. shale. More fields are profitable, drillers are more likely to move ahead with new projects, and crucially, they can hedge at that level. “I do think $50 is the line of demarcation,” Rob Thummel, managing director for Tortoise Capital Advisors, told the WSJ. “With oil below $50, producers in general are indicating that if we stay here at this price, we’re going to have to reassess capital and not spend as much, so production won’t be as high.”

Oil prices extend losses as investors await OPEC news -  Oil prices fell for a second straight session in volatile trade Tuesday as investor sought details from an OPEC meeting to discuss a deal to further cap crude oil production. The cautious mood overshadowed reports that Saudi Arabia is planning to scale back exports to Asia next month. On the New York Mercantile Exchange, West Texas Intermediate futures slid 22 cents, or 0.5% to settle at $49.17 a barrel. Brent crude, the global benchmark, reversed gains to finish 0.4% lower at $52.14 a barrel. Saudi Arabia, the world’s largest crude oil producer, is expected to cut sales of oil supplies to Asia by up to 10% in September to tackle the global crude glut, according to multiple reports Tuesday. The Saudis “continue to do their best to support the market by cutting exports,” said Ole Hansen, head of commodity strategy at Saxo Bank. But investors remained skeptical over how effectively the Organization of the Petroleum Exporting Countries can enforce compliance, said Lukman Otunuga, a research analyst at FXTM, in a note. Saudi Arabia first announced late last month plans to limit oil exports to 6.6 million barrels a day in August. That declaration came as the OPEC — of which Saudi Arabia is the most important member — has struggled to reduce an oversupply of oil in the global market that has weighed on prices for three years. “The kingdom’s oil minister made it clear a few months ago that the OPEC heavyweight will do ‘whatever it takes’ to bring global stock levels lower,” experts at oil broker PVM Group said. “Words are now being followed by actions.”

Saudi Arabia to cut crude allocations in Sept by at least 520,000 bpd --  State oil company Saudi Aramco will cut crude oil allocations to its customers worldwide in September by at least 520,000 barrels per day (bpd), an industry source familiar with the matter told Reuters on Tuesday. The cuts in allocations are in line with Saudi Arabia's commitments with the OPEC-led supply reduction pact, under which the top oil exporter is required to cut 486,000 bpd. Saudi Arabia will cut supplies to most buyers in Asia by up to 10 percent in September, multiple sources with knowledge of the matter have said."The Saudi decision to take an ax to its Asian crude allocations shows it means business (and) gives credence to its pledge to do 'whatever it takes' to normalize bulging global oil inventories," PVM oil analyst, Stephen Brennock, told CNBC on Tuesday. Brennock argued Asian buyers would soon be forced to become increasingly reliant on producers in the Atlantic Basin in order to meet their crude oil requirements. He also suggested that Russia would most likely gain further market share from Saudi Arabia as a result of the Middle Eastern country's self-imposed cut to crude oil allocations. "(While) it helps to lift sentiment in the short term, there's no guarantee of long-term price support as other oil exporters including Russia, the U.S. and Iran rush to fill the shortfall," Brennock said.

WTI Algos Confused On Crude Draw And Surprise Gasoline Inventory Build - WTI had coiled up today, closing lower, ahead of tonight's API data. After last week's API build and small DOE draw, hope was high that the trend of larger draws would continue and it did with API reporting a larger than expected crude draw (-7.839mm vs -2.2mm exp). However, a susprise build in gasoline inventories took the shine off and the machines could not decide whether to buy or sell. API:

  • Crude -7.839mm (-2.2mm exp)
  • Cushing +319k
  • Gasoline +1.529mm (-1.5mm exp)
  • Distillates -157k

Last week's much smaller than expected draws across the board was followed by an algo-confusing big draw in crude and surpriose build in gasoline this wekl... WTI tumbled at the NYMEX close, testing stops below $49 but hovered there into the API print...then kneejerked higher but then gasoline saw a surprise build and the gains disappeared... “There just isn’t enough confidence in OPEC yet to get us above $50. That’s the big problem," James Williams, economist at WTRG Economics in London, Arkansas, says.  "We’re in the last big month of the driving season and the question is, can OPEC balance the lower fall and winter demand?"

Another Huge Draw: US Commercial Crude Oil Inventories Decreased By 6.5 Million Bbls -- -- From the EIA's weekly petroleum report:U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 6.5 million barrels from the previous week. At 475.4 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 3.4 million barrels last week, and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 1.7 million barrels last week but are in the upper half of the average range for this time of year. Propane/propylene inventories remained unchanged last week and are in the lower half of the average range. Total commercial petroleum inventories decreased by 4.6 million barrels last week. My calculations (parameters previously described) suggest that at the average rate of decline over the past 15 weeks, it will take 35 weeks to "re-balance":

WTI/RBOB Sink After Biggest Gasoline Build In 7 Months, Production Hits New Cycle High -- Last night's mixed bag from API has been dominated by 'war premium' in oil prices as WTI bounced off $49 ahead of the DOE report which confirmed that gasoline inventories surprisingly built (+3.42mm vs -1.5mm exp) - the biggest build since January - and Crude inventories drew (though less than API). Crude production in the Lower 48 rose to 9.048mm b/d - a new cycle high. DOE:

  • Crude -6.45mm (-2.2mm exp)
  • Cushing +569k
  • Gasoline +3.42mm (-1.5mm exp)
  • Distillates -1.73mm (-500k exp)

The surprise build in gasoline inventories reported by API (and large draw in crude) were confirmed by DOE but the gasoline build was dramatic... Total stockpiles of crude and product inventory continue to trend down to the lowest levels since Jan 2016...but still remains extreme...

Oil market marches on toward backwardation: Kemp (Reuters) - Oil traders are increasingly convinced the market will rebalance over the next year with a major drawdown in crude and products stocks. Conviction about market rebalancing is showing in a big rise in the calendar spreads for West Texas Intermediate (WTI) and especially Brent crude in the last two months (http://tmsnrt.rs/2fviNVk).Calendar spreads, which measure price differences between any pair of contracts with different delivery dates, are closely tied to changes in the supply-demand balance.Calendar spreads are conventionally expressed as the price of a near-dated futures contract (such as October 2017) minus the price for a contract maturing later (such as March 2018).When the oil market is oversupplied, and crude stocks are high and rising, calendar spreads tend to be negative, a state known as contango (near-dated contracts trade at a discount).When the market is undersupplied, and stocks are low and falling, calendar spreads tend to be positive, a state known as backwardation (near-dated contracts trade at a premium). (Full Story) As the oil market has cycled between periods of undersupply and oversupply, the calendar spreads have cycled between backwardation and contango (http://tmsnrt.rs/2hNC4SN).Brent spreads slumped into contango in the second half of 2014 as the oil market became oversupplied, and have stayed there for the last three years as the market struggled to digest excess stocks.But as the market transitions from oversupply in 2014/15 towards a period of undersupply in 2017/18, spreads have tightened.The contango in WTI and Brent futures has been narrowing progressively since early 2016, which is consistent with a market starting to draw down stocks as a result of lower supply and faster demand growth.In the later stages of rebalancing, spreads are likely to move into backwardation to increase supply, moderate demand and stabilise inventories.Something like this appears to be happening with an unusually large seasonal reduction in crude stocks in the United States. Saudi Arabia has pledged to reduce its exports in August and September, and is curbing shipments to the United States, to accelerate the rebalancing.

OPEC Oil Output Jumps To Highest In 2017 As Production Cut Compliance Slides -- A surge in Libyan oil production in July sent total OPEC output higher by 172.6kbpd last month to 32.87mmbpd, the highest monthly production this year, as Saudi production also hit a 2017 high of 10.067mmbpd, up 31.8kbpd on the month the latest OPEC monthly market report revealed. Nigeria - which like Libya is exempt from the supply cuts agreed upon in last year's Vienna meeting - saw another month of rising crude production, with its total supply rising by 34.3kbpd to 1.748mmbpd. Meanwhile, oil production declined in Angola and Venezuela, while Iraq’s production fell by 33.1k b/d to 4.468m b/d, still above its agreed upon reduction target.   Surprisingly, while secondary sources estimated Saudi production at just under 10.1mmbpd, in the OPEC table listing production based on direct communication, the Saudi output number was missing for reasons unknown. To offset the growing historical output, OPEC raised its forecasts for how much oil it will need to supply in 2017 and 2018 by ~200kbpd each, amid stronger-than-expected fuel consumption and weaker outlook for rival production.  The oil cartel also lowered its estimate for rival supply by 50k b/d in 2017, 90k b/d in 2018, although it remains to be seen if shale has any intention of complying with this optimistic - for OPEC - prediction. Preliminary data indicates that global oil supply increased by 0.17 mb/d m-o-m to average 97.30 mb/d in July 2017, compared with the previous month. The increase of non-OPEC supply (including OPEC NGLs) by 0.52 mb/d to average 64.49 mb/d was mainly driven by Canada, Norway, US, OPEC NGLs, Ghana, Colombia, Brunei, Africa other and Congo, which partially offset m-o-m declines in the UK, China, Mexico and Azerbaijan. OPEC crude oil production also increased by 0.17 mb/d in July, leading to an increase in global oil output. The share of OPEC crude oil in total global production slightly decreased by 0.1 pp to total 33.8% in July compared with 33.9% in June.

