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

Saturday, July 22, 2017

week ending Jul 22

(preview)

Gerald Epstein: If Yellen is Out, What’s Next for the Fed? - naked capitalism by Jerri-lynn Scofield - This Real New Network interview with Gerald Epstein, codirector of the Political Economy Research Institute (PERI) and Professor of Economics at the University of Masschusetts-Amherst speculates on what will follow for the Federal Reserve if, as expected, Trump fails to reappoint current chair Janet Yellen when her term expires next February. Epstein suggests that her successor will likely to be someone who would be expected to support financial deregulation– although he served up no possible names. One name that’s being widely and consistently floated is that of Gary Cohn, current head of Trump’s National Economic Council and former chief operating officer and president of Goldman Sachs, as most recently reported in this Politico piece from last week, Sources: Cohn is Trump’s top candidate to replace Yellen at Fed. This short interview is by no means a comprehensive or perfect assessment of Yellen’s tenure as Fed chair. Nonetheless, it offers a quick precis of some key issues and I serve it up as a prod to spark discussion among the commentariat– many of whom hold nuanced and deeply considered views about the Fed’s recent performance, and what should follow, as well as what’s likely to follow.

 Here’s Why Yellen’s Fed Cares About America’s Opioid Epidemic   - The drug epidemic has caught the Fed’s attention. Yellen discussed it at length during Senate testimony last week and regional Fed banks say companies in their areas cite it as a hiring impediment. The opioid epidemic falls outside of the Fed’s traditional macroeconomic purview, yet it matters to the central bank for two reasons. If addiction is rendering people unemployable, it could help to explain why a historically low portion of the prime-age population is working. Second, the Fed has increased its focus on community and workforce development in recent years -- and the opioid crisis is a painful reality dragging on human capital across America. An estimated 2.7 million adults over the age of 26 were misusing painkillers as of 2015, while another 236,000 currently used heroin, based on test Substance Abuse and Mental Health Administration data. While opioid abusers account for a tiny sliver in a workforce of 160 million, they probably make up a greater share of the 7 million who are unemployed. “Our district is the epicenter of this crisis,” said Kyle Fee, regional community development advisor at the Cleveland Fed, which hosted a policy conference in June that included a panel specifically dedicated to opioids. “It was a good way for us to dip our toe into this topic,” he said. Most economic research on the effects of the opioid crisis comes from academia, rather than Fed researchers, and it shows a two-way relationship between the drugs and the U.S. economy. Poor labor market opportunities for America’s working and middle class seem to have helped fuel opioid addiction. In turn, pill and heroin use can worsen employment chances for addicts, and can lead to criminal records that dim applicants’ prospects for years to come. “I do think it is related to declining labor force participation among prime-age workers,” Yellen told Senators last week, when asked about the crisis. “I don’t know if it’s causal or if it’s a symptom of long-running economic maladies that have affected these communities and particularly affected workers who have seen their job opportunities decline.”

The Fed Is About To Get Trumpier -- Yellen’s four-year term as chair expires early next year, and while President Trump hasn’t ruled out reappointing her, he isn’t expected to do so.  Politico reported this week that the leading candidate to replace Yellen is Gary Cohn, the former Goldman Sachs executive who now serves as Trump’s top economic adviser.In the context of Trump’s White House, Cohn is generally considered something of a moderating influence. Cohn has reportedly pushed back against imposing tariffs or adopting other anti-trade policies advocated by other Trump advisers such as Steve Bannon. (He has also hired a staff full of policy experts, something other senior officials haven’t yet managed to do.) But by the reserved standards of the Fed, Cohn would represent a sharp departure in both style and experience. Yellen, like most of her predecessors, is trained as an economist and is steeped in the traditions of academic discourse and peer review. Cohn is a former Wall Street trader and rose through the famously cutthroat ranks of Goldman Sachs. It isn’t hard to imagine Cohn’s brash style proving an awkward fit at the more collegial Fed. It is less clear what Cohn, or any other Trump pick for Fed chair, might mean for economic policy. Historically, Democrats have tended to want the Fed to keep interest rates low (encouraging more employment and faster wage growth), while Republicans have wanted higher rates to keep inflation in check. But Trump has previously expressed a preference for low rates, which might help explain his interest in an unconventional pick for Fed chair — most conservative economists would probably want to push rates higher. Meanwhile Yellen, who was appointed by President Barack Obama, has frustrated liberals by pushing ahead with rate increases despite low levels of inflation. Trump, in other words, could end up making the Fed more interesting and also, perhaps ironically, more liberal.

 Trump Fed chief candidates say ambitious growth targets can be met -  It looks like the starting gun has been sounded on the race to become the next chair of the Federal Reserve, with three leading candidates co-authoring an article that says the Trump administration’s economic ambitions are achievable. John Cogan, Glenn Hubbard, John Taylor and Kevin Warsh combined on a paper for the conservative Hoover Institution “on the prospects for higher economic growth.” Hubbard — dean of Columbia University’s business school and Mitt Romney’s former chief economic adviser; Taylor — the Stanford University professor who was a former undersecretary at the Treasury Department; and Warsh — a former governor at the Fed — are all considering possible candidates to lead the Fed. Gary Cohn, the director of the National Economic Council, is both leading the Fed search and a top contender to replace the current chief, Janet Yellen, according to published reports. Yellen’s term expires in February. In the Hoover paper, the authors say the nation’s economic policies are the primary cause of both the productivity slowdown and what they call “the poorly performing labor market.” High taxes — particularly on businesses — costly regulations, debt-financed government spending and “the lack of a clear monetary strategy” have weighed on both business investment as well the supply and demand for labor.The authors say the Trump administration’s tax reform plans would raise both productivity and employment. “These needed reforms would help turn the recent upswing in animal spirits into a significant improvement in economic activity by resetting long-term higher economic growth expectations,” the authors say. Regulatory reform would also boost net returns to investment as well as reduce barriers to employment, they say. Slowing entitlement spending to the rate of inflation plus population growth would free up resources for more private-sector investments, they added. Doing all that could lead to an economy capable of 3% annual GDP growth, compared with the 1.8% the Congressional Budget Office forecasts, they added. 

Ron Paul Warns "Cashless Society" Is About "Authoritarians Clinging To Power" -- The global dollar-based monetary system is in serious jeopardy, according to former Texas Congressman Ron Paul. And contrary to Fed Chairwoman Janet Yellen’s assurances that there won’t be another major crisis in our lifetime, the next economy-cratering fiat-currency crash could happen as soon as next month, Paul said during an interview with Josh Sigurdson of World Alternative media. Paul and Sigurdson also discussed false flag attacks, the dawn of a cashless society and the dangers of monetizing national debt.Paul started by saying Yellen's attitude scares him because "central bankers are always wrong - especially before a bust.There is a subjective element to when people lose confidence, and when is the day going to come when people realize we’re dealing with money that has no intrinsic value to it, we’re dealing with too much debt, too much bad investment and it will come to an end. Something that’s too good to believe usually is and it usually ends. One thing’s for sure, we’re getting closer every day and the crash might come this year, but it might come in a year or two.”“The real test is can it sustain unbelievable deficit financing and the accumulation of debt and it can’t. You can’t run a world like this, if that were the case Americans could just sit back and say “hey, everybody wants our money and will take our money.” It’s a sign that the authoritarians are clinging to power so they can collect the revenues collect the taxes and make sure you’re not getting around the system. That’s what the cashless society is all about. But it won’t work in fact it might be the precipitating factor that people will eventually lose confidence when the crisis hits. They say the crisis hasn’t come - welI in 2008 and 2009 we had a pretty major crisis and what we learned there is that the middle class got wiped out and the poor people got poorer and now there’s a lot of wealth going on but it’s still accumulating to the wealthy individual.”

 Money Supply Growth Falls Again, Dropping to 105-Month Low -- Growth in the supply of US dollars fell again in May, this time to a 105-month low of 5.4 percent. The last time the money supply grew at a smaller rate was during September 2008 — at a rate of 5.2 percent.  The money-supply metric used here — an "Austrian money supply" measure — is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure than M2. .The "Austrian" measure of the money supply differs from M2 in that it includes treasury deposits at the Fed (and excludes short time deposits, traveler's checks, and retail money funds). M2 growth also slowed in May, falling to 5.6 percent, a 20-month low.  Money supply growth can often be a helpful measure of economic activity. During periods of economic boom, money supply tends to grow quickly as banks make more loans. Recessions, on the other hand, tend to be preceded by periods of falling money-supply growth.  Thanks to the intervention of central banks, of course, money supply growth in recent decades has never gone into negative territory.   Nevertheless, as we can see in the graph, significant dips in growth rates show up in years prior to a economic bust or financial crisis.  For insights into what's affecting money supply growth, we can look at loan activity, such as the Federal Reserve's measure of industrial and commercial loans.  In this case, we find that the growth rate in loans has fallen to a 74-month low, dropping to 1.9 percent. Loan growth has not been this weak since April of 2011, in the wake of the last financial crisis.

US Q2 GDP Growth Outlook Has Been Trimmed In Recent Weeks - Estimates for next week’s “advance” report on GDP growth for the second quarter continue to point to a rebound after Q1’s sluggish pace, but the outlook has been revised down in recent weeks.The Wall Street Journal’s latest survey data, for instance, is projecting a 2.7% advance for Q2 (real seasonally adjusted annual rate), based on this month’s average forecast. That’s an encouraging improvement over the 1.4% rise in Q1, but the Journal’s current projection has fallen from previous Q2 estimates. In May, the average forecast for economists was a bit firmer at 3.1%. Projections from other sources anticipate even softer growth for the Q2 GDP report that’s scheduled for release on July 28. The Atlanta Fed’s widely followed GDPNow model is currently forecasting that economic output will expand 2.4% (as of July 14), the bank’s softest Q2 estimate to date. Larry Fink, chief executive officer of BlackRock, told Bloomberg this week that the US economy is expanding at a softer pace than previously expected.“There are still dark clouds we have to face,” said Fink, in an interview with Bloomberg News on Monday. While corporate earnings have been good, “we aren’t seeing that rise in personal income we would have thought,” he said.Fink reiterated his concern that a risk to the market is the White House’s ability to quickly pass key reforms. “Are we going to see tax reform in the U.S.?” said Fink.Friday’s retail sales report underlined Fink’s concern. Spending fell 0.2% in June, below expectations for a 0.1% rise. The dip marks the second straight monthly decline — the first back-to-back decreases i n nearly a year. The annual pace of retail spending is still positive, although the trend has been decelerating this year, falling to a modest 2.9% increase through June, a 10-month low.

 Q2 GDP Forecasts --From Merrill Lynch:  Next week is the annual 2017 revision to the NIPAs, which will update real GDP growth and PCE inflation since 2014. ... Updates to the underlying source data and methodology are likely to result in only slight changes to past GDP growth. The story for inflation is less clear.  More important will be 2Q GDP growth, which we expect will accelerate to 2.1%.  From Goldman Sachs:  Our Q2 GDP tracking has declined [to 1.9%]    From the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.5 percent on July 19, up from 2.4 percent on July 14. From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.0% for 2017:Q2 and 2.0% for 2017:Q3.  CR Note: Looks like real GDP growth will be around 2% in Q2.