Another Red Flag For Oil? China’s Crude Imports Slump To 7-Month Low -- Chinese crude oil imports in July dropped to their lowest level in seven months, although they rose 12 percent on an annual basis, according to calculations made by Reuters on the basis of China’s customs data.Last month China imported some 34.66 million tons of crude oil, or around 8.16 million bpd, which—according to Reuters calculations based on China’s General Administration of Customs data—was the lowest level since January.Crude oil imports in the first seven months of this year increased by 13.6 percent at 247 million tons.In the first half of the year, Chinese crude oil imports averaged 8.55 million bpd, or 212 million tons in total – a 13.8-percent annual increase.The total trade data for July had analysts worried that China’s economy may have started to show signs of slowdown. Both exports and imports increased less than expected, making analysts wonder if global demand growth has started to slow down, or if China’s July trade figures should be attributed solely to one-off or seasonal factors.In total imports, China’s imports increased by 11 percent last month, missing forecasts for a 16.6-percent rise, and slowing down from June’s 17.2-percent jump, to the slowest growth since December last year.Last month, a senior manager at Sinopec said that lower domestic production and continued low oil prices will lead to China’s demand for c rude oil imports rising by around 400,000 bpd in 2017. Chinese crude oil imports are expected to exceed 400 million tons this year, and to further rise next year, Zhang Haichao, vice president of Sinopec Group, told Reuters. The estimate provided by Zhang means that Chinese demand for foreign crude would rise by 400,000 bpd, and for the first time ever, rising imports could make China the world’s top crude oil importer on an annual basis, according to Reuters.

Are Oil Bulls About To Be Burned Again? - Oil investors have grown more optimistic as of late, as oil prices have moved back to $50 per barrel. The market appears to be on sounder footing, suggesting that things will gradually tighten for the rest of the year. But it is unclear how far oil prices can really move above today’s position. Hedge funds and other money managers have begun buying up long positions on oil futures, a sign of growing bullishness. Reuters analyst John Kemp argues that the positioning of hedge funds has entered the third bullish phase of 2017, after two previous cycles ran their course earlier this year. In fact, the most recent data saw the largest weekly increase in net-long positions so far this year, and interestingly, Kemp points out that the net-long build is due to new long positions, rather than simply just a reduction of shorts. In other words, investors are betting that crude oil prices will rise.And for good reason. U.S. shale production growth has slowed, as has the rig count.Inventories have finally posted significant declines, which appear to be ongoing. Some high-profile shale drillers have announced spending cuts. And Saudi Arabia is moving to cut oil exports to Asia, a sign that OPEC’s most powerful member intends to do its best to accelerate market tightening. Plus, although OPEC compliance has slipped in the past two months, the cartel met this week to figure out a way to hold the laggards to their word. Nothing particularly concrete came from the meeting, but the group seems determined not to let things fall apart. "Discussions were conducted in a constructive atmosphere and proved fruitful," OPEC said in a statement. "The conclusions reached with the countries at the meeting will help facilitate full conformity.” Few details were provided.  But can things continue on this upward trend? “The biggest question now is, was that July rally just a lot of short covering, or does it have staying power?”  “The market’s just content to go sideways and figure that out.”

Oil prices fall 2%, but natural-gas futures rally to a 3-week high - Oil futures pulled back on Thursday, marking the lowest finish in more than two weeks, with U.S. prices failing to hold above $50 a barrel as a report from OPEC showed that crude production among the group’s members rose in July. Natural-gas futures, meanwhile, finished at a three-week high after U.S. government data revealed a smaller-than-expected weekly climb in domestic supplies of the fuel. September West Texas Intermediate crude shed 97 cents, or 2%, to settle at $48.59 a barrel on the New York Mercantile Exchange. The settlement was the lowest since July 25, according to FactSet data. October Brent crude declined by 80 cents, or 1.5%, to $51.90 a barrel. The $50 level “remains a huge psychological barrier for U.S. oil,” “As crude stocks continue to draw down each week, it’s easy at first to justify a bullish trading path,” he said. “But as we start to hit price levels that we know are capable of boosting production, the market makes a quick turn from greed back to fear.”   Prices for WTI climbed to as high as $50.22 before it retreated Thursday. They rose 0.8% Wednesday after data showed a sharp 6.5 million-barrel decline in last week’s U.S. oil inventories. “Yes, the inventory data was favorable [for prices], but the [WTI] oil price failed to break the resistance of $50, which was a clear confirmation that traders are not convinced that demand is strong enough to satisfy the supply,” . In a monthly report Thursday, the Organization of the Petroleum Exporting Countries lifted its forecast for global oil demand growth this year by 100,000 barrels a day, saying it now expects growth of 1.37 million barrels a day in 2017. The cartel also said, however, that production from the group rose further in July, driven by higher production in Libya, Nigeria and Saudi Arabia.

Oil prices drop as IEA sees slow market rebalancing (Reuters) - Oil prices fell on Friday after the International Energy Agency said weak OPEC compliance with production cuts was prolonging a rebalancing of the market despite strong demand growth. Brent crude, the global benchmark, was at $51.83 a barrel at 1220 GMT, down 7 cents, having earlier fallen 50 cents or around 1 percent to its lowest since Aug. 1. U.S. West Texas Intermediate crude was down 10 cents at $48.49 per barrel, having earlier dropped 1 percent to its lowest since July 26. Oil touched 2-1/2-month highs on Thursday but closed down around 1.5 percent, with U.S. prices slipping back below $50 amid oversupply concerns. "There would be more confidence that rebalancing is here to stay if some producers party to the output agreements were not, just as they are gaining the upper hand, showing signs of weakening their resolve," the IEA said in its monthly report. The IEA said OPEC's compliance with the cuts in July had fallen to 75 percent, the lowest since those curbs began in January. It cited weak compliance by Algeria, Iraq and the United Arab Emirates. In addition, OPEC member Libya, which is exempt from the cuts, steeply increased output. "Crude oil prices failed to hold recent gains, with a nervous market starting to doubt recent falls in inventories," ANZ bank said in a note. "Supply-side issues also weighed on prices."

OilPrice Intelligence Report: Have Oil Markets Reached A Tipping Point?: Oil prices were down at the end of the week on fears of lingering oversupply. The U.S. reported a strong drawdown in crude inventories and flat production, although those bullish figures were outweighed slightly by an uptick in gasoline inventories. Investors chose to focus on rising OPEC supply, which led to a selloff in crude on Thursday and Friday. In its latest monthly report, the IEA revised up its forecast for oil demand this year to 1.5 mb/d, up 100,000 bpd from last month. Oil demand growth continues into next year, expanding at an annual rate of 1.4 mb/d. The IEA also said that the rebalancing effort is continuing – the OPEC cuts, combined with demand growth, will erase the supply glut. Still, the agency said that the process is a stubborn one, and the growing signs of tightness in the market are being offset somewhat by the faltering compliance from OPEC. The IEA revised oil demand data from the past few years. The revisions are important because they mean that the “call on OPEC” will be 400,000 bpd lower this year and in 2018, and the revisions also mean that global oil demand is actually 330,000 bpd less for the period between 2015-2018 than previously thought.  Last week, Pioneer Natural Resources reported a worrying increase in the gas-to-oil ratio from some of its Permian wells, a development that has alarmed investors. Pioneer’s stock price plunged on the news, and the sheen on U.S. shale is suddenly looking a little tarnished. Goldman Sachs backed up this sentiment when it wrote in a report that it has fielded calls from investors looking to “reallocate capital” out of shale E&Ps and into other parts of the energy industry. Some analysts think there isn’t much to see here, but judging by the recent stock declines from some top Permian players, the market has suddenly grown worried about the Permian.  In a new report, OPEC boosted its oil demand estimate for the rest of this year and next. The group said that the global market would demand 200,000 bpd more than expected from the cartel this year, as consumption appears stronger than anticipated. At the same time, however, rising Libyan production has pushed the group’s output in July to its highest point so far this year. Libya added more than 150,000 bpd in July, pushing output above 1 mb/d. Saudi Arabia, surprisingly, also added 30,000 bpd, although some of that is surely to meet peak summer demand.

US Crude Production At Cycle Highs As Rig Count Stabilizes; Desperate Saudis Jawbone Deeper Cuts To Come --A tough week for crude oil, which tumbled after algos tagged $50 stops yesterday following the biggest gasoline inventory build in 7 months. While the US oil rig count has stopped rising in the last few weeks, production continues to hit cycle highs stalling prices, but the Saudis are not giving up on their incessant jawboning - hinting that "deeper cuts" are still on the table. US oil rig counts rose by 3 to 768 last week - it has fallen 3 times in the last 7 weeks and is practically unchanged in the last 2 months... Just as we predicted, the lagged response to the shifting oil price has been a stalling of the rising rig count... But even with the US oil rig count declining for 3 of the last 7 weeks, crude production in the Lower 48 rose once again to 9.048mm b/d - the highest since July 2015...WTI prices had a disappointing week - not helped by the biggest gasoline inventory build since January... Once WTI algos tagged $50, it was a one-way street lower…

Oil Rig Count Rises Despite Ballooning Shale Debt - The number of active oil and gas rigs in the United States fell this week by 5 rigs, but the amount of oil rigs increased as drillers in the United States continue to add rigs in defiance of low oil prices, albeit at a slower rate. Combined, the total oil and gas rig count in the US now stands at 949 rigs, up 468 rigs from the year prior, with oil rigs in the United States increasing by 3 and gas rigs declining by 8.  Oil rigs in the United States now number 768—372 rigs above this time last year.  Canada, which lost 3 oil and gas rigs last week, gained three this week—all three oil—for a total of 220 oil and gas rigs—94 above the year ago levels. Prices fell on Thursday and Friday as the weak stock market and word of OPEC’s faltering compliance battered the unstable oil market. Despite Friday’s jawboning from Saudi Arabia on the prospects of OPEC either extending or deepening its production cuts that it agreed to last November—and despite the International Energy Administration’s projections of increased crude oil demand growth for 2018, prices were unable to rally. Barrel prices for WTI is more than $1 lower on the week, and .51% down on the day, trading at $48.34 at 12:06pm EST. Brent was trading down 0.5% at $51.64—down from $52.39 the week prior. The rise in the number of active rigs in the US has slowed in recent weeks, but US crude oil production is not, with average production averaging 9.42 million barrels per day for the week ending August 04, according to the Energy Information Administration (EIA), who now expects US production to reach an average of 9.9 million barrels per day in 2018.The Permian basin lost two rigs this week, and Arkoma Woodford and Eagle Ford also saw declines to the rig count. Despite this week’s loss, the Permian basin still has 188 rigs more than last year. Cana Woodford’s count increased by 3 rigs this week. At 14 minutes after the hour, WTI was trading at $48.47 with Brent crude trading at $51.75.

Baker Hughes: Gas rigs push down overall US rig count by 5 - The overall US drilling rig count declined during the week ended Aug. 11 for the fourth time in the past 7 weeks, and gas-directed rigs led the losses for a second straight week.Baker Hughes’ overall tally of active US drilling rigs decreased 5 units to 949, down up just 8 units over the past 7 weeks (OGJ Online, Aug. 4, 2017). Since a low point in Baker Hughes data touched during the weeks ended May 20-27, 2016, the overall count is up 545 units.Gas-directed rigs dived 8 units to 181 in their biggest drop since early 2016. Since May 19, the gas count has increased by only 1 unit. It’s up 100 units since its recent low in Baker Hughes data, last touched during the week ended Aug. 26, 2016.Oil-directed rigs waffled upward this week with a 3-unit increase to 768, up just 10 units over the past 7 weeks and up 452 units since their recent low in Baker Hughes data on May 27, 2016.Six onshore rigs stopped work, with rigs drilling horizontally down 6 to 801, down 3 units over the past month but up 487 units since May 20-27, 2016. The US offshore count, which dived 7 units last week, added a unit this week to total 18.According to preliminary estimates by the US Energy Information Administration, US crude oil production declined 7,000 b/d during the week ended Aug. 4 to 9.42 million b/d, up 978,000 b/d from a year ago.  Alaska dragged down overall output with a 22,000-b/d drop, which was partially offset by a 15,000-b/d rise from the Lower 48. In its Short-Term Energy Outlook released this week, EIA forecasts that monthly crude production gains from the Lower 48 will slow in the second half to 60,000 b/d, almost half of first-half monthly growth (OGJ Online, Aug. 8, 2017). The agency attributes the forecast to slowing rig count growth as well as operators reducing capital budgets for the year due to ongoing oil market volatility.Texas fell 7 units this week to 459, up only 1 unit since May 19 and up 286 units since May 20-27, 2016.The Eagle Ford, whose count surged to begin the year, fell to its lowest point in 4 months, losing 3 units to 75. The Permian dropped 2 units to 377, up just 9 units over the past 2 months and up 243 units since May 13, 2016.Despite 1 rig starting work off its coast, Louisiana’s overall count edged down a unit to 66.New Mexico and California each rose 1 unit to 61 and 14, respectively. The Cana Woodford gained 3 units to 63, up 39 units since June 24, 2016. The Arkoma Woodford, meanwhile, lost 2 units to 8. Oklahoma’s overall count was flat at 132.

 OPEC says call on its crude oil to stay stable in 2018 despite record high demand -- Despite a forecast of global oil consumption reaching a record high next year, OPEC expects demand for its crude to stay stable at 32.42 million b/d in 2018, the producer group's statistical arm said Thursday. The latest monthly market report revised down its non-OPEC supply growth forecast for both this year and next, even as it produced a 2017 high of 32.87 million b/d in July. In 2018, it expects non-OPEC oil supply to grow by 1.1 million b/d over the current year to average 58.87 million b/d, "which is slightly less than the expected increase in global demand in 2018." OPEC said world oil demand in 2018 will grow 1.28 million b/d from 2017 levels, meaning that total oil consumption is expected to hit a new record high of 97.8 million b/d in 2018. But despite record-high demand seen next year, OPEC's analysis arm projected global demand for its crude to be lower than its July production. In 2018, demand for OPEC crude is forecast at 32.42 million b/d, the same level as in 2017. OPEC revised down its non-OPEC growth forecast for 2017 following weak output in the US and Canada in Q2, 2017 due to lower production in the Gulf of Mexico "following seasonal maintenance and predominantly lower-than-expected tight crude produced in shale regions." The forecast for non-OPEC supply in 2017 was revised down by 28,000 b/d from the previous month's report to show an annual growth of 780,000 b/d to 57.77 million b/d. However, it still expects non-OPEC supply show a mild growth of 150,000 b/d in H2 2017 compared to the first half of this year.

 Saudi Arabia to cut crude allocations in Sept by at least 520,000 bpd –source - - State oil company Saudi Aramco will cut crude oil allocations to its customers worldwide in September by at least 520,000 barrels per day, an industry source familiar with the matter told Reuters on Tuesday.  The cuts in allocations are in line with Saudi Arabia's commitments with the OPEC-led supply reduction pact, under which the top oil exporter is required to cut 486,000 bpd.  Saudi Arabia will cut supplies to most buyers in Asia by up to 10 percent in September, multiple sources with knowledge of the matter have said.

Saudi Arabia Is Trying to Remake the Middle East In Its Image - No country has done more to spread radical Islam than Saudi Arabia. For the better part of four decades, the oil rich nation has—through public and private institutions—funded a multiplicity of organizations dedicated to spreading the most radical and reductionist interpretations of Islam.   In short, the weaponization of Islam is a core part of Saudi foreign policy. It is the primary means by which the country projects power and secures influence in countries across the Middle East and the broader Muslim world. So far, with U.S. complicity, the strategy has enjoyed great success. Saudi Arabia, and to a lesser degree other Gulf nations, are engaged in a kind of cultural terraforming. Centuries of diverse and divergent religious traditions within Islam—in countries like Yemen, Somalia, Egypt, Syria, and Iraq—have been swept away by an influx of Saudi-educated clerics and Saudi-produced religious materials. These Saudi-influenced imams and religious literature teach the radical brand of Islam that predominates in Saudi Arabia: Wahhabism.In 1744, Muhammad ibn Saud made a Faustian bargain with Muhammad Abd al-Wahhab: al-Wahhab would back al-Saud in his battle for supremacy if he pledged allegiance to al-Wahhab’s puritanical vision of Islam. This interpretation of Islam, which differs little from the militant Salafi beliefs that inform the Islamic State’s and al-Qaeda’s understanding of Islam (the Islamic State uses Saudi produced textbooks in its schools), became known as Wahhabism.  The Saudis, who are not descended from the Prophet and have no particular claim to rule even in their territorial heartland of Najd, relied on the clerics of the al-Wahhab family for religious legitimacy. The bargain struck in 1744 held fast. In 1926, Ibn Saud took over the Hejaz and in 1932 the country of Saudi Arabia was created. Ibn Saud’s conquest of most of the Arabian Peninsula would not have happened without the support of the fanatical warriors (the Ikhwan) who, more than anything else, fought to purge the peninsula of what they deemed to be heretical beliefs and practices. 

Two months into Saudi-led boycott, tiny Qatar goes on the offensive — The tiny nation of Qatar is defiantly weathering a boycott by four of its neighbors in a deepening crisis that has roiled the region and threatened U.S. interests.Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severd ties and imposed an economic blockade on Qatar in early June, accusing it of backing terrorism. Qatar has denied the allegations and has since gone on the offensive.Two months into the isolation campaign, the energy-rich Persian Gulf nation has used its billions to strengthen its economy and security. It has announced reforms and bolstered ties with Turkey and Iran that could potentially reshape the region and its alliances for years.Efforts by the United States to mediate between its close allies have not succeeded. Instead, the crisis is acrimoniously playing out in diplomatic and legal venues. “It’s now personal, which in some ways makes it more difficult to find a way for both sides to step down,” said Perry Cammack, a Middle East analyst at the Carnegie Endowment for International Peace. “This is likely to fester for some time.”