Treasury Reassures Markets About Secret Debt-Ceiling Plan - Treasury Department officials called bond traders and their advisers on Friday to assure them that the Trump administration isn’t considering prioritizing U.S. debt payments if Congress fails to increase the nation’s borrowing authority later this year, according to two people familiar with the matter. The calls came after Bloomberg News published a story about worries among traders that Treasury Secretary Steven Mnuchin may have to employ a secret plan written by the Obama administration to make sure debt payments are made, potentially at the expense of salaries for government employees, payments to contractors and other obligations. The Congressional Budget Office forecasts the federal government will hit its debt ceiling some time in October. Treasury Secretary Steven Mnuchin has urged Congress to increase the nation’s borrowing authority without brinkmanship, as in 2011 when a political showdown triggered the first downgrade of U.S. debt. That year, the Treasury and Federal Reserve developed a secret contingency plan to prioritize payments on government securities over other obligations in case Congress didn’t act in time. The plan was publicly revealed in January. While some conservative Republicans have pointed to debt-payment prioritization as an option for Treasury, perhaps even a preferred one, some financial market participants may regard it as the equivalent of a first-ever default on the national debt.  Anxiety among traders is gradually increasing as Congress shows no sign of grappling with the issue. Citigroup Inc. has said prioritizing debt payments would be a “dangerous precedent,” and Wrightson ICAP LLC’s Lou Crandall has called it a “truly terrible idea.”

House GOP Budget Ignores Trump’s Cuts to Domestic Agencies - President Donald Trump’s proposed budget cuts to federal agencies are about to strike out in Congress again. House Republicans on Tuesday are unveiling a 2018 budget that ignores Trump’s request for $54 billion in cuts to departments and agencies such as State and the National Institutes of Health. Instead, spending outside of defense would be reduced by $5 billion. The GOP proposal would boost funding for the nation’s defense by $72 billion, $18 billion more than Trump sought. Congress previously ignored Trump’s requested spending cuts for the last months of the fiscal year that ends Sept. 30. The new plan outlines $1.132 trillion in spending to keep the government open when the 2018 fiscal year starts Oct. 1. The House Budget Committee plans to vote on the plan Wednesday, with a vote by the full House expected next week. The budget also would start a fast-track process for achieving two long-sought Republican goals -- a tax-code overhaul and long-term cuts to entitlement programs such as food stamps and Medicaid. The GOP-controlled House and Senate would be able to pass both proposals with no Democratic votes. The tax code changes wouldn’t be able to be enacted without $203 billion in entitlement cuts over 10 years, though that amount hasn’t been fully agreed to yet by all House Republicans. It doesn’t provide any new detail on what the tax plan will look like. The proposal also would facilitate approval of a partial repeal of the Dodd-Frank financial law, as well as changes to medical malpractice tort law, and would help enact cuts to food stamps, among other policies. Drilling in the Arctic National Wildlife Refuge is projected to raise $1.8 billion, just as in the Trump budget proposal. Allowing drilling there would require a change in the law -- one repeatedly blocked on Capitol Hill amid concerns about oil exploration in the refuge threatening caribou, polar bears and other wildlife in the region. 

Big Military Spending Boost Threatens Our Economy and Security by Ron Paul --On Friday the House overwhelmingly approved a massive increase in military spending, passing a $696 billion National Defense Authorization bill for 2018. President Trump’s request already included a huge fifty or so billion dollar spending increase, but the Republican-led House found even that to be far too small. They added another $30 billion to the bill for good measure. Even President Trump, in his official statement, expressed some concern over spending in the House-passed bill. The big explosion in military spending comes as the US is planning to dramatically increase its military actions overseas. The president is expected to send thousands more troops back to Afghanistan, the longest war in US history. After nearly 16 years, the Taliban controls more territory than at anytime since the initial US invasion and ISIS is seeping into the cracks created by constant US military action in the country.   The Pentagon and Defense Secretary James Mattis are already telling us that even when ISIS is finally defeated in Iraq, the US military doesn’t dare end its occupation of the country again. Look for a very expensive array of permanent US military bases throughout the country. So much for our 2003 invasion creating a stable democracy, as the neocons promised. Unfortunately President Trump seems to be incapable of understanding that it is US intervention and occupation of foreign countries that creates instability and feeds terrorism. Continuing to do the same thing for more than 17 years – more US bombs to “stabilize” the Middle East – and expecting different results is hardly a sensible foreign policy. It is insanity. Until he realizes that our military empire is the source of rather than the solution to our problems, we will continue to wildly spend on our military empire until the dollar collapses and we are brought to our knees. Then what?

Space Cadets and Sex Changes: Our "Defense" Budget Is a Bad Joke -- The United States spends more on the military than the top eight countries combined – but that’s still not enough for our military-industrial-congressional complex. They want yet more tax dollars shoveled into that bottomless maw, and it looks like they’re going to get it. The House of Representatives just passed the National Defense Authorization Act (NDAA) for 2018, authorizing an all-time high of $696.5 billion. This is $72 billion over the budget cap required by sequestration legislation, and has to be reconciled with the $700 billion bill coming out of the Senate Armed Services Committee. Both bills spend more on the military than even the Trump administration – which pledged a massive military build up during the campaign – and the Pentagon proposed. The bill passed with bipartisan support: only 71 Democrats and 8 Republicans voted against it. The sole objection the Democrats had to this budget-busting bill was that military spending did not achieve “parity” with domestic spending: with 60 votes required in the Senate to abrogate sequestration caps, the Democrats are using their leverage not to reduce military spending, but to increase domestic spending. As Rep. Adam Smith, the ranking Democrat on the House Armed Services Committee, put it: [T]o simply gut the nondefense discretionary budget, to plus-up defense does not make this country safer. I care enough about national security that I would raise taxes to pay for it. Of course he would. That’s because the two parties have a symbiotic relationship when it comes to military spending: the Democrats go along with budget-busting “defense” bills as long as Republicans makes concessions insofar as domestic spending is concerned – and everyone gets to keep (and increase) their favorite boondoggles. 

 US Military Establishment Study Admits The American Empire Is "Collapsing" --A new study conducted by members of the U.S. military establishment has concluded that the U.S.-led international global order established after World War II is “fraying” and may even be “collapsing” as the U.S. continues to lose its position of “primacy” in world affairs.“In brief, the sta­tus quo that was hatched and nurtured by U.S. strategists after World War II and has for decades been the principal ‘beat’ for DoD is not merely fraying but may, in fact, be collapsing,” the report states.The report, published in June by the U.S. Army War College’s Strategic Studies Institute, evaluated the Department of Defense’s (DOD) approach to risk assessment at all levels of Pentagon policy planning. The study was supported and sponsored by the U.S. Army’s Strategic Plans and Policy Directorate; the Joint Staff, J5 (Strategy and Policy Branch); the Office of the Deputy Secretary of Defense for Strategy and Force Develop­ment; and the Army Study Program Management Office. As explained by Nathan Freier, the project director and principal author of the report, the U.S. and its defense establishment “are stumbling through a period of hypercompetition.”From Freier’s point of view, the current era is marred with furious battles for positional advantage at a number of levels, whether national, transnational, or extra-national. Freier explains that America’s failure to cope is the result of “hubris,” which is reminiscent of Imperial Hubris, a book by Michael Scheuer, the former head of the CIA’s bin Laden unit. Imperial Hubris also warned the U.S. about the very controversial and hubristic reasons it was losing the war on terror.

The ‘Worst Deal Ever’ That Actually Wasn’t - Today, the Iran nuclear deal turns two years old. In its critics’ eyes, it has already failed.  President Donald Trump and many of his supporters complain that it has not changed Iran’s regional behavior, pointing to Tehran’s continued support for regional proxies and ongoing ballistic missile tests as proof. Other critics, including Senators Tom Cotton, Ted Cruz, David Perdue, and Marco Rubio, who wrote a letter to the administration denouncing the deal just this week, suggest that Iran may actually be violating it. They allege a range of technical violations, even though the International Atomic Energy Agency—and Trump’s State Department, for that matter—have confirmed Iran’s compliance.In fact, the deal is doing exactly what is was supposed to do: prevent Iran from acquiring enough fissile material for a nuclear weapon, demonstrate to the Iranian public the benefits of cooperation with the international community, and buy time for potential changes in Iranian politics and foreign policy. Anyone who thought a deal would immediately change Iran’s regional agenda or who maintains that, if only America and its partners had insisted on such changes in the talks they would have materialized, has a misguided sense of what sanctions and diplomatic pressure can accomplish. Having been deeply involved in the negotiations, we think it’s important to be clear about the purpose, enduring benefits, and inevitable limitations of the agreement. The chief benefit of the agreement was to block Iran’s pathways to the bomb by freezing or reducing its capacity to produce the amounts of fissile materials required to do so—the most difficult step in the bomb-making process. Thus, as we know from the additional IAEA inspectors and 24/7 on-site cameras deployed as part of the agreement, Iran today operates only some 5,000 older-model centrifuges, maintains a much-reduced stockpile of enriched uranium, limits its centrifuge research and development programs, and has filled the core of its heavy-water nuclear reactor with concrete. Whereas experts assessed that, at the time of the deal, Iran was only months from being able to produce enough nuclear material for a bomb, under these new terms it is now at least a year away—plenty of time for the international community to anticipate any oncoming danger and respond accordingly.

Secretary Tillerson, It’s Time to Phone Iran - When ten American sailors found themselves captives of Iran’s Revolutionary Guards Corps in the Persian Gulf last year, then-Secretary John Kerry secured their freedom in less than sixteen hours. He used a remarkable instrument to score this stunning victory: A telephone.Within hours of their capture, Kerry had his Iranian counterpart, Foreign Minister Javad Zarif, on the line. They spoke five times that evening, but they already had a deal by the second call. The subsequent conversations served to handle logistical issues and resolve problems and misunderstandings that arose along the way. It had taken two years of intense discussions and negotiations for Kerry and Zarif to build the rapport that enabled them to so quickly resolve unforeseen crises such as that of the U.S. sailors. But once the channel of communications and the rapport had been established, its utility and efficiency was unquestionable. Indeed, the sailors’ incident could have ended up as another prolonged hostage crisis.  Former Secretary of Defense Robert Gates had no illusions about the end goal of the Saudis. The Saudis always want to “fight the Iranians to the last American,” he told his French counterpart in 2010. Since then, the Saudi appetite for a U.S.-Iran war has only grown.  Despite these hotspots, the Trump administration and Secretary Rex Tillerson have allowed the h otline with Tehran to go cold. Despite the significant risk of war, not a single phone call has taken place between Tillerson and Zarif. Not a single attempt at resolving the tensions diplomatically has been made.When asked about diplomacy with Iran during his visit to the Saudi kingdom, Tillerson said that he had no plans to reach out to Iran, although he didn’t rule it out in the future. That is simply not good enough. It is the foremost responsibility of the President and his administration to keep America safe and to only put American servicemen and women in harm’s way once all other options have been exhausted.On both of these counts, the Trump administration doesn’t just fail, they fail abysmally because they haven’t even tried. The United States is about to sleepwalk into yet another devastating war in the Middle East without a debate as to whether such an escalation lies in the U.S.’s national interest, and without the Trump administration even giving lip service to diplomacy. Other potential foes in the world observe this behavior as they consider the payoff of peaceful engagement with the U.S. versus conflict. Do we want to send those actors the message that the U.S. shoots first and asks questions later?

Trump Recertifies Iran Nuclear Deal, but Only Reluctantly - NYT - President Trump agreed on Monday to certify again that Iran is complying with an international nuclear agreement that he has strongly criticized, but only after hours of arguing with his top national security advisers, briefly upending a planned announcement as a legal deadline loomed. Mr. Trump has repeatedly condemned the deal brokered by President Barack Obama as a dangerous capitulation to Iran, but six months into his presidency he has not abandoned it. The decision on Monday was the second time his administration certified Iran’s compliance, and aides said a frustrated Mr. Trump had told his security team that he would not keep doing so indefinitely. Administration officials announced the certification on Monday evening while emphasizing that they intended to toughen enforcement of the deal, apply new sanctions on Iran for its support of terrorism and other destabilizing activities, and negotiate with European partners to craft a broader strategy to increase pressure on Tehran. Aides said Mr. Trump had insisted on such actions before agreeing to the consensus recommendation of his national security team.  At an hourlong meeting last Wednesday, all of the president’s major security advisers recommended he preserve the Iran deal for now. Among those who spoke out were Secretary of State Rex W. Tillerson; Defense Secretary Jim Mattis; Lt. Gen. H. R. McMaster, the national security adviser; and Gen. Joseph F. Dunford Jr., the chairman of the Joint Chiefs of Staff, according to an official who described internal discussions on the condition of anonymity. The official said Mr. Trump had spent 55 minutes of the meeting telling them he did not want to. Mr. Trump did not want to certify Iran’s compliance the first time around either, but was talked into it on the condition that his team come back with a new strategy to confront Tehran, the official said. Last week, advisers told the president they needed more time to work with allies and Congress. Mr. Trump responded that before he would go along, they had to meet certain conditions, said the official, who would not outline what the conditions were.

 The other Gulf conflict: How the Qatar crisis is playing out in D.C. back rooms -- As the effort to isolate the Qataris enters its seventh week, the Beltway lobbying has kicked into high gear. Various Saudi, Emirati and Qatari officials have made their way to Washington recently to convince American officials of the righteousness of their cause.Parallel to these government-to-government meetings, officials from these countries and their paid representatives are working hard to sway the views of what can be described as the “policy community” — the wonks, former officials and journalists who help drive the debate in Washington. It is a small part of the game that makes this town, in the words of journalist Mark Leibovich, “This Town.” The Qataris, who have been outclassed diplomatically for the better part of the last decade, have been particularly active playing catch-up, but almost every country involved has joined the fray. This “messaging,” for lack of a better term, comes in a variety of forms. There is the innocuous coffee with senior officials at the Four Seasons, the Mandarin Oriental, the Ritz or the Willard hotels in between meetings at the White House, the State Department and the Pentagon. There is, of course, a lot of spinning going on, but these encounters can also be informative if participants can push whatever minister beyond their prepared answers. Then there are the decidedly uncool offers to fly “thought leaders” to a given country so they can “gain a better understanding of … the situation.” One consultancy went so far as to offer to organize a meeting on the conflict and help find someone to pay for the event. This, to quote the dominant language of the region, is strictly haram, though it is reasonable to believe that some people have taken up the offer.

UAE orchestrated hacking of Qatari government sites, sparking regional upheaval, according to U.S. intelligence officials - WaPo - The United Arab Emirates orchestrated the hacking of Qatari government news and social media sites in order to post incendiary false quotes attributed to Qatar’s emir, Sheikh Tamim Bin Hamad al-Thani, in late May that sparked the ongoing upheaval between Qatar and its neighbors, according to U.S. intelligence officials. Officials became aware last week that newly analyzed information gathered by U.S. intelligence agencies confirmed that on May 23, senior members of the UAE government discussed the plan and its implementation. The officials said it remains unclear whether the UAE carried out the hacks itself or contracted to have them done. The false reports said that the emir, among other things, had called Iran an “Islamic power” and praised Hamas.The hacks and posting took place on May 24, shortly after President Trump completed a lengthy counterterrorism meeting with Persian Gulf leaders in neighboring Saudi Arabia and declared them unified. Citing the emir’s reported comments, the Saudis, the UAE, Bahrain and Egypt immediately banned all Qatari media. They then broke relations with Qatar and declared a trade and diplomatic boycott, sending the region into a political and diplomatic tailspin that Secretary of State Rex Tillerson has warned could undermine U.S. counterterrorism efforts against the Islamic State.In a statement released in Washington by its ambassador, Yousef al-Otaiba, the UAE said the Post article was “false.” “The UAE had no role whatsoever in the alleged hacking described in the article,” the statement said. “What is true is Qatar’s behavior. Funding, supporting, and enabling extremists from the Taliban to Hamas and Qadafi. Inciting violence, encouraging radicalization, and undermining the stability of its neighbors.”

Donald Trump Ends Covert CIA Program To Arm "Moderate" Syrian Rebels --President Donald Trump has elected to end the CIA’s covert program to arm and train "moderate" Syrian rebels fighting against the government of Bashar al-Assad in Syria according to U.S. officials who spoke to the Washington Post. The program was a central plank of a policy begun by the Obama administration in 2013 to put pressure on Assad to step aside, but even its backers have questioned its efficacy since Russia deployed forces in Syria two years later. Preceding the CIA program was a Pentagon-led effort which was criticized by Foreign Policy for costing $500 million without yielding tangible results. Officials said the phasing out of the secret program reflects Trump’s interest in finding ways to work with Russia after Trump's July 7 meeting with Putin at the G-20 Summit in Hamburg, Germany. It may also signal an lack of ability as well as desire by Washington to take steps to remove Assad from power in Syria. Officials told the Washington Post that Trump made the decision to scrap the CIA program nearly a month ago, after an Oval Office meeting with CIA Director Mike Pompeo and national security adviser H.R. McMaster. After the Trump-Putin meeting, the United States and Russia announced an agreement to back a new cease-fire in southwest Syria, along the Jordanian border, where many of the CIA-backed rebels have long operated. Trump described the limited cease-fire deal as one of the benefits of a constructive working relationship with Moscow. The ending of the CIA program was not a condition of the cease-fire negotiations according to officials. The "moderate" Syrian rebel groups operating in Syria have long been criticized for their close ties to jihadist groups such as ISIS and al-Nusra. In 2015, Western media finally admitted that there were no longer any “moderate” rebel groups operating in Syria. In January 2017, Representative Tusli Gabbard returned from a visit to Syria to confirm these reports, as well as to reveal that U.S. support was effectively delivering arms to jihadist groups such as al-Nusra, al-Qaida, Ahrar al-Sham and ISIS who are operating inside Syria. The Guardian has also reported that even the "anti-ISIS" force attempting to seize the group's regional capital in Raqqa, Syria is mainly comprised of mercenaries who have and will fight for jihadist groups if the price is right.

The US Deep State: Sabotaging Putin-Trump Ceasefire Agreement In Syria --The meeting between Trump and Putin at the G20 in Hamburg injects new hope into the complicated relationship between the United States and Russia. Only time can confirm whether there is any basis for this hope. The most eagerly anticipated meeting of the year, that between Putin and Trump, lasted far more than the scheduled 20 minutes, extending past two hours.The most important agreement concerned a ceasefire in southern Syria along the border with Israel and Jordan. This is a very active area of fighting, and so the ceasefire obviates the possibility of dangerous confrontations between the United States and Russia, as well as between Syria and Israel, which could escalate out of control as seen when the US Air Force shot down a Syrian Su-22 jet as well an Iranian drone. Israel, from its position in the occupied Golan Heights, has repeatedly struck the Syrian Arab Army (SAA), in a desperate effort to halt its gains against al Qaeda and Daesh terrorists.  The agreement on Syria now has to run the gauntlet of the deep state and all the other interests arrayed against Trump. Just four days following a similar agreement reached in 2016 between Obama and Putin, everything was upended by the US Air Force bombing and killing nearly a hundred soldiers of the Syrian Arab Army in Deir ez-Zor, shredding the ceasefire agreement that had just been reached. Trump is dealing with the same occult forces that sabotaged Obama’s ceasefire agreement. It is impossible to know how much strategic support the US deep state has for the ceasefire decision. Ever since the SAA reached the Iraqi border north of al-Tanf, the space available for the US and her allies to maneuver has been dramatically diminished. With al-Tanf isolated, Washington's ceasefire does not change or shift the already heavily altered balance of power in that area of Syria. For all these reasons, the ceasefire does not appear to be a concession by either party but merely a commonsense move to lessen the possibility of a direct confrontation between super-powers.

Exclusive: Bannon & Kushner Want to Outsource Afghanistan to Mercenaries - On July 10, the New York Times revealed that the Trump White House had recruited Erik Prince, the founder of the notorious private security firm Blackwater, and wealthy Trump backer Steve Feinberg, the owner of the high-profile military contractor DynCorp International, to “devise alternatives to the Pentagon’s plan to send thousands of additional troops to Afghanistan.” The story suggested that the president and his top advisers were dissatisfied with the military’s thinking on the conflict, the subject of an intense series of a consultations between senior military officers and Trump’s national security team over the last several months.While the recruitment of Prince and Feinberg, who are close friends, was intended to provide new options for winning the 16-year war, the administration has been hesitant to describe their role. Both men are controversial for their advocacy of the U.S. government contracting out the Afghan conflict to a private company that would build Afghan state capacity, provide logistical support to the Afghan army, and battle the Taliban. At the very least, the new arrangement would mean a lighter footprint for the U.S. military (or perhaps none at all); at the most it would mean that corporate America, and not the U.S. government, would be responsible for running an overseas war—a kind of “War Inc.”“Dyncorp has its hands all over Afghanistan anyway, and I mean they’re just everywhere,” a high-level former intelligence officer who is privy to the administration’s thinking told me, “so [senior White House adviser Steve] Bannon and crew figure, ‘What the hell, let’s just turn the whole country over to them.’” But the proposal has shocked the handful of senior Pentagon and CIA officials familiar with it, who point out the difficulty the United States has had in controlling private armies—and those who run them. This was particularly true of Blackwater, whose contractors gave the U.S. military fits in Iraq’s Anbar Province in the aftermath of Operation Iraqi Freedom, where both national security adviser H.R. McMaster and Defense Secretary James Mattis served in key command positions.

NATO-Russia Tensions Rise, Arms Makers Benefit -- naked capitalism by Jerri-lynn Scofield - In this Real News Network interview, Daryl Kimball, executive director of the independent, non-partisan Arms Control Association, based in Washington, D.C., discusses the U.S. decision to deploy, for the first time, advanced Patriot missiles as part of military exercises in the Baltic region, thus escalating tensions with Russia and helping boost military industry stock prices to record highs.