The China Wildcard in the Qatar Crisis - In the ongoing crisis pitting the Gulf Cooperation Council (GCC) and its allies against Qatar, China’s position has been relatively clear: remain neutral and encourage the two sides to work out their differences before they do any real damage to Persian Gulf stability – or worse, to Beijing’s interests. Qatar, however, clearly has other ideas. The Gulf state has responded to its neighbors’ demands by coming out swinging. After lodging complaints with the World Trade Organization (WTO) and International Civil Aviation Organization, Qatar has now agreed to a $6 billion purchase of warships from Italy. China’s official engagement in the crisis has remained low-key: the Foreign Ministry’s stance remains that the dispute and its resolution are internal matters for the GCC. Nonetheless, rumors of secret meetings between Qatari and Emirati diplomats in Beijing have raised the prospect of China acting as a decisive mediator in the crisis. While officially remaining “above the fray”, Foreign Minister Wang Yi has indeed been active on the sidelines of regional security forums and bilateral visits, advising his Emirati, Qatari, and Iranian counterparts to discuss an end to intra-GCC disunity. Of course, considering China’s longstanding neutrality towards what it sees as other countries’ “internal matters”, neither Wang nor Chinese president Xi Jinping can be expected to insert themselves into negotiations over a multilateral resolution to the crisis. Not yet, at least. The Gulf is Beijing’s largest supplier of oil and second-largest provider of natural gas, while also accounting for 46 percent of China’s exports to the Middle East. With such high economic stakes, it goes without saying that a long-term deadlock is not a productive outcome for China. Whether or not the Middle Kingdom decides to get more involved may now hinge largely on Qatar’s next moves. The quartet of Arab states – Saudi Arabia, Egypt, Bahrain and the United Arab Emirates (UAE) – blaming Qatar for its support for Islamist groups and regional machinations have moderated and refocused their initial demands; there is now increasing pressure on the Qataris to make concessions in return. With shifting power dynamics and large-scale investment projects on the table, both Doha and the GCC are anxious to see whom Beijing will side with in the ongoing dispute.

‘This is not Aleppo’: Shock at extent of destruction of Saudi Shia town -- Fears are growing of an escalation of the Saudi offensive on Awamiya, as shocking images from local activists and satellite photos reveal the extent of destruction in the Shia town in a months-long siege that has killed at least 12 people. Satellite imagery reveals whole districts of the city, particularly the historic Almosara district, reduced to rubble, as Saudi soldiers clash with Shia militants in the narrow streets. According to an activist with sources in the wider province of Qatif, workers on farms in al-Ramis, to the northeast of Awamiya, received voice messages last week asking them to take their animals out of the area. There have also been requisition notices attached to houses in the district of al-Shweikah, about 6km south of Almosara, issued by the Alibrahim private property development company, which is also responsible for the renovation of Almosara. Ameen Nemer, a former resident of the town, told Middle East Eye he feared the Saudi government was preparing to widen its offensive on the Shia-majority region, saying "they don't want a living thing in Awamiya". Tensions have flared up in the city over reported plans to demolish and renovate Almosara, which the government also claims is being used by armed gunmen, and at least a dozen people are so far thought to have been killed in the violence. On Monday, the pro-government al-Sharq al-Awsat news site reported that two men from a list of 23 "terrorists" issued by the Saudi interior ministry, had turned themselves in. The two men, identified as Ramzi M al-Jammal and Ali H al-Zaid, reportedly voluntarily reported themselves to the authorities. The site said that of the 23 listed, eight had already turned themselves in, while most of the rest had been killed. Three remained at large. Local residents told Reuters that three policemen and nine civilians had been killed in the clashes. Though the death toll is hard to verify, this would appear to indicate that as many as 24 people have been killed.  Awamiya has long been a flashpoint for protests by Saudi's Shia minority - the influential cleric Nimr al-Nimr, who was executed by the Saudi government in 2016, came from the town.Confirming precise details about the situation in Qatif has long been difficult due to tight controls over media scrutiny imposed by the Saudi authorities. Reuters reported earlier this year that foreign media could visit the area only if they accompanied by government officials, purportedly for safety reasons. Local activists accuse security forces of driving residents out of Awamiya by firing randomly towards homes and cars as they confront armed men in the area, charges Saudi Arabia denies.

Chronic diseases spike in Middle East as conflicts rage - Nature - Across the Middle East, deaths resulting from violence grew by 850% between 1990 and 2015, according to a series of reports published on 3 August in the International Journal of Public Health1–15. The increase accelerated after 2010, corresponding with the beginning of the Arab Spring movement and wars in Syria and Iraq. At the same time, the authors found, the incidence of many chronic diseases has also risen dramatically; the death rate from diabetes, for instance, grew 216% over the study period. Taken together, the analyses describe a disturbing deterioration in health across a broadly defined Middle Eastern region, which includes 22 countries — including Afghanistan, Iraq, Syria, Somalia and the United Arab Emirates — that are home to more than 580 million people. “Generations of people are being exposed to a lot of shocks that will impact health throughout their lives,” says Ali Mokdad, an epidemiologist at the University of Washington’s Institute for Health Metrics and Evaluation (IHME) in Seattle, and a co-author of many of the new analyses1. “There is a strong link between mental health and diabetes and cardiovascular disease,” he adds. “If someone faces a shock in their life, it puts pressure on their mental health, and they’ll be less likely to stop smoking if they smoke. They’ll be less likely to seek medical care if it’s dangerous to do so. They’ll be less likely to eat a balanced diet.”

Saudi Arabia still sees no role for Assad in Syrian transition  (Reuters) - Saudi Arabia, a main backer of Syrian rebels, said on Sunday it still supported an international agreement on the future of Syria and President Bashar al-Assad should have no role in any transition to bring the war there to an end. The Saudi Foreign Ministry denied media reports that Saudi Arabia was considering a political transition with a first phase in which Assad will stay in power. Several media, including the state-owned Russia Today, said Saudi Foreign Minister Adel al-Jubeir had informed the Syrian opposition's High Negotiations Committee (HNC) about the decision. A ministry statement, carried by the Saudi state news agency SPA, called the reports attributed to al-Jubeir "inaccurate". "The position of the kingdom on the Syrian crisis is firm, and it is based on the Geneva 1 communique and on U.N. Security Council resolution 2254 that stipulated the formation of a transitional body that will run the country," it said. The agreement also called for drafting a new constitution and holding a new election with no role for Assad in the whole transitional process. Saudi Arabia supports the HNC and its efforts to widen its membership and unify the Syrian opposition, the statement said.The announcement came ahead of the next round of United Nations-led Syria peace talks expected in September. Assad's negotiators have not met directly with the opposition because there is no unified delegation as the HNC and two other groups, known as the Cairo and Moscow platforms, all claim to represent the opposition. 

UN Syria investigator quits over lack of 'political will' -  A member of the U.N. Commission of Inquiry on Syria said on Sunday she was quitting because a lack of political backing from the U.N. Security Council had made the job impossible, Swiss national news agency SDA reported. Carla del Ponte, 70, who prosecuted war crimes in Rwanda and former Yugoslavia, told a panel discussion on the sidelines of the Locarno Film Festival that she had already prepared her letter of resignation. "I am quitting this commission, which is not backed by any political will," she said, adding that her role was just an "alibi". "I have no power as long as the Security Council does nothing," she said. "We are powerless, there is no justice for Syria." Del Ponte, a former Swiss attorney general, joined the three-member Syria inquiry in September 2012, chronicling incidents such as chemical weapons attacks, a genocide against Iraq's Yazidi population, siege tactics, and the bombing of aid convoys. She could not immediately be reached for comment and the United Nations did not immediately confirm her plans to quit. Her departure will leave only two commissioners, Brazilian human rights expert Paulo Sérgio Pinheiro, and Karen Koning AbuZayd from the United States. The commission was set up in August 2011 and has regularly reported on human rights violations, but its pleas to observe international law have largely fallen on deaf ears.Although the United Nations is setting up a new body to prepare prosecutions, there is no sign of any court being established to try war crimes committed in the six-and-a-half year-old war, nor of any intention by the U.N. Security Council to refer the situation to the International Criminal Court in the Hague. 

Making Sense of Turkey’s Syria Strategy: A “Turkish Tragedy” In the Making -- Following Turkish foreign policy has never been more exciting and terrifying. With its ever-increasing footprint in Syria, Turkey is now a full-fledged party to the civil war. The risks associated with the Turkish presence are multi-faceted. Incursions into Syria can trigger not only a direct war between Turkey and whatever is left of the Assad regime, but an indirect one with Iran and possibly Russia.  The more likely scenario involves Turkey in open conflict (not only occasional shelling and air strikes) with the People’s Protection Units (YPG, sometimes referred to as PYD, its political arm)), the Syrian Kurdish militant group with organic ties to Turkey’s arch-nemesis the Kurdish Workers Party (PKK). Such a contingency would not only complicate the already convoluted Syrian conflict, but also spread the Syrian civil war to Turkey, and even Iraq, where the PKK established a strong presence in the strategic Sinjar province. In addition, if Turkey ends up in open conflict with the YPG in Syria, the United States, with its direct support for YPG in its fight against the self-proclaimed Islamic State (ISIL), will find itself stuck between a rock and a hard place. In the best-case scenario, already fragile relations between Turkey and the-United States will deteriorate to a point where Turkey’s NATO membership will be questioned either by Ankara or Washington (most likely both). In the worst-case scenario, the Syrian civil war will witness U.S. and Turkish forces, intentionally or unintentionally, targeting each other’s military assets, including personnel, with casualties mounting on each side.