Congresswoman blames Paul Ryan for killing war act repeal - NY Daily News: The congresswoman behind repeated attempts to debate repealing the 9/11-inspired Authorization for Use of Military Force says Rep. Paul Ryan foiled her latest bid “in the dead of night." In a pair of exasperated tweets, Rep. Barbara Lee (D-Calif.) blamed the House Speaker for killing an amendment that could have reversed the President's ability to approve anti-terror assaults on a whim — and possibly end America’s war in Afghanistan. The pacifying measure was attached to next year’s military spending bill. “Ryan should be ashamed of himself for forcing Republicans to strip out my bipartisan AUMF (amendment) in the dead of night. What is he afraid of,” Lee wrote just before midnight Tuesday. Lee spokesman Christopher Huntley said the language was stripped from the defense bill at some point Tuesday night but did not provide an additional explanation.“This is outrageous,” Huntley said in a brief email to the Daily News.The Mercury News reported last week that Lee suspected Ryan would soon strip her amendment in lieu of another measure from Rep. Tom Cole (R-Okla.) after speaking with him on June 12. Lee unsuccessfully pitched her measure five times starting in 2010 and finally found a brief glimmer of triumph when the House Appropriations Committee unexpectedly approved the add-on on June 29 with overwhelming bipartisan support. Ryan stripped my 01 AUMF repeal amdt from DOD Approps in the dead of night. This is underhanded & undemocratic. The people deserve a debate! — Rep. Barbara Lee (@RepBarbaraLee) July 19, 2017

Trump And Putin Had Second, Previously Undisclosed Conversation During Dinner At G-20 --It has been exactly one week since the latest Russia story involving Trump, or in this particular his son, and with attentions once again starting to drift from the main news cycle narrative of the year, which was eclipsed today by the Senate republicans' humiliating failure to replace orrepeal Obamacare, on Tuesday afternoon a White House official confirmed that Donald Trump and Vladimir Putin held a second, previously undisclosed meeting at the G-20.While details of the meeting are scarce, the WaPo adds that halfway through the official dinner, President Trump left his seat to occupy an empty chair next to Russian President Vladimir Putin. Trump was alone, and Putin was attended only by his official interpreter. In other words, it happened in front during the so-called "mingling."  According to Eurasia Group president, Ian Bremmer, that Trump was not joined in the conversation by his own translator is a breach of national security protocol, though one that the president likely would not know about.“There was a couples-only social dinner at the G-20; toward the end, the president spoke to Putin at the dinner,” NSC spokesman Michael Anton says.The White House confirmed that the meeting took place during the G-20 heads of state dinner, hours after Trump's formal bilateral sit-down with Putin. In that conversation, Trump spoke with the Russian leader for roughly an hour, joined only by Putin's translator. And while the meeting took place in the open in front of all other leaders, it had previously gone without mention by the White House.

Donald Trump refuses to make state visit to UK until Theresa May ‘fixes warm UK welcome' - Donald Trump reportedly told Theresa May he will not make a state visit to the UK until he is guaranteed a "better reception". The US President asked the Prime Minister to prepare a "warm welcome" before he agrees to set a date, it has been claimed. The pair spoke on the phone to discuss the planned state visit, which has now been postponed until next year. "I haven’t had great coverage out there lately, Theresa," Mr Trump told Ms May, according to a transcript of the conversation seen by The Sun.  Ms May replied: "Well, you know what the British press are like." But Mr Trump added: "I still want to come, but I’m in no rush.

Chinese, US executives call for ‘prompt resolution’ of economic rows amid fears of trade war | South China Morning Post: Top executives of Chinese and American companies have urged their governments to promptly resolve trade disputes through “effective negotiation” amid concerns that the two nations are heading towards a trade war. Twenty business leaders made the appeal during the first US-China Business Leaders Summit held at the US Commerce Department in Washington on Tuesday. The event was co-chaired by the head of the Chinese e-commerce giant Alibaba, Jack Ma, and the chief executive of the US investment and financial services firm Blackstone, Stephen Schwarzman. “While respecting the use of traditional trade remedies, we hope that trade disputes can be resolved through effective negotiation with both sides working for prompt resolution,” a statement from the summit said.The call came after US President Donald Trump said last week he was mulling slapping steel import quotas and tariffs on China. “They’re dumping steel and destroying our steel industry, they’ve been doing it for decades and I’m stopping it. There are two ways - quotas and tariffs. Maybe I’ll do both,” he told reporters. The appeal by the business executives also came a day before the US and Chinese government officials are to hold the first high-level Comprehensive Economic Dialogue, co-chaired by US Commerce Secretary Wilbur Ross, US Treasury Secretary Steven Mnuchin and Chinese Vice-Premier Wang Yang. The talks are one of four mechanisms aimed at increasing dialogue set up by China’s President Xi Jinping and Trump during their summit meeting in Florida early April. 

Trump administration weighing sanctions on imports of Venezuelan oil -- The Trump administration is considering a ban on US imports of Venezuelan crude oil, one of a number of sanctions considered in response to Venezuelan President Nicolas Maduro's pledge to rewrite that country's constitution. During a briefing with reporters Tuesday, a senior administration official said sanctions on crude oil imports, as well as targeted sanctions on individuals were being weighed, but declined to comment in detail. "All options are on the table," the official said, adding that sanctions could be imposed before July 30. "All options are being discussed and debated." The official said that administration officials were "mindful" of the impact potential sanctions on crude imports would have on US businesses and consumers and said all economic effects were being studied. "The United States will not stand by as Venezuela crumbles," President Donald Trump said in a statement Monday night. "If the Maduro regime imposes its Constituent Assembly on July 30, the United States will take strong and swift economic actions."

President Trump Unveils Goals for a New NAFTA Deal With Canada and Mexico — President Donald Trump vowed Monday to boost U.S. manufacturing by cutting the $64 billion trade deficit with Mexico as he showcased products made in all 50 states — everything from a fire truck to a baseball bat. "No longer are we going to allow other countries to break the rules, to steal our jobs and drain our wealth," Trump said at a White House event that spilled from the East Room to the South Lawn. Shortly after Trump's remarks, the U.S. trade representative released an 18-page report about its goals for updating the decades-old North American Free Trade Agreement with Canada and Mexico. In addition to reducing the trade deficit, the administration wants to insert a chapter on the digital economy into the deal. It also wants to strengthen labor and environmental obligations, as well as amending the rules of origin so that more of the products traded come from the United States and North America.Facing an investigation into his campaign's ties with Russia and a tax and health care agenda struggling to make headway as quickly as promised, Trump is turning his focus to trade this week. Administration officials are to meet Wednesday with economic officials from China, a nation the president has accused of dumping steel on the global market to hurt U.S. steelmakers. The White House emphasis on trade follows a string of other recent theme weeks on energy, job-training and infrastructure that mostly failed to draw much attention away from the Russia inquiry.  The new NAFTA objectives, a requirement to begin talks on updating the agreement in the next 30 days, contain the first specifics for a Trump administration that has made bold promises on trade. Trump has pledged to recover factory jobs and boost wages by crafting new trade deals. Supporters note that NAFTA enabled companies to charge cheaper prices for products that range from cars to vacuum cleaners, helping many U.S. consumers.

White House Lays Out Nafta Renegotiating Strategy --The US today released a 17-page outline of a "tough negotiating strategy" to revise the 1994 North American Free Trade Agreement, meant to reduce trade imbalances with Mexico and Canada and boost exports of everything from farm goods to financial services while for the first time saying it would seek to deter currency manipulation by trading partners. The outline comes in advance of preparations to kick off heated negotiations to revamp Nafta.The much anticipated document (press release and link to full document) released by U.S. Trade Representative Robert Lighthizer said the Trump administration aimed to reduce the U.S. trade deficit by improving access for U.S. goods exported to Canada and Mexico and contained the list of negotiating objectives for talks that are expected to begin in one month. Topping Trump’s list is a "simple" objective: “improve the U.S. trade balance and reduce the trade deficit with Nafta countries.” Lighthizer said that the negotiations would begin no earlier than Aug. 16, 2017.Among other things the document makes the unexpected assertion that no country should manipulate currency exchange to gain an unfair competitive advantage, which according to Citi's economists was the only notable surprise in the entire document:That line of focus centers on FX: “Through an appropriate mechanism, ensure that the Nafta countries avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.”Citi Economics highlighted this as one of the most controversial risks of inclusion in these guidelines. However, it also cited belief that if included in the principles, this issue may need to be addressed separately. Specifically for countries like CAD and MXN.

NAFTA Plan Does Not Describe Promised Transformation of NAFTA to Prioritize Working People - Lori Wallach, Public Citizen  - “This document does not describe the promised transformation of NAFTA to prioritize working people that some voters were expecting based on President Trump’s campaign pledges. More than 910,000 specific American jobs have been certified as lost to NAFTA under just one narrow program, but this document does not make clear whether NAFTA’s job offshoring incentives or its ban on Buy American procurement policy will be eliminated or labor or environmental standards better than the widely rejected one in the TPP will be added. The document is quite vague so while negotiations can start in 30 days, it’s unclear what will be demanded on key issues, whether improvements for working people could be in the offing or whether the worst aspects of the TPP will be added making NAFTA yet more damaging for working people. The administration should follow the European Union’s practice and make public its actual proposals being shared with Mexico and Canada prior to talks starting. The Trump administration has a very narrow pathway to both achieving the president’s campaign pledges on NAFTA and passing a new NAFTA deal. Achieving Trump’s campaign-promised NAFTA deficit-lowering and U.S. job creation goals will require changes to NAFTA that GOP congressional leaders and the corporate lobby oppose and about which this document remains vague. Even if a bloc of GOP rank and file members may support elimination of NAFTA’s investor offshoring incentives and Buy American ban, which are necessary to achieve Trump’s goals, a sizeable bloc of Democratic votes will be needed to pass a new NAFTA of that sort. But GOP congressional leaders and the corporate lobby are demanding TPP elements be added to NAFTA and that will push away Democrats. Some aspects of that TPP agenda can be seen in today’s document because much of the text repeats the negotiating objectives of the 2015 Fast Track bill, which GOP leaders and the corporate lobby loved and most congressional Democrats, a sizeable bloc of GOP congressional members and labor and civil society groups opposed.”

Trump’s Modest Proposal for a Nafta Revamp -- Donald Trump has gone squishy by stages on the North American Free Trade Agreement, which he once called “the worst trade deal maybe ever signed anywhere.” In April, aides persuaded him not to abrogate the 23-year-old trade pact with Canada and Mexico. On July 17, moderates scored another victory: The Office of the U.S. Trade Representative released objectives for renegotiating Nafta that aim to tune it up, not gut it. “Overall this looks like a Nafta modernization. It’s not like the whole of Nafta is up for grabs,” says Antonio Ortiz-Mena, a senior adviser at Albright Stonebridge Group, a Washington ­diplomacy advisory firm, who ­previously headed the economic affairs section of the Mexican Embassy. Even after Trump relented last spring on killing the three-way pact, some analysts expected he would direct U.S. Trade Representative Robert Lighthizer to take a hard, nationalistic line in talks on updating it. After all, in January the president had threatened a 20 percent tariff on Mexican goods to pay for the border wall. There are no such threats in the trade rep’s letter to Congress spelling out the administration’s objectives. The administration is OK with maintaining tariff-free, quota-free trade among the three countries.True, there’s some harsh language about Nafin the 18-page document. “Since the deal came into force in 1994, trade deficits have exploded,” it says. “For years, politicians promising to ­renegotiate the deal gave American workers hope that they would stop the bleeding. But none followed up.” Trump, it says, is finally doing what others only promised. But that campaign-style language is confined to the introduction. What follows are mostly mainstream ideas for furthering trade liberalization, such as speeding goods through customs and ensuring that health and safety regulations aren’t ­manipulated to block imports.

Can Trump resurrect US aluminum, and who killed it anyway? (Reuters) - Alcoa is bringing one of its U.S. aluminum smelters back from the dead. The Warrick smelter in Indiana has annual capacity of 269,000 tonnes, its own coal-based power source and is integrated with a rolling mill. None of which saved it from Alcoa's scramble down the cost curve in the face of falling prices, culminating in its permanent closure in January 2016. That's different from what the industry calls a "curtailment", a temporary idling for possible restart. But now, miraculously, Warrick is back and Alcoa will fire up three of the plant's five production lines, with capacity of 161,400 tonnes of aluminum. The other two will be classified as "curtailed". The timing of this resurrection is politically charged. The Trump administration is determined to curb imports of aluminum, along with steel, with the aid of some heavy national security artillery. The results of both so-called Section 232 investigations are pending. And Alcoa, for one, "appreciates the actions the Trump administration has taken to address the challenges faced by the U.S. aluminum industry, including Chinese overcapacity". The United States had 23 operating plants in 1998. It now has five, soon to be become six. There is a little more than a million tonnes of capacity lying idled, ready for restart if the conditions are right.

US tire industry has a lot at stake if steel regulation changes | TheHill:  In the United States, tire manufacturers provide over 737,000 jobs, operate 55 tire-related manufacturing facilities in 19 states and generate over $148.4 billion in sales as an industry, demonstrating the important and critical role tire manufacturing plays in the nation’s shipping and commerce needs. Virtually all steel used in U.S. tire manufacturing must be imported, as domestic steel suppliers cannot meet volume and quality needs for this critical tire safety component. Thus any trade constraint could potentially have a cascading, negative impact on U.S. commerce nationwide, as the transportation industry depends on a reliable supply of tires to ship goods. Additionally, the U.S. military depends on the tire manufacturing industry to supply tires used to protect our national security. That’s why the U.S. Tire Manufacturers Association has made a compelling case to the Commerce Department that specific types of cord-quality steel wire rod, tire cord and bead wire used in tires must be exempted from any trade restrictions being considered as part of its current market investigation in order to avoid a disruption in tire manufacturing in the U.S. Overall, steel used in tire manufacturing is less than one percent of total U.S. steel production, so an exemption would not negatively impact steel manufacturers nationally. However, while tires aren’t a major factor in overall steel consumption, steel does play a vital role in the production of tires. Steel is a critical part of what makes a tire functional as well as safe to operate, and tires manufactured in the United States are responsible for safely transporting millions of Americans and millions of tons of goods each day.

U.S. steel tariffs likely to trigger swift EU 'safeguard’: sources -(Reuters) - U.S. President Donald Trump's plan to impose steel import tariffs for national security reasons would likely trigger a swift "safeguard" action by the European Union, political and industry sources said. Resorting to a Cold War-era law, Trump has initiated a 'Section 232' review of the U.S. steel industry that allows for the imposition of tariffs or quotas on imports if they are found to threaten national security. The move has been widely criticized by diplomats who warned it risks sparking retaliatory action and undermining the global trading order if national security becomes an accepted excuse to break global trade rules. Challenging the plan through the World Trade Organization's dispute system would take years. However, the WTO also allows countries to impose an emergency "safeguard" tariff to protect against a sudden, unforeseen and damaging import surge. "I understand that's the direction they’ll go in... That's what they want to do," a Brussels-based trade lawyer said. The U.S. Commerce Department could recommend Trump's tariff plan this week, though American manufacturers, energy companies and retailers reliant on cheap steel are also understood to be lobbying hard against it.While the U.S. tariffs would be aimed primarily at China, the EU fears steel headed for the United States would be redirected to its shores. Steel is the second biggest industry in the world after oil and gas. With Trump's support based largely in rust-belt states where job losses are widely blamed on subsidized steel from China, the matter has risen fast up the political agenda. An EU source said the problem with taking the matter to the WTO was that it would probably take at least three years to resolve. "But I believe there are also possibilities in the Safeguard Agreement. Read the Safeguard Agreement," the source said. "I can tell you that our people are looking actively, and yes, there are ways to respond more quickly than after three years." 

The Problem With Trump's Steel Tariffs - Annie Lowrey - The White House has branded this, the 29th week of the year, “Made in America” week. As part of the week, administration officials are promoting American products and outlining a strategy to roll back the North American Free Trade Agreement, arguing that their policies will boost wages for the middle class and create jobs in manufacturing communities. “We’re going to end up having a level playing field,” Trump said this week. The most controversial part of this policy initiative—not yet announced, not yet certain, but widely anticipated—would be placing additional tariffs on foreign steel. “Steel is a big problem,” Trump told reporters on Air Force One, coming back from the Group of 20 meeting in Germany earlier this month. “I mean, they’re dumping steel. Not only China, but others. We’re like a dumping ground, okay? They’re dumping steel and destroying our steel industry. They’ve been doing it for decades, and I’m stopping it. It’ll stop.” Many economists and industry experts agree that the United States faces unfair competition and artificially low prices that have damaged the domestic steel industry. But they don’t agree that a tariff is the right approach for addressing the problem. They argue that tariffs could backfire, hurting American businesses and workers without doing much to revive the Rust Belt. Trump promised to restore the heartland with tariffs on imported goods during his presidential campaign, often in offhanded and extreme terms and often targeting China in particular. “They want our people to starve,” he said before becoming president, saying there was “no choice” but to start a trade war with the country.. “Steel and aluminum are vital for U.S. national defense and critical infrastructure,” Robert E. Scott of the Economic Policy Institute, a left-of-center think tank, said in a piece supporting the idea. Foreign trade practices have made it impossible for the United States to supply its own steel for defense purposes, the theory goes.But many trade experts, as well as foreign countries and American industry leaders, have raised questions about applying tariffs on those grounds.  Trade experts argue that using Section 232 to achieve a non-security objective would be a misuse of a policy meant for true emergencies and a violation of norms and trade law. The case is “likely to raise barriers that don’t meet the international legal standards of the World Trade Organization, leading to disputes at the W.T.O. and retaliation from trading partners,” argues Chad P. Bown of the Peterson Institute of International Economics.

So You Want to Fix the Trade Deficit? - Menzie Chinn -- Well, I don’t think a few tariffs and quotas, plus “tweaking” Nafta, are going to do it. And blowing a hole in the Federal deficit ain’t likely to help. First take a look at the trade deficit as defined in the national income accounting sense (i.e., “net exports”), expressed as a share of GDP:  Figure 1: Net exports (blue), net exports ex.-petroleum products (red), and current account (light green), as a share of nominal GDP.  Notice that net exports have improved since the onset of the Great Recession, in part because of slower growth, a depreciated dollar, and an increases in petroleum product exports (as highlighted by the fact that the ex-petroleum net export series moving closer to balance than the overall). The dollar’s value is one key factor in these movements. Below in Figure 2, the dollar exchange rate against a broad basket of currencies (defined such that a downward movement is a appreciation) is graphed, lagged two years, against net exports, ex-petroleum (under the presumption that exchange rates do not exert direct effects on oil prices which are denominated in USD).  So, the question is whether trade measures will have a noticeable impact on the trade balance (this is a separate question from whether it’s welfare improving to impose such barriers). The answer depends in large part whether you think the impacts of US income and the dollar’s value (the two key variables) are going swamp any changes in relative prices coming from tariffs and quotas imposed at the sectoral level.  I tend to think that level of US national saving (the sum of government budget surplus and private saving) and desired investment tend to drive the trade balance (approximately the current account, as shown in Figure 1) more than the trade balance drives the US budget balance, private saving and investment. In that framework, trade protection measures have second order effects, unless they were to drastically change these macro aggregates. Tariff revenues are too small to affect the budget balance. It is hard to see how they increase private savings; maybe they could affect investment in protected sectors — but that works in the wrong direction. (More on the national saving identity here).So, the Trump project of reducing trade deficits through protection, while maintaining growth (protection which triggers retaliation and a global slowdown could “work” to reduce the US trade deficit) is doomed to fail. Something to remember, as the House starts trundling toward massive budget busting tax cuts (well, unless you believe spending cuts will be imposed in line with the tax cuts; if you do, well David Stockman has a bridge to sell you).

US and China emerge from trade talks without agreement - BBC News: The US and China have wrapped up contentious trade talks in Washington without agreement. The two sides did not issue a joint statement or action plan after the meeting and cancelled scheduled press conferences. The US was critical of China's trade surplus and demanded "more fair" trade arrangements. Separately, US President Donald Trump indicated that tariffs on Chinese steel were still a possibility. In his opening remarks to the annual US-China Comprehensive Economic Dialogue, US Commerce Secretary Wilbur Ross criticised China's $347bn (£266bn) trade surplus with the US, saying it was not the product of market forces. In a brief statement after the talks, Mr Ross and US Treasury Secretary Steven Mnuchin offered few details and little indication of any progress on contentious issues. "China acknowledged our shared objective to reduce the trade deficit which both sides will work cooperatively to achieve," the statement said. The contentious issue of steel tariffs was expected to be a difficult topic at the talks, but the two sides did not issue any statements on this. The US blames Chinese excess capacity for a global steel glut that is hurting US producers, and has threatened to impose tariffs. US Steel stocks were sharply higher as investors interpreted silence on the issue as an increased likelihood of US action on Chinese steel. After the market closed, President Donald Trump told a reporter that steel tariffs "could happen", according to Reuters news agency. 

Exclusive: U.S. toughens stance on foreign deals in blow to China’s buying spree (Reuters) - A secretive U.S. government panel has objected to at least nine acquisitions of U.S. companies by foreign buyers so far this year, people familiar with the matter said, a historically high number that bodes poorly for China's overseas buying spree. The objections indicate that the Committee on Foreign Investment in the United States (CFIUS), which reviews acquisitions by foreign entities for potential national security risks, is becoming more risk-averse under U.S. President Donald Trump. Chinese companies and investors eyeing U.S. assets could face more roadblocks as a result, at a time when the Chinese government is also restricting the flow of capital out of China following a bonanza of Chinese overseas deals. There have been 87 announced acquisitions of U.S. companies by Chinese firms so far in 2017, the highest on record and up from 77 deals in the corresponding period in 2016. CFIUS's more conservative stance toward deals coincides with growing political and economic tensions between the United States and China. On Wednesday the two countries failed to agree on major new steps to reduce the U.S. trade deficit with China. Since the start of the year, CFIUS has sent letters to companies involved in at least nine deals to say they would be blocked based on measures they have proposed to address potential national security risks, the people familiar said. Many of these deals are in the technology sector, the sources said. A rise in cyber security threats and rapid advances in technology makes it more difficult to establish whether a deal poses any threat, lawyers who represent companies before CFIUS said. An initial objection by the watchdog does not necessarily kill the deal immediately. 