What is behind Israel’s attempt to ban Al Jazeera? - The present attempt by the government of Israel to close down Al Jazeera's offices in Jerusalem reflects a potentially far-reaching shift in the perceived power and role of critical media, not just in the Israeli occupation of Palestine, but across the Arab world and larger Middle East and North Africa.  The move is particularly odd since Al Jazeera and Israel have long had a symbiotic, if often adversarial, relationship. Despite long-standing and often harsh criticism of the Israeli occupation and its policies, Israel has afforded the channel relatively wide latitude in its coverage. There have been repeated grumblings over the years, and threats to close down its bureaus, but it hasn't prevented coverage and commentary by Al Jazeera's staff and contributing writers.  Al Jazeera's offices - like other media organisations - have been located for years in the same complex as the Government Press Office. Showing up for press credentials from the network has never caused any more trouble than I've experienced when I requested credentials for US news organisations, for example. In fact, it often felt like the relationship with Al Jazeera was a source of pride for Israeli media and press officials, one that reflected the unique set of circumstances that served each side well.   For Israel, Al Jazeera, particularly the original Arab network, provided the government unprecedented opportunities to speak to Arab citizens across the region, beginning in the 1990s - at the height of the Olso peace process. The fact that Al Jazeera allowed Israeli officials and, through its reports, ordinary citizens to speak unfiltered was an unprecedented opening for Israel to the outside world, an opening worth what it perceived as negative coverage.  On the other hand, Al Jazeera's access to Israeli officials and commentators gave the network a chance to expand on the usual narrow set of viewpoints presented in other Arab networks and to challenge - on the air - the official Israeli narrative.  So why, after allowing Al Jazeera to operate during some of the most intense violence of the occupation (including the sieges of Nablus and Jenin and the various and increasingly deadly attacks on Gaza), would the Israeli government suddenly feel it's so important to terminate Al Jazeera's presence in Jerusalem? 

China says North Korean missile threat reaching ‘crisis point’ - China’s foreign minister warned his North Korean counterpart that the situation on the Korean Peninsula was close to “crisis point”, a day after the UN unanimously voted for its strongest economic sanctions yet against Pyongyang. Hours later, the South Korean president requested a phone call with US President Donald Trump on Sunday night, in which the White House said both leaders affirmed that North Korea posed “a grave and growing direct threat to the United States, South Korea, and Japan”. The White House said Mr Trump and Mr Moon welcomed the new UN resolution and “committed to fully implement all relevant resolutions and to urge the international community to do so as well”. The UN vote, which gained approval from both China and Russia and aimed at depriving North Korea of $1bn in revenues, marked a victory for a US-led effort to form an international coalition to halt the country’s nuclear programme. At a meeting on Sunday in the Philippine capital Manila, China’s Wang Yi told Ri Yong-ho of North Korea that the measures were “necessary, but not the end-goal”, and that the aim was to bring the nuclear aspirant back to the table for talks. 

Want China to press North Korea harder? Put Japan into the mix - Chinese strongman Xi Jinping has a terrible weakness - and his name is Kim Jong Un. This is supposed to be the Chinese President's big moment. Not since Deng Xiaoping's day has a mainland leader controlled, well, everything - foreign affairs, the economy, the military, censorship policy, you name it. United States President Donald Trump's erratic White House and his scrapping of trade and climate-change deals, meanwhile, makes Mr Xi's team look like the adults in the room. Except for that Kim fellow, whose antics in Pyongyang have strongman Xi looking befuddled and downright cowed. Mr Xi had better get his mojo back, and soon, to curb the North Korean leader's provocations the way only he can. Increasingly, Beijing's global standing depends on it. The US President is turning up the pressure on Mr Xi to get tough on his client-state. Mr Trump is inching towards blunt force, too, be it military action on the Korean peninsula or a trade war with China. But greater success might come from pulling Japan into the mix to throw Mr Xi off balance and prod him to use Beijing's considerable leverage over Mr Kim. Japanese Prime Minister Shinzo Abe could do just that by urging the US to install a web of Terminal High Altitude Area Defence (Thaad) systems around his geopolitically vital nation. Mr Abe also could host America's Aegis Ashore weapons-interception system, which his defence team recently visited Guam to investigate. China reacted angrily when South Korea welcomed Thaad onto the peninsula, banning tour groups, turning away K-pop bands and shuttering Lotte stores. Imagine the shockwaves through Beijing's halls of power if Japan followed suit - and the changes to Mr Xi's North Korean calculus. 

United Nations bans key North Korea exports over missile tests (Reuters) - The United Nations Security Council unanimously imposed new sanctions on North Korea on Saturday that could slash by a third the Asian state's $3 billion annual export revenue over its two intercontinental ballistic missile tests in July. The U.S.-drafted resolution bans North Korean exports of coal, iron, iron ore, lead, lead ore and seafood. It also prohibits countries from increasing the current numbers of North Korean laborers working abroad, bans new joint ventures with North Korea and any new investment in current joint ventures. "We should not fool ourselves into thinking we have solved the problem. Not even close. The North Korean threat has not left us, it is rapidly growing more dangerous," U.S. Ambassador to the United Nations Nikki Haley told the council. "Further action is required. The United States is taking and will continue to take prudent defensive measures to protect ourselves and our allies," she said. Washington would continue annual joint military exercises with South Korea, Haley said. North Korea has accused the United States and South Korea of escalating tensions by conducting military drills. China and Russia slammed U.S. deployment of the THAAD anti-missile defense system in South Korea. China's U.N. Ambassador Liu Jieyi called for a halt to the deployment and for any equipment in place to be dismantled. Liu also urged North Korea to "cease taking actions that might further escalate tensions." U.S. President Donald Trump hailed the vote in a Twitter message on Saturday evening. "The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!" Trump wrote. 

China prepared to pay the price of North Korea sanctions – foreign minister - CHINA’s Foreign Minister Wang Yi said on Monday the country will pay the greatest price of sanctions on North Korea due to its economic ties with the pariah state, but will abide by the United Nations resolution in the interest of world peace.During the Asean Regional Forum in Manila, Wang said sanctions highlighted the international community’s opposition to the North’s nuclear weapons programme and continued missile tests.“Owing to China’s traditional economic ties with North Korea, it will mainly be China paying the price for implementing the resolution,” a statement from the Foreign Ministry cited Wang as saying.“But in order to protect the international non-proliferation system and regional peace and stability, China will as before fully and strictly properly implement the entire contents of the relevant resolution.”China has repeatedly said it was committed to enforcing increasingly tough UN resolutions on North Korea, though it has also said what it terms “normal” trade and ordinary North Koreans should not be affected.The latest UN resolution bans North Korean exports of coal, iron, iron ore, lead, lead ore and seafood. They are likely to slash the country’s US$3 billion annual export revenue by a third. It also prohibits countries from increasing the numbers of North Korean labourers currently working abroad, bans new joint ventures with North Korea and any new investment in current joint ventures.

Welcome boost from China to global pressure on North Korea - (AP) — A global pressure campaign on North Korea propelled by sharp new U.N. sanctions received a welcome boost Sunday from China, the North's economic lifeline, as Beijing called on its neighbor to halt its missile and nuclear tests. The Trump administration cautiously embraced China's apparent newfound cooperation, while putting it on notice that the U.S. would be watching closely to ensure it didn't ease up on North Korea if and when the world's attention is diverted elsewhere. But there were no signs the U.S. would acquiesce to China's call for a quick return to negotiations. The diplomatic wrangling sought to build on the sweeping new North Korea sanctions passed by the U.N. Security Council a day earlier — the strongest in a generation, the U.S. said. As diplomats gathered in the Philippines for an annual regional meeting, President Donald Trump was cheering the move. He cited the "very big financial impact" of the sanctions and noted optimistically that both China and Russia had joined in the unanimous vote. On Sunday, following a late-night conversation with South Korean President Moon Jae-in, Trump tweeted: "Just completed call with President Moon of South Korea. Very happy and impressed with 15-0 United Nations vote on North Korea sanctions." In characteristically understated fashion, U.S. Secretary of State Rex Tillerson said of the U.N. action, "It was a good outcome." For the U.S., it was a long-awaited sign of progress for Trump's strategy of trying to enlist Beijing's help to squeeze North Korea diplomatically and economically. Chinese Foreign Minister Wang Yi, meeting with North Korea's top diplomat during the gathering in Manila, urged the North to "maintain calm" despite the U.N. vote.

North Korea May Be In Possession Of A Miniature Nuclear Warhead, Japan Warns --One day after Kim Jong Un's regime balked at this weekend's UN sanctions, promising retaliation and threatening to attack the US with a nuclear weapon, Japan's government has released a new 500-page report in which it warns that the threat from North Korean nuclear weapons has reached a “new stage” and that Pyongyang’s weapons program had “advanced considerably,” to the point where it was possible that the regime had acquired the ability to miniaturize nuclear warheads. The white paper, approved by Japan’s cabinet on Tuesday morning, was published less than two weeks after North Korea test-fired its second ICBM, which US experts have said may be able to reach most of the continental United States. According to the Guardian, "Japan’s defence ministry said that security threats had reached a new stage after the North conducted two nuclear tests and more than 20 ballistic missile launches last year." The report went on to speculate that North Korea had improved its technological expertise to the point where it could theoretically marry a nuclear warhead with a missile.“It is conceivable that North Korea’s nuclear weapons programme has already considerably advanced and it is possible that North Korea has already achieved the miniaturisation of nuclear bombs into warheads and has acquired nuclear warheads,” the ministry said.“North Korea’s development of ballistic missiles and its nuclear programme are becoming increasingly real and imminent problems for the Asia-Pacific region including Japan, as well as the rest of the world,” said the report.

Japan Deploys Patriot Missiles To Shoot Down North Korean Rockets -- Following North Korea's threat on Wednesday to fire ballistic missiles over Japan toward Guam, it was only a matter of time before Japan - which overnight said it has the authority to shoot down any such projectile above its territory - took appropriate steps, and according to the Nikkei, the Japanese government is starting to deploy Patriot missile interceptors in its western regions ahead of a North Korean launch.  The move comes after the North Korean military said it is developing a plan to fire intermediate-range missiles into waters 30km to 40km off the coast of Guam, and elaboratedthat the rockets would fly over parts of Japan and Patriot batteries would likely be positioned in those parts of Japan mentioned by North Korea. The KCNA report mentioned Shimane, Hiroshima and Kochi prefectures in the western regions of Chugoku and Shikoku. Shimane is the closest to North Korea, lying on the Sea of Japan. Kochi would represent the last big land area before the missiles reach the Pacific Ocean. The Hwasong-12 rockets to be launched by the KPA will cross the sky above Shimane, Hiroshima and Koichi Prefectures of Japan. They will fly 3356.7 km for 1065 seconds and hit the waters 30 to 40 km away from Guam. According to Nikkei, "Japan will consider exercising the right to collective self-defense by shooting them down."

Any Korean war could quickly escalate (Reuters) - Any new military conflict with North Korea would likely escalate quickly to the use of nuclear weapons, bringing catastrophic casualties not seen since World War Two and an untold economic impact worldwide, former U.S. defense officials and experts say. While the United States has maintained an uneasy calm with North Korea for more than six decades and spikes in tensions are not new, recent supercharged rhetoric between the unpredictable U.S. President Donald Trump and North Korean leader Kim Jong Un have heightened the risk of miscalculation that could make that nightmare a reality, they say. On Thursday, North Korea upped the ante by saying it would complete plans by mid-August to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam, after Trump said that any threats by Pyongyang would be "met with fire and fury like the world has never seen." The exchange followed a United Nations resolution tightening sanctions on North Korea after it tested two intercontinental ballistic missiles designed to carry nuclear warheads to the United States. Trump said on Thursday his fire and fury comment was not tough enough. Despite the war of words, for now the U.S. military says there has been no change in its readiness posture in South Korea or elsewhere in Asia. Analysts say they have seen no evidence of any increased alert in North Korea. But they warned the bluster could raise the risk of miscalculation that could result in conflict far beyond the scale of the 1950-53 Korean War, which claimed the lives of more than 50,000 Americans and millions of Koreans and ended in an armed truce, not a peace treaty.

China's Reserves Continue To Decline As Capital Outflows Accelerate, "Outbound Travel Spending" Surges --The confusion over the direction of Chinese capital flows continues to grow. On one hand, overnight the PBOC reported that China’s foreign-exchange reserves "posted a sixth straight monthly increase" as the yuan strengthened and economic growth remained robust, Bloomberg reported. Specifically, Beijing said that China's foreign currency stockpile rose $23.9 billion to $3.081 trillion in July, higher than the $3.075 trillion estimate. The narrative was ready to go: as Bloomberg stated, "solid economic data and the presence of curbs on moving money abroad have helped restore confidence in the currency and ease outflow pressure. The foundation for steadier cross-border capital flows has become more solid, the State Administration of Foreign Exchange said last month." Economist responses were quick to praise this ongoing shift in the recent outflow regime: "Capital outflows have eased markedly since the start of the year and are now mostly offset by the trade surplus," said Julian Evans-Pritchard, a China economist at Capital Economics Ltd. in Singapore. "This shift should prove supportive of the renminbi, which we think will strengthen against the U.S. dollar during the next couple of years."  "Depreciation expectations in the market have definitely abated, and outflow pressure has eased," said Zhu Qibing, chief macro-economy analyst at BOC International China Ltd. in Beijing. He expects reserves to hover around the current level for the rest of the year. On the other hand, there was just one problem with the above assessments of China's inflows: they are all completely incorrect.

Yuan Spikes After China Export Growth Tumbles To 5-Month Lows --Just as we warned, the EM exuberance has faded and China's torrid trade growth has suddenly slowed dramatically. Offshore Yuan is spiking after both China Imports and Exports dramatically missed expectations.China customs administration announces data in yuan terms in statement:

  • July exports climbed 11.2% y/y; median est. 14.8% rise y/y (range +12.1% to +16.5%, 10 economists).
  • July imports climbed 14.7% y/y; median est. 22.6% rise (range +16.0% to +26.9%, 10 economists)
  • July trade surplus 321.2b yuan; median est. 293.6b yuan surplus (range 250b-348.3b yuan surplus, 10 economists)

Export growth is now the slowest since February (lower than the lowest estimate) and Import growth is now the weakest since Dec 2016 (lower than the lowest estimate)... Of course, as Bloomberg reports, the world’s largest exporter is confronting more uncertainty, as U.S. President Trump continues sporadic tough talk on China. The White House may be considering an investigation into alleged intellectual property violations, which could risk igniting broader trade conflict. Citic Securities Co. said in a researchreport that rising U.S. protectionism coupled with anti-globalization sentiment in Europe will take its toll on China’s exports.

China Is Canceling the Debt of the World’s Most Impoverished Nations -- Since the 1990s, a major part of Chinese foreign policy has been to invest in developing countries around the world.This includes private investments, like the billion-dollar solar project being spearheaded by a Chinese energy company in Ghana or the multibillion-dollar canal being built by a Chinese infrastructure firm in Nicaragua.It also includes public investment projects like the Asian Infrastructure Investment Bank, which was launched earlier this year to help fund infrastructure projects in impoverished Asian countries (and to reduce the amount of influence wielded by the U.S.-led investment banks).On Saturday, Chinese President Xi Jinping made yet another commitment to help economic growth in the developing world, announcing that China would be canceling the debts of the world’s least developed countries.  President Xi made the announcement while addressing a United Nations summit on global development goals. During his speech, he also pledged to establish a $2 billion fund dedicated to improving conditions in the most impoverished countries around the world

India Builds Highway to Thailand to Counter China’s Silk Road - When Prime Minister Narendra Modi’s government approved $256 million to upgrade a section of a remote border road last month, few took notice. Yet India’s decision to revive plans for the trilateral highway, part of an ambitious 1,360-kilometer (845 mile) crossing to link northeastern India with markets in Thailand and beyond, marks the next phase in the jostle between New Delhi and Beijing for economic and strategic influence in the region. In the last two years alone, India has assigned more than $4.7 billion in contracts for the development of its border roads, according to government figures, including the highway which will run from Moreh in Manipur through Tamu in Myanmar to Mae-Sot in Thailand.The construction has taken on new urgency as China pushes ahead with its own vast ‘One Belt, One Road’ infrastructure initiative, expected to involve investments worth more than half a trillion dollars across 62 nations. The intercontinental web of road, rail and trade links has raised concerns among strategic rivals India, Russia, the U.S. and Japan. Among the biggest showcases of the plan -- an economic corridor that runs through the Pakistan-administered part of disputed Kashmir, which both India and Pakistan claim -- has unsettled equations in the South Asian neighborhood, where border tensions often simmer. “With China’s growing interest in the region, as its wealth grows, its influence is growing beyond its borders,’’   So while China is pushing for a north-south economic corridor under the ‘One Belt, One Road’ initiative, India is aiming to build links with its eastern neighbors, he said.