 Sleeping Monster: The Trade in Services Agreement (TiSA) and the Supply Chain -- naked capitalism by Lambert Strether - Trade[1] activists may regard the defeat of TPP — its (no doubt feigned) rejection by Democrat candidate Clinton, and its deep-sixing by President Trump on his third day in office — as a victory, and they’re not wrong. But it’s a mistake to regard the defeat of a deal as the defeat of the deal-makers: The forces and drivers behind the deal, which, if unchecked, will simply emerge with a [cough] new deal serving the same objectives. In this post I want to look briefly at the the state of play in “trade,” and then begin to look at the Trade in Services Agreement (TiSA) —  because, unlike the regional TPP, TiSA is a global agreement, because it’s far less undead than TPP, and because it provides great insight into the future world our globalist elites would like us to live in[2]. I’m going to take the supply chain as my starting point for future posts on TiSA, because it’s about “stuff,” and as readers know I like stuff: Shipping containers, boats, trucks, trains, planes, the UPS guy with the package, and so on. My interest in TiSA was renewed by this report: TiSA: Foul Play (PDF)[3], authored by Professor Jane Kelsey of the University of Auckland, a trade activist, and I’m going to be relying on that report for some key points in this and future posts. (There is the a text of TiSA at WikiLeaks, thankfully; in future I’ll try to get more into detail.)

  Sleeping Monster: The Trade in Services Agreement (TiSA) and Its Expansive Definition of “Services” --  Lambert Strether - Deals come and go. Deal-makers do not (and in fact the incorporate the texts of past deals into new deals, as if the past deals were organ donors). I’d also like to introduce the perspective that TiSA enacts a neoliberal utopia[3]: The text of TiSA (available at WikiLeaks) expresses, in the driest possible bureaucratic prose, a vision or dream of the future world in which the globalist elites would like us to live.[4] So, even if TiSA as a deal is defeated, the dealmakers who drive it will not give up their dream; the dream will simply return, revised, and repackaged, in a new guise, until the sleepers wake. TiSA-as-utopian-dream also provides an account of something that was been a mystery to me: Why, after a 2016 election that turned on trade, and an administration that deep-sixed TPP on day three, and a general flattening of world trade since the Crash, has commercial real estate continued to intensify its investment in warehousing, have ports continued to expand, has Amazon gone into the airfreight business, has Silicon Valley gone gaga for robots that deliver stuff, and on and on and on? You would think that if globalization has jumped the shark (Martin Wolf: “The tide of globalisation is turning”), that investment in these areas would flatten or go down. The answer, or an answer, is that the elites who make those investment decisions are still enthralled by the dream. . I’m guessing that one reason that TiSA has been able to slip beneath the radar, unlike TPP, is that people say: “Oh, it’s just about services!” But as it turns out, the scope of “services” is very broad, another reason for TiSA’s wildly ambitious, globally utopian scale.

U.S. Lawmakers Seek to Criminally Outlaw Support for Boycott Campaign Against Israel - The Intercept - The criminalization of political speech and activism against Israel has become one of the gravest threats to free speech in the West. In France, activists have been arrested and prosecuted for wearing T-shirts advocating a boycott of Israel. The U.K. has enacted a series of measures designed to outlaw such activism. In the U.S., governors compete with one another over who can implement the most extreme regulations to bar businesses from participating in any boycotts aimed even at Israeli settlements, which the world regards as illegal. On U.S. campuses, punishment of pro-Palestinian students for expressing criticisms of Israel is so commonplace that the Center for Constitutional Rights refers to it as “the Palestine Exception” to free speech.  But now, a group of 43 senators — 29 Republicans and 14 Democrats — wants to implement a law that would make it a felony for Americans to support the international boycott against Israel, which was launched in protest of that country’s decades-old occupation of Palestine. The two primary sponsors of the bill are Democrat Ben Cardin of Maryland and Republican Rob Portman of Ohio. Perhaps the most shocking aspect is the punishment: Anyone guilty of violating the prohibitions will face a minimum civil penalty of $250,000 and a maximum criminal penalty of $1 million and 20 years in prison. The proposed measure, called the Israel Anti-Boycott Act (S. 720), was introduced by Cardin on March 23. The Jewish Telegraphic Agency reports that the bill “was drafted with the assistance of the American Israel Public Affairs Committee.” Indeed, AIPAC, in its 2017 lobbying agenda, identified passage of this bill as one of its top lobbying priorities for the year:

From acne to pregnancy, here's every 'preexisting condition' that could put your insurance at risk under the Senate's healthcare bill -- Republicans in the Senate released an updated version of the Better Care Reconciliation Act, their plan to overhaul the US healthcare system.  Included in the revised bill is an amendment from Sen. Ted Cruz and Sen. Mike Lee that critics say could make plans with adequate coverage unaffordable to those who have certain medical conditions.  The amendment would allow plans to exist that don't comply with two regulations set up under the Affordable Care Act: community rating and essential health benefits. The latter could have a big impact on preexisting conditions.  So what counts as a preexisting condition that could get you denied coverage under the new plan?  A lot.  A preexisting condition is a term insurance companies used before the ACA, the healthcare law better known as Obamacare, to classify certain diseases or health problems that could cause a person to be denied coverage or make their coverage more expensive than that of people considered healthy.  The Kaiser Family Foundation estimates that 27% of Americans under 65 have health conditions that could leave them without access to insurance. Some of the pre-existing conditions that insurers declined coverage because of before the ACA, according to the foundation, include diabetes and heart disease, which affects millions of Americans.  (list)  One of the critical parts of the ACA was that it prohibits insurers from denying coverage to or charging more for people with pre-existing conditions. That has been in effect since 2014.  That means that if you had any of those conditions listed above — asthma, for instance — you still could have the same insurance as someone who had a clean bill of health and someone who is a cancer survivor, pregnant, or obese.  The House of Representatives ran into a similar situation with the American Health Care Act, which passed a vote in the House with the MacArthur amendment attached. The amendment would allow states to avoid some of the regulations imposed by the ACA. Experts say that could weaken the regulations around preexisting conditions. With the Cruz amendment, because some health plans wouldn't have to necessarily adhere to the community rating, and essential health benefits, those that do would receive funding to offset the higher premiums that would result relative to the plans that don't cover the regulations. Whether that funding would be enough to make the plans affordable remains to be seen.

Medicaid by the numbers - All of this is cribbed from a Viewpoint today in JAMA by Ben Sommers and David Grabowski.  Medicaid beneficiaries in 2017:

  • Total: 77 million people
    • Kids: 34 million
    • Elderly: 6 million
    • Blind and disabled: 9 million
    • Pregnant women: 2 million
    • Parents and childless adults: 27 million

For those of you keeping track at home, this means that only 35% of beneficiaries aren’t kids, old, blind, disabled, and/or pregnant. Remember that when people should say that Medicaid recipients should “try harder”. Also, of that 35%, many already have jobs. Some are stay-at-home parents. So the number of people who could “try harder” isn’t as many as lots of people think.  Under the ACA, it’s projected that 86 million beneficiaries would exist in Medicaid. If repeal and replace happens, it would go down to 77 million. And if you cut, where will it come from? Pregnant women are included in the 19% of parents and childless adults. There’s not that much fat. So do you cut care for kids? For the blind and disabled? For the elderly? The numbers don’t add up easily. There’s no magic here. People will get “sent” to private plans with huge deductibles. It won’t be better.

Senate To Delay Health Vote After McCain Blood Clot Surgery --The Senate will "defer" its work on repealing and replacing Obamacare Majority leader Mitch McConnell said late on Saturday, as John McCain, 80, recovers from surgery to remove a blood clot above his eye Reuters reports. The health care reform bill, which is already neared collapse as senators Rand Paul and Susan Collins have already said they would oppose it, would fail without McCain's vote. With Democrats united in opposition, McConnell needs support from at least 50 out of 52 Republicans to pass the measure in the 100-member chamber. In the event of a 50-50 split, Vice President Mike Pence would cast the tie-breaking vote."There are few people tougher than my friend John McCain, and I know he'll be back with us soon," Republican Majority Leader Mitch McConnell said in a statement wishing the senior Arizona lawmaker well. "While John is recovering, the Senate will continue our work on legislative items and nominations, and will defer consideration of the Better Care Act." The Mayo Clinic, which performed the surgery Friday in Phoenix, said the five-centimeter (two-inch) blood clot was "successfully removed" from above his left eye during a "minimally invasive" craniotomy with an eyebrow incision. Tissue pathology reports are due in the coming days with McCain's office saying on Saturday that the lawmaker, "in good spirits and recovering comfortably at home with his family," would recover in Arizona through next week.

Bizarro World -- At least 40 Republican Senators and possibly the critical 50 have decided to stand up to the lobbyists, the interest groups and big business. They are willing to vote for the Cruz amended BCRA which would not just repeal Obamacare, but also destroy US individual market health insurance. If they do so, they stand up to many of the most powerful lobbies including the AMA and the AARP (but not the NRA or AIPAC). Most importantly, they reject the very firm claims and fierce arguments of the relevant health insurance industry lobby AHIP AHIP (and BCBS) wrote an extraodinarily passionate and detailed letter to the Senate which included “this provision will lead to far fewer, if any, coverage options for consumers who purchase their plan in the individual market. As a result, millions of more individuals will become uninsured.” Notice the future indicative (which I will never ever use). The claim is definite and made with absolute confidence. They express 100% confidence that enacting the reform (with the Cruz amendment) will cause a disaster. The amazing thing is that AHIP is demanding that its members be regulated. They are asserting that they will damage the country if allowed ““As healthy people move to the less-regulated plans, those with significant medical needs will have no choice but to stay in the comprehensive plans, and premiums will skyrocket for people with preexisting conditions”. This correctly asserts that AHIP members will cherry pick if they are allowed to. AHIP correctly assumes that AHIP members will destroy the health insurance system for short term gain if allowed. It’s like a serial killer cherry picker writing “stop me before I medically underwrite again”. It is bizarre for an industry to demand regulation to protect consumers from them. The suspicion must be that the concern for the general public is an excuse for support for regulation which helps incumbents or limits competition. The second Bizarre thing is that I personally don’t doubt the sincerity of the lobbyists advocating regulation in the public interest of the members of the lobby. For one thing, their claims are obviously correct and at least an overwhelming majority of independent experts agree. In fact, I haven’t read a defence of the Cruz amendment by ultra hack Avik Roy (I think there is one by uber hack Stephen Moore). I don’t think that an honest case can be made that an industry lobby isn’t sincerely acting (this time) in what it’s officers consider to be the public interest.