Indonesia Will Barter Coffee, Tea And Palm Oil For Russian Fighter Jets -- On Monday Russia warned that it would be aggressively reducing its dependence on the US Dollar and US-based payment systems, and shortly after it confirmed just that when Indonesia announced that it will barter coffee, palm oil, tea and various other commodities in exchange for 11 Russian-made Su-35 fighter jets, calling U.S. and European sanctions against Russia "an opportunity to boost the Southeast Asian nation's trade." The Indonesian Ministry of Trade said that a memorandum of understanding for the barter was signed Aug. 4 in Moscow between Russia's Rostec and PT. Perusahaan Perdagangan Indonesia, both state-owned companies. “This barter under the supervision of both governments hopefully will soon be realized through the exchange of 11 Sukhoi Su-35s and a number of Indonesian exports, starting from coffee and tea to palm oil and strategic defense products,” Indonesian Trade Minister Enggartiasto Lukita said on Monday, as quoted by Reuters.The trade minister also said that in exchange for the Su-35 jets, Indonesia would provide coffee, tea, palm oil and defense equipment. No value for the barter was announced according to Bloomberg, which added that Indonesia already operates 16 Sukhoi jets, making its first purchase in 2003 while the country was subject to a U.S. embargo on arms sales due to the military's human rights abuses. In what may be the first of many such barter deals, Russian state-run corporation Rostec signed a memorandum of understanding for the deal with Indonesian state trading company PT Perusahaan Perdagangan Indonesia. Rostec says it is committed to implement the terms of a counter trade program. At the same time, the Russian corporation reserves the option to choose which goods it receives in trade from Indonesia as well as the right to pick trade partners and producers for cooperation under the agreement, according to Rostec.

Mercosur suspends Venezuela, urges immediate transition -- South American trade bloc Mercosur suspended Venezuela indefinitely on Saturday, adding to international pressure on President Nicolas Maduro to dismantle a newly created legislative superbody and restore democracy. Foreign ministers of Argentina, Paraguay, Uruguay and Brazil announced the decision in Sao Paulo, urging Maduro to release prisoners and immediately start a political transition. "We are saying: Stop with this! Enough with the deaths, enough with the repression. It is not possible to inflict such torture to the people,"Brazilian Foreign Minister Aloysio Ferreira said after the meeting.Mercosur made its move just as Venezuela's chief prosecutor was fired on Saturday, and ordered to stand trial. That occurred less than 24 hours after the new legislature was installed with sweeping powers to strengthen Maduro's grip on power. The prosecutor, Luisa Ortega, had become Maduro's main challenger from within the ruling socialist movement since the opposition started a round of protests in April. The street marches have left more than 120 people dead as rock-throwing protesters were met by rubber bullets, water cannon and tear gas.  She accused him of human rights abuses and of exaggerating the turnout in last weekend's election of the new 545-member constituent assembly. The opposition, in control of the country's traditional congress, boycotted the vote. This guaranteed that all candidates for the new body would be Maduro allies.

U.N. decries excessive force in Venezuela’s crackdown on protests (Reuters) - The United Nations slammed Venezuela on Tuesday for the use of excessive force against anti-government protesters and said security forces and pro-government groups were believed responsible for the deaths of at least 73 demonstrators since April. Abuses of protesters, including torture, were part of "the breakdown of the rule of law" in the South American OPEC member country," U.N. High Commissioner for Human Rights Zeid Ra'ad al-Hussein said in a statement.  "The responsibility for the human rights violations we are recording lies at the highest levels of the Government," he said. There was no immediate reaction from Venezuela's leftist government to the scathing criticism from the U.N., which said preliminary findings from an investigation conducted in June and July "paint a picture of widespread and systematic use of excessive force and arbitrary detentions against demonstrators in Venezuela." But the government has increasingly turned a blind eye to critics overseas as it steps up a crackdown on street protests against President Nicolas Maduro and seeks to consolidate his leftist rule.

Ships fooled in GPS spoofing attack suggest Russian cyberweapon - Reports of satellite navigation problems in the Black Sea suggest that Russia may be testing a new system for spoofing GPS, New Scientist has learned. This could be the first hint of a new form of electronic warfare available to everyone from rogue nation states to petty criminals. On 22 June, the US Maritime Administration filed a seemingly bland incident report. The master of a ship off the Russian port of Novorossiysk had discovered his GPS put him in the wrong spot – more than 32 kilometres inland, at Gelendzhik Airport. After checking the navigation equipment was working properly, the captain contacted other nearby ships. Their AIS traces – signals from the automatic identification system used to track vessels – placed them all at the same airport. At least 20 ships were affected. While the incident is not yet confirmed, experts think this is the first documented use of GPS misdirection – a spoofing attack that has long been warned of but never been seen in the wild.  Until now, the biggest worry for GPS has been it can be jammed by masking the GPS satellite signal with noise. While this can cause chaos, it is also easy to detect. GPS receivers sound an alarm when they lose the signal due to jamming. Spoofing is more insidious: a false signal from a ground station simply confuses a satellite receiver. “Jamming just causes the receiver to die, spoofing causes the receiver to lie,” says consultant David Last, former president of the UK’s Royal Institute of Navigation.

Poland May Demand Billions In Reparations From Germany For World War II --As deep cracks have emerged in the formerly pristine diplomatic relations between Poland and the EU over the past few months, some burried ghosts from Europe's past are making an unexpected come back.Eight years after the fall of the Nazi regime, Poland decided to forego further reparations from Germany. But now there are renewed calls for those reparations to be paid. More than 72 years after the end of the Second World War, Polish politicians are demanding that Germany pay their country reparations. A research office of Poland’s lower house of parliament, the Sejm, is reviewing whether this would be possible according to TheLocal.The analysis should be complete by August 11th, Sejm representative Arkadiusz Mularczyk of the l eading Law and Justice party (PiS) told news agency PAP last week. The review comes after comments made by the powerful head of the PiS, Jaroslaw Kaczynski, who last week accused Germany of "rejecting" its Second World War responsibilities, going as far as to suggest Berlin should pay reparations.

Car Rams Into Group Of Soldiers In Paris; Six Injured In "Deliberate Act Of Terrorism" -- In the latest car-ramming terrorist attack in France, at least six French soldiers were injured, three of them seriously, after being rammed by what was described as a black BMW in a Paris suburb, French Armed forces confirmed, adding that the police were searching for the driver in what prosecutors are treating as the latest act of terrorism. Patrick Balkany, the local mayor for the suburb of Levallois-Perret, said on French television that it was “without a doubt a deliberate act.” Quoted by the WSJ, he said the vehicle involved was a black BMW. The driver waited in an alley near the local city hall before driving his car into the men as they walked out of a building toward their vehicle around 8 a.m. local time, Mr. Balkany added. He also said that the incident took place not far from the town hall.“I find this shameful,” Balkany said, calling the incident an “intolerable aggression.”Minister for the Armed Forces Florence Parly condemned the incident as a “cowardly act,”saying that the investigation is yet to determine the motives of the attacker.  The counter-terrorism unit of the Paris prosecutor’s office has launched an investigation into the incident, AFP reports, citing the prosecutor’s office.

 ECB stretches bond-buying rules with oversized Italian purchases - (Reuters) - The European Central Bank bought far more Italian bonds than it was supposed to in July to make up for dwindling opportunities in smaller countries such as Portugal, ECB data showed on Monday. The data illustrated the ECB is quietly prepared to stretch its rules, including politically sensitive national quotas for bond purchases, if needed to carry out its bond-buying scheme, aimed at supporting inflation in the euro zone. The so-called capital key rule in theory limits the proportion of a euro zone country's bonds that the ECB can buy. It was imposed as a way of persuading critics, particularly in Germany, to accept the bond-buy programme whwn it was launched in 2015. While it was never formally dropped, the ECB has said it would be applied flexibly. It has been buying more French, Italian and German debt to make up for small purchases in Portugal, Slovakia and Baltic countries, while Greece and Cyprus have been exlcuded from the programme altogether. It is a hotly debated issue as the ECB prepares to decide whether to extend the 2.3 trillion euros ($2.71 trillion)programme into 2018, with analysts speculating it would have to wind it down, ease the rules or face running out of bonds to buy. The ECB and Bank of Italy together bought 9.6 billion euros worth of Italian bonds last month, or nearly one and a half billion euros more than the composition of the 60-billion euros monthly purchase would dictate. This was the biggest deviation from Italy's quota relative to the size of the overall monthly amount.

Britain willing to accept a £36bn Brexit divorce bill - Britain is willing to offer a £36 billion ‘divorce bill’ payment to the EU to break the deadlock in negotiations, but only in return for the union agreeing to finalise a deal on the exact nature of the post-split deal for the UK, including the status of trade deals. The Sunday Telegraph reports that “separate sources in Whitehall and government with knowledge of the UK’s negotiating strategy confirmed the figure, dismissing previous reports that Theresa May would agree to a £50bn bill as ‘too high’.” The move comes after a series of second-round talks in July ended with British negotiators believing that the EU had deliberately set the bar impossibly high, demanding that any discussion about trade deals could only come after issues such as citizens’ rights and Northern Ireland’s future border status with the Republic were resolved. British government sources told the newspaper that they believed the EU’s opening position on a settlement deal would be €60bn – considerably less than the €100bn which some had thought would be asked for. The proposed deal would see Britain continuing to make annual net payments to the union of €10bn for the three years following Brexit in 2019. “The 27 say they can’t knock off the bits of their ‘bill’ until the very end - but politically we can’t move on money until the 27 member states start to show compromise. As a negotiation process, it just doesn’t work,” a senior Whitehall source told the newspaper. “We know their position is €60bn, but actual bottom line is €50. Ours is closer to €30bn, but the landing zone is €40bn, even if the public and politicians are not all there yet,” the senior Whitehall source added. 

Oettinger says UK payments will have to continue to 2020 despite Brexit - The United Kingdom will have to keep making payments for long-term programmes to the European Union until at least 2020, even after it leaves the bloc in 2019, EU Budget Commission Guenther Oettinger told Germany’s Bild newspaper in an interview printed on Monday, 7 August.The UK has pledged funds to EU’s long-term programs and those obligations would continue even after the country’s scheduled departure from the bloc in 2019.“As a result, London will have to transfer funds to Brussels at least until 2020,” Oettinger told the newspaper.Oettinger said he expected Germany to face extra costs in the single-digit billion-euro range as a result of Britain’s departure from the EU.Britain’s departure would leave an annual hole of around 10 billion to 12 billion euros in EU coffers, Oettinger said.He said the gap could be offset by budget cuts and higher payments by members, but the EU could also save money by eliminating discounts that it had negotiated over the years with member countries, including Britain.“That would result in a significant administrative simplification and it would end the horsetrading that has accompanied budget negotiations up to now,” he said. The EU Commission in June outlined five scenarios to deal with the added costs resulting from Britain’s departure, noting that the EU could tap sources like corporate taxes, a tax on financial transactions, or levies on electricity, motor fuel, carbon emissions.

U.K. Fights Rearguard Action on EU Financial Laws Before Brexit - The U.K. may be headed for the door, but its lawmakers and civil servants in Brussels still have their work cut out as the European Union overhauls financial-services rules that will affect firms in London even after Brexit. Negotiations will resume soon on wide-ranging banking legislation that translates global standards into EU law, as well as a swathe of new rules on everything from pensions to covered bonds and derivatives clearing. All this matters to the U.K. because it has to enact any laws passed before Brexit and will be expected to have equivalent rules in place after it leaves as part of any deal giving London-based firms continued access to the single market.“Many British politicians have claimed that our rules should be deemed equivalent to the EU’s because they will have been identical to those of other EU countries before we leave,” said Anneliese Dodds, a Labour lawmaker in the British Parliament who was previously a member of the EU legislature. “I don’t think it would be sensible for Britain to threaten that perception -- and reality -- by trying to wriggle out of new prescriptions on the grounds that we are about to leave.” Yet with so much on the line, the U.K. has a diminished capacity to bend Brussels to its will. Where once a Briton, Jonathan Hill, was in charge of EU financial-services policy, that job now belongs to a Latvian. Sharon Bowles once led the key European Parliament committee for banking and market rules; now an Italian holds the chair. Jonathan Faull, long one of the most influential figures in the European Commission, has retired.

Welsh and Scottish governments demand UK-wide Brexit meeting - BBC News: Welsh and Scottish ministers have demanded the UK government reconvene a Brexit-liaison group which has not met for six months. The joint ministerial committee (JMC) to seek a UK-wide approach to leaving the European Union was meant to meet monthly. The Welsh Government said it was "unacceptable" it had not met since February. The UK government said its engagement on Brexit had been "unprecedented". Plaid Cymru MP Jonathan Edwards called the lack of meetings "unforgiveable", adding there was a risk that Wales' needs would be "ignored and forgotten once again by the British government". Set up by the UK government the new group, a sub-committee of the JMC that focused on the Brexit negotiations was intended to allow ministers from Wales, Scotland and Northern Ireland to set out their priorities for leaving the EU. The plan - under an agreement with Prime Minister Theresa May last October - was to ensure "outcomes for all four governments are secured" in the negotiations. The cross-nations group met four times between November and February, but it has not met since March's meeting was postponed because of elections in Northern Ireland.  A House of Commons research paper said until a government for Northern Ireland is agreed, discussions on Brexit are likely to be held directly between the UK government and the Scottish and Welsh governments individually. UK Brexit minister Robin Walker said it was anticipated there would be "regular and sustained bilateral discussions with officials from the devolved administrations, reporting back to ministers at regular intervals to ensure sufficient progress is being made".

The Brexit betrayal bandwagon is growing -- It may not be this week. It may not be Boris Johnson. But eventually a minister will break with this tottering government and establish himself (or herself, for it could be Andrea Leadsom) as the leader of the diehard right. Brexit is crying out for its Ludendorff; the scoundrel who can blame his failures on everyone but himself. The smart move for today’s right wing politicians who find their careers blocked is to break with the Tory leadership – whatever or whoever that may consist of – and resort to old  slogans.The referendum delivered a mandate to leave, Johnson, or whoever takes up the challenge of building a new nationalist right, could say. The failure of Brexit to deliver the bright confident morning the Brexiteers promised the British is not the fault of the leave campaigners. For how could it be? How could so many politicians, influence peddlers and journalists be wrong? No. The ‘elite’ has stabbed the people in the back.I believe we are on the brink of seeing all the old warnings about the dangers of referendums being vindicated. Clement Attlee dismissed plebiscites as a device for dictators and demagogues precisely because they allowed complicated issues to be simplified to a binary choice. All referendums do that. Last year’s Brexit vote represented the reduction to absurdity in its clearest form, however. Vote Leave dissolved as soon as the contest was won. The referendum thus dispensed with the most basic democratic requirements. The winners were not accountable for the promises they made. In their history of the campaign, Jason Farrell and Paul Goldsmith quote the Leave campaigner Gisela Stuart saying that she thought the referendum was an ‘abuse of democracy’ because no one who campaigned to leave was accountable for what happened next.

More Brexit Confusion: UK Judges Can Use New ECJ Precedents Post Brexit - One of the big justifications for Brexit was for the UK to take back its national sovereignity and get out from under the supposedly oppressive thumb of the European Court of Justice.  Reader vlade sent us a not-very-clear BBC story that still manages (despite a headline obscuring the issue) to highlight yet another way Brexit appears unlikely to live up to its billing. The Great Repeal gives judges the option of using European court rulings as precedent post Brexit. I am not making that up. From the BBC, based on an interview with the UK’s Supreme Court president, Lord Neuberger:When the UK leaves the EU, the ECJ will continue to develop law on everything from consumer rights to discrimination – from things like compensation for airline passengers to transgender rights.The government’s Repeal Bill states that UK courts do not have to pay any heed to decisions of the ECJ after the UK has left the EU – but any court “may do so if it considers it appropriate”.Bear in mind that the UK accepts the proposition that pre-Brexit ECJ decisions will retain their status as precedents post Brexit:The EU’s position document that deals with governance issues around the withdrawal agreement says all Court of Justice rulings would be enforceable in the UK.The government has said its repeal Bill – also known as the European Union (Withdrawal) Bill – will ensure that historic judgements of the ECJ will be given the same binding or precedent status in our courts as decisions of our own Supreme Court.These judgments extend some rights in areas including the calculation of holiday pay for UK workers. The Supreme Court rarely departs from one of its own decisions and so historic rulings of the ECJ will be binding upon it in almost all situations.  But letting UK judges opt to look to new ECJ rulings post Brexit tis politically problematic, to put it politely. The article points out earlier on that: Prime Minister Theresa May has insisted the ECJ should have no jurisdiction over the UK after Britain leaves the EU.

UK drifts closer to a Norway-style Brexit transition— There is a black hole at the center of the Brexit negotiations — hard-liners can kick and scream, but it’s sucking everyone into its gravitational pull. Its name is transition, and its shape is Norway.The U.K. rejoining the European Economic Area from outside the European Union — the so-called Norway model — is European Commission chief negotiator Michel Barnier’s favorite option for a post-Brexit transitional arrangement. It would allow for a smooth exit with minimum disruption for British business — by maintaining access to the single market — and give negotiators precious time to work out the details of a future trading arrangement. In Brussels, it is now seen as the only serious proposal that the European Commission is likely to make when it comes to a transitional deal. Five EU diplomats told POLITCO it would be a reasonable solution to the Brexit transition conundrum.Two senior U.K. government figures, speaking on condition of anonymity, acknowledged the EU’s stance on this and in recent weeks a succession of British cabinet ministers have come out in favor of a transition period of up to three years after Brexit.While none are yet explicitly talking about the EEA model, even Brexiteers like Trade Secretary Liam Fox and Environment Secretary Michael Gove now sing from the same hymn sheet as Brexit doves like Chancellor Philip Hammond, Business Secretary Greg Clark and Home Secretary Amber Rudd — all emphasizing the importance of avoiding a “cliff edge” Brexit for British business.On the EU side, there is a clear position that no agreement on a transition — EEA or otherwise — can be settled until separation issues, like the Brexit bill, are settled. The opposition Labour Party too, appears to be gravitating toward that position. Its leader Jeremy Corbyn had said that leaving the EU also means leaving the single market (which would preclude EEA membership). But Labour’s shadow Brexit secretary, Keir Starmer, told the Guardian on August 1 that the party would try to force a vote on keeping the country in the single market. Inexorably, under pressure from British business, political opponents and sheer realpolitik, they are all being pushed toward an EEA transition.