New Study Finds U.S. Healthcare System Ranks Dead Last Compared To Other Developed Nations -- As Republicans sit on the precipice of fumbling what will likely be their one opportunity to repeal and replace America's failed Obamacare experiment, a new study just released by The Commonwealth Fund found that the U.S., despite spending more money per capita than any other country on the planet, has the worst healthcare system in the developed world. The Commonwealth Fund focused on evaluating five main areas of the healthcare system, including care process, access, administrative efficiency, equity and health care outcomes and analyzed 72 indicators within those fields.  Of the 11 countries included in the study, the U.S. ranked dead last by a fairly staggering margin. The United States spends far more on health care than other high-income countries, with spending levels that rose continuously over the past three decades (Exhibit 1). Yet the U.S. population has poorer health than other countries. Timely and accessible health care could mitigate many of these challenges, but the U.S. health care system falls short, failing to deliver indicated services reliably to all who could benefit. In particular, poor access to primary care has contributed to inadequate prevention and management of chronic diseases, delayed diagnoses, incomplete adherence to treatments, wasteful overuse of drugs and technologies, and coordination and safety problems.

NBC News/WSJ Poll: Just 12% in Key Trump Counties Back GOP Health Care Effort - NBC News: Just 12 percent of Americans living in the counties that fueled Donald Trump's win in the 2016 presidential election support the Republican Party's efforts on health care, according to results from the NBC News/Wall Street Journal poll of these "Trump counties." Asked their views on the health care legislation passed by the House of Representatives in May and backed by President Trump, 12 percent of the respondents in these counties — consisting of Republicans, Democrats and independents — called the bill a good idea, while 41 percent said it was a bad idea. Forty-seven percent had no opinion or say they’re not sure. Even among Trump voters in these counties, only 25 percent believe the House GOP health care bill is a good idea, 16 percent think it’s a bad idea and 59 percent have no opinion or are unsure. That’s compared with 75 percent of Hillary Clinton voters in these counties, who say the legislation is a bad idea, zero percent who say it’s a good idea and 26 percent who have no opinion or are unsure. Last month’s national NBC/WSJ poll found that 16 percent of all Americans called the House bill a good idea, versus 48 percent who see it as a bad idea.

This ridiculous Republican propaganda is exactly why we need the CBO  -- Catherine Rampell -- Tuesday I wrote about the GOP’s systematic efforts to discredit and disempower any independent voice — media, the Congressional Budget Office, the Office of Government Ethics — that tries to hold government accountable. Today we have a great example of the ridiculous propaganda that Republicans expect the public to swallow in the absence of such independent critics and scorekeepers. The Washington Examiner has gotten its hands on a Trump administration “analysis” (I use that word loosely) of the Consumer Freedom Amendment, a proposal from Sen. Ted Cruz (R-Tex.). ...  Talk to literally any economist, including conservative ones, and you’ll learn that this idea would lead to adverse selection, a huge spike in premiums for sick people (who would sort into the Obamacare-compliant plans), a proliferation of mini-med junk plans that cover virtually nothing (which would attract the healthier people), and a possible death spiral. A more detailed explanation of this phenomenon is here.  The nonpartisan Congressional Budget Office would normally be tasked with assessing the impact of such a proposal, on both the federal budget and health insurance markets: coverage rates, premiums, etc. Last week, however, Sen. John Thune (R-S.D.) suggested that there might not be sufficient time for the CBO to score the bill before Republican leadership’s artificially short deadline. Sad! Thune thus proposed the unprecedented strategy of cutting the CBO out of the bill-scoring process entirely. Instead, he suggested, Republicans could just use an analysis to be crafted by either the Department of Health and Human Services or the Office of Management and Budget — i.e., the White House. Which, unlike CBO, has a dog in this fight. ... Contrary to the predictions of economists everywhere, the HHS propaganda document claims that the Cruz amendment would cause insurance coverage to go up and premiums to fall. Astoundingly, even premiums for people in the Obamacare-compliant plans — which, again, economic theory suggests would get stuck with only the very sickest, most expensive Americans — would allegedly decline relative to current law. ... This is garbage, and exactly why we need nonpartisan scorekeepers like the CBO.

Rand Paul Says Senate Health-Care Bill Doesn't Have The Votes --Senator Rand Paul took to the Sunday talk shows again this week to discuss the fate of Senate Health care bill 2.0., and in news that will surprise almost no one who’s been following along, the conservative Kentucky senator said Sunday on Fox and Friends that he doesn't think Senate Majority Leader Mitch McConnell has the votes to pass the healthcare bill in its current form, according to the Hill.Senate Majority Leader Mitch McConnell released a new version of a healthcare plan earlier this week, which, among other things, incorporates demands from Senator Ted Cruz (R-TX) and Senator Mike Lee (R-UT) to allow insurers to sell low-cost, skimpier plans all in an effort to draw conservative support for the new bill.Yet apparently the revisions weren’t enough to win over Paul, one of the senate’s most dedicated conservatives."I don't think right now he does," Paul, a vocal critic of the Senate's healthcare plan, said on "Fox News Sunday." Paul, who said that dozens of Republicans won thanks to their campaigning against Obamacare, again floated the idea of first repealing, and later replacing it. There is significant resistance to that plan among other senators, including Republicans, though the White House has indicated President Trump is open to it."What I've suggested to the president ... if this comes to an impasse, I think if the president jumps into the fray and says 'Look guys, you promised to repeal it, let's just repeal what we can agree to," Paul said."And then we can continue to try to fix, replace or whatever has to happen afterwards," he continued.

New GOP health bill lacks the votes to pass | TheHill: GOP Sens. Jerry Moran (Kan.) and Mike Lee (Utah) announced on Monday night they will not support taking up a bill repealing and replacing ObamaCare, effectively blocking the legislation. Their decision means Republicans in the Senate are well short of having the support to pass their legislation, and raises serious questions about whether President Trump will reach his goal of ending ObamaCare. Moran and Lee both said the bill failed to do enough to lower premiums. "This closed-door process has yielded the [bill], which fails to repeal the Affordable Care Act or address healthcare’s rising costs. For the same reasons I could not support the previous version of this bill, I cannot support this one," Moran said in a statement. He added that the Senate "must now start fresh with an open legislative process," an indication that relatively minor changes to the current bill would not be enough to win his support. It may also indicate he wants hearings on a bill, which were absent from the process on the current measure. Highlighting the challenges faced by Senate Majority Leader Mitch McConnell(R-Ky.), Lee argued the measure is not conservative enough, tugging in the opposite direction from moderates.“In addition to not repealing all of the Obamacare taxes, it doesn’t go far enough in lowering premiums for middle class families; nor does it create enough free space from the most costly Obamacare regulations," the Utah Republican said in a statement. Lee added on Twitter that he and Moran will not support proceeding to "this version" of the Senate GOP legislation, known as the Better Care Reconciliation Act, leaving the door open to additional changes. 

McConnell Abandons Obamacare Repeal and Replace Effort - Senate Majority Leader Mitch McConnell pulled the plug late Monday on the Republican effort to overhaul the U.S. health insurance system and pledged the chamber will now focus on only dismantling the 2010 health care law.“Regretfully, it is now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful,” the Kentucky Republican said.His statement came after GOP Sens. Mike Lee of Utah and Jerry Moran of Kansas said they did not support the latest Senate health care draft and would not vote for a motion to proceed. Lee and Moran joined Rand Paul of Kentucky and Susan Collins of Maine in opposition to the procedural motion, leaving McConnell without the votes needed to move forward on the Senate bill.McConnell said the Senate will now take up the House-passed health care bill and amend it with legislation the Senate supported in 2015 to repeal the 2010 health care law “with a two-year delay to provide for a stable transition period to a patient-centered health care system that gives Americans access to quality, affordable care.” Before McConnell's announcement on the next steps, President Donald Trump tweeted Monday night that “Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!” The dramatic chain of events began after Lee tweeted he and Moran would not support "this version" of the bill. “After conferring with trusted experts regarding the latest version of the Consumer Freedom Amendment, I have decided I cannot support the current version of the Better Care Reconciliation Act,” Lee said in a statement. “In addition to not repealing all of the Obamacare taxes, it doesn’t go far enough in lowering premiums for middle class families; nor does it create enough free space from the most costly Obamacare regulations.”

Republican push to end Obamacare collapses in Senate  (Reuters) - Republican efforts to overhaul or repeal Obamacare collapsed in the U.S. Senate on Tuesday, dealing a sharp setback to President Donald Trump and the Republican Party's seven-year quest to kill former President Barack Obama's signature healthcare law. The disarray in the Republican-controlled Senate rattled financial markets as it cast doubt on the chances of getting Trump's other domestic policy priorities, such as tax reform, through a divided Congress. Trump said he was disappointed by the failure and suggested he might let the insurance markets created under Obamacare go under and then try to work with Democrats on a rescue. "We're probably in that position where we'll just let Obamacare fail," Trump told reporters at the White House. "We will let Obamacare fail, and then the Democrats are going to come to us." U.S. Senate Republican leader Mitch McConnell had announced a vote on a straight repeal of Obamacare, which would take effect in two years, after it became clear on Monday night that he did not have enough support to pass an overhaul of the healthcare law. But the new approach unraveled within hours. Moderate Republican Senators Shelley Moore Capito of West Virginia, Susan Collins of Maine and Lisa Murkowski of Alaska quickly announced they would not back repeal. With Democrats united in opposition, Republicans can only afford to lose two votes to pass the measure in the Senate, where they have a slim 52-48 majority.

McConnell Follows Trump: Calls For ObamaCare 'Repeal & Delay' Vote -- With the tweeted support of President Trump - "Republicans should just REPEAL failing ObamaCare now" - Senate Majority Leader Mitch McConnell has called for a vote to repeal Obamacare with a two-year delay. After two more Republican senators announced their opposition to the Republican health care bill on Monday night, leaving the party leadership short of the required votes to move the legislation forward, President Trump expressed his view clearly...Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in! — Donald J. Trump (@realDonaldTrump) July 18, 2017Despite having said before this was not his preferred path.And as ABC reports, Senate Majority Leader Mitch McConnell has called for a vote to repeal Obamacare with a two-year delay."Regretfully, it is now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful," McConnell said in a statement.McConnell said that "in the coming days," the Senate would vote on "a repeal of Obamacare with a two-year delay to provide for a stable transition period to a patient-centered health care system that gives Americans access to quality, affordable care." The lack of support from within his own party left the majority leader with few options to make good on what has been a top Republican priority since the law was passed in 2010.

Still Not a Win and Just a Delay - The biggest lie coming out of the Senate today: “’One of the major problems with Obamacare was that it was written on a strict party-line basis and driven through Congress without a single Republican vote,’ McCain said. He added that Congress must now ‘hold hearings, receive input from members of both parties, and heed the recommendations of our nation’s governors.’”  Lets not forget, the Republicans have until EOM September to pass a bill under Reconciliation to change the ACA. October 1 is a new budget year and the Republicans will have to decide whether to change those parts of the ACA using Reconciliation or pass Tax Reform using Reconciliation. They can not do two Reconciliations in one budget year. One or the other will have to wait.  Besides blocking the Risk Corridor Program which caused much of the premium increase since 2015, insurance companies to lose money and withdraw from healthcare exchanges, and Coops to go bankrupt; President Trump has threatened to withhold CSR subsidies for out-of pocket expenses to those 100% – 250% FPL with Silver Plans. This subsidy goes directly to insurance companies. Withholding it will cause premiums again to increase and more companies to withdraw from the exchanges. The second biggest lie coming out of Congress comes from a Congressman who relied on SS benefits to put him through college and who hopes to deny healthcare to his constituents and others as well.“’The Senate’s got to pass a bill for us to even move the process forward,’ Congressman Ryan said. ‘That’s the next step. So, we’re hoping that they can achieve that next step so that we can bring real relief.’” This is what Trump means by making the ACA fail or worst than what has occurred to date with Republican meddling in it.

A Quick Post Mortem on the Better Health Care Reconciliation Act (BCRA) naked capitalism by Lambert Strether - As readers know by now, the Senate Republican health care bill, the BCRA, went down to defeat last night as Senators Mike Lee (UT) and Jerry Moran (KS) simultaneously defected as firm “No” votes. In this brief post, I’ll do three things: Briefly document the defeat, briefly describe what could be coming next, and do a modest happy dance on method (developed in this post, here). After Paul Ryan’s AHCA debacle, McConnell took point in the Senate by rewriting the bill. But here’s Politico on McConnell’s defeat: (The Financial Times also points the blame cannons at Trump: “Trump suffers stinging defeat as Obamacare overhaul collapses.” Such an account is at best incomplete; recall that major right wing forces weren’t threatening defectors with “outside money”; and that major donors like hospitals and the insurance companies came out against the bill.) More from Politico:President Donald Trump convened a strategy session over steak and succotash at the White House with senators Monday night, trying to plot an uphill path to repealing Obamacare and replacing it with a GOP alternative.He made an impassioned pitch on why Republicans needed to do it now — and the political peril they could face if they didn’t “repeal and replace” after promising to do it for years. He also vented about Democrats and the legislative process. “He basically said, if we don’t do this, we’re in trouble,” said one person briefed on the meeting. “That we have the Senate, House and White House, and we have to do it or we’re going to look terrible.”And it does look terrible! Meanwhile, two senators [Moran and Lee] — neither invited to the dinner — were simultaneously drafting statements saying that they couldn’t support the current Senate health care bill. They released the statements just after Trump’s White House meal concluded. Trump has privately wondered why legislators don’t seem to listen to him, and the blow from Moran and Lee illustrated the limits of the president’s capacity to master the art of the Washington deal. Well, not to defend Trump — if I were a Senator, I wouldn’t listen to him either — but if a deal is not there to be had, there’s no blame to affix for not making it. And with the BCRA, my view is that what Yves calls a “solution space” did not exist. McConnell’s bill was crafted to appeal to the rich (taxes), youth (lower rates), and swing states (in the Rust Belt), plus whatever goodies McConnell could dole out. That wasn’t enough to overcome local and particular reasons for Senators to defect.

Medicaid shows its political clout - Medicaid may be the next “third rail” in American politics. Resistance to cutting the health care program for the poor has emerged as a big stumbling block to Obamacare repeal, and Republicans touch it at their political peril. “If they’d gone ahead ... clearly I would think we’d be seeing a transfer of power in a year and a half,” said John Weaver, a GOP strategist for Ohio Gov. John Kasich, who has called the Medicaid overhaul proposals of his fellow Republicans “unacceptable.” ..The repeal efforts in Congress actually aimed to do more than repeal Obamacare. The House-passed bill, H.R. 1628 (115), and the Senate counterpart that collapsed Monday called for the biggest changes and deepest cuts to Medicaid since its creation as part of the Great Society programs in 1965. But an overhaul that would cut nearly $800 billion over a decade and have 15 million fewer people covered in Medicaid went too far for moderates like Susan Collins (R-Maine) and Shelley Moore Capito (R-W.Va.) and created a backlash from several influential Republican governors. “You can’t just over a very short period of time diminish the federal support level,” said Arkansas Gov. Asa Hutchinson, one of several Republicans who saw the Medicaid cuts as excessive. “That’s just an unrealistic goal in the short term.” That's made the politics around Medicaid much more volatile. Republican strategists and pollsters say Medicaid’s rising stock will likely diminish the GOP’s chances to cap federal funds without huge blowback from voters. Even Senate Majority Leader Mitch McConnell’s fallback, a partial repeal bill which scraps Obamacare Medicaid expansion but leaves traditional Medicaid intact, encountered fatal opposition Tuesday, and it's not clear what comes next. 

John Kasich: The Way Forward on Health Care – NYT oped— Washington’s approach to health care over the past decade is yet another example of our lawmakers’ increasing distance from the rest of America. First one party rams through a rigid, convoluted plan that drives up costs though unsustainable mechanisms that are now unraveling. Then the other party pursues fixes that go too far the other way — and again ignores ideas from the other side. Neither extreme is cutting it, and the quick opposition that doomed the Senate plan reflects how unacceptable its ideas are to so many. The American people want and deserve reasonable, balanced, sustainable health care so that they can live without the fear of bankruptcy if they get sick, our most vulnerable neighbors are treated with compassion and those who seek to improve their lives can get healthy, confront addiction and get work.  Despite weeks of hard effort, the Senate plan was rejected by governors in both parties because of its unsustainable reductions to Medicaid. Cutting these funds without giving states the flexibility to innovate and manage those cuts is a serious blow to states’ fiscal health at a time when most — Ohio included — are feeling headwinds from a softening national economy. And, unlike the federal government, states must balance their budgets. Particularly problematic was the bill’s failure to adequately meet addiction and mental health needs — which often occur together. Diverting funds away from the comprehensive, integrated physical and mental health care that is proving effective is a step backward. The Senate plan also failed to repair Obamacare’s damage to the insurance markets. Insufficient tax credits would make coverage unaffordable for many lower income Americans: Two of the subsidies in the bill would be temporary and a third would likely be unsustainably underfunded. Congress should avoid doing anything likely to cause further instability in the huge and complex private insurance market. In the uncertainty created by the Senate plan’s collapse, Congress should guard against a hasty next step. Just taking up the fatally flawed House plan is not an answer, and this idea should be immediately rejected for the same reasons senators rejected the Senate’s own proposal. Also, simply repealing Obamacare without having a workable replacement is just as bad. Both would simply yank health coverage out from under millions of Americans who have no other alternative.

Trump threatens to gut Obamacare markets - POLITICO: Donald Trump holds a fuse in his hands — and he could decide to light it and blow up Obamacare insurance markets as soon as Thursday. That’s the deadline for sending out the next monthly Affordable Care Act subsidies to health plans to defray the cost of care for individuals with low incomes. The president has toyed for months with the idea of stopping the payments to force Democrats to the negotiating table to avoid the prospect of millions of vulnerable Americans losing access to health coverage.Trump has repeatedly told aides and advisers that he wants to end the subsidy payments, and he has not changed his position, according to several people who have spoken with him. “Why are we making these payments?” Trump has asked. With Senate Republicans’ Obamacare repeal effort in shambles and GOP leaders lacking the votes to bring a bill to the floor, Trump could finally follow through in a bid to regain the upper hand. “My advice to the plans this morning was, ‘If you get it, cash the check quickly,’” one health care lobbyist who represents insurers said Tuesday. Two White House officials said a final decision on the subsidies had not been made. One person said various aides and advisers had issued conflicting opinions in recent days. Asked whether Trump would actually pull the plug, a different administration official said this time is “different” — and that administration officials had begun looking at how they would end the payments. “But no decision has been made,” the official said. Immediately halting the subsidies — estimated to be $7 billion this year — would likely tip the already shaky Obamacare markets into chaos. Insurers already are queasy about the uncertainty roiling the marketplaces as the 2018 open enrollment season approaches. 

Trump scolds U.S. Republicans on healthcare; CBO sees 32 million uninsured (Reuters) - U.S. President Donald Trump took Senate Republicans to task on Wednesday for failing to reach agreement on overhauling Obamacare, as a new report showed 32 million Americans would lose health insurance if senators opt to repeal the law without a replacement. Trump gathered 49 Republican senators on Wednesday for a White House lunch after a bill to repeal and replace the 2010 Affordable Care Act collapsed on Monday after dissent from a handful of the party's conservatives and moderates. After Trump's exhortation, party members met on Capitol Hill with Vice President Mike Pence to try to come together on a major Republican campaign promise for the past seven years - undoing former Democratic President Barack Obama's signature legislation, popularly known as Obamacare. Thirty-two million Americans would lose their health insurance by 2026 if Obamacare is scrapped without an alternative in place, the nonpartisan Congressional Budget Office reported on Wednesday, while 17 million would become uninsured next year alone. At the same time, premiums on individual insurance plans would rise 25 percent next year and double by 2026. The CBO's estimates were unchanged from a previous report that assessed the impact of a 2015 bill to repeal Obamacare that passed the House of Representatives and Senate and was vetoed by Obama.

John McCain diagnosed with brain cancer - Sen. John McCain, Arizona Republican, has been diagnosed with brain cancer, according to a Mayo Clinic statement released Wednesday evening by his office. According to the Mayo Clinic, the cancer was discovered after some surgery last week to remove a blood clot above his left eye. “Subsequent tissue pathology revealed that a primary brain tumor known as a glioblastoma was associated with the blood clot,” the Clinic said. “The Senator and his family are reviewing further treatment options with the Mayo Clinic care team. Treatment options may include a combination of chemotherapy and radiation,” the world-renowned hospital said. The 80-year-old senator’s blood clot had been the latest health issue for the former Vietnam war POW, though the Clinic said the senator’s overall health is fine and he is “recovering from his surgery amazingly well.”

Tensions reach new high between Trump, GOP | TheHill: Tensions are bubbling over between President Trump and Senate Republicans. White House officials are blaming Senate Majority Leader Mitch McConnell (R-Ky.) for getting stuffed at the goal line on ObamaCare repeal-and-replace legislation, while GOP senators say Trump failed to provide any meaningful political momentum for the prized measure. “He was of no help,” grumbled one GOP senator, who doubted that Trump would have done much to defend lawmakers from political attacks if the bill passed.A member of Trump’s team says their boss bears no responsibility for the embarrassing loss because McConnell was in charge of putting together a Senate package. “This was McConnell’s deal,” said a White House official when asked what went wrong. After McConnell conceded Monday night that he did not have enough votes to pass the Senate version of the healthcare bill, he suffered another defeat Tuesday when GOP colleagues quickly smacked down his backup plan: pass the ObamaCare repeal-only bill that cleared the Senate and House in 2015. But a senior Senate Republican aide bristled at the notion that McConnell fumbled the ball. “Repeal-only is what Leader McConnell wanted to do in January. The president wanted to do repeal and replace,” the aide said.  Trump, however, put pressure on Congress to keep ObamaCare’s most popular provisions: protections for people with pre-existing medical conditions and the ability of young adults to stay on their parents’ health insurance until age 26. 

Trump to GOP senators: Cancel your recess | TheHill: President Trump told GOP senators at the White House on Wednesday that they should cancel their August recess and not leave town until acting to repeal ObamaCare. "We shouldn't leave town until this is complete," he said during a lunch at the White House. "We should hammer this out and get it done." Trump also said that repeal isn't enough, and that Republicans should also replace ObamaCare with new legislation. "We can repeal, but we should repeal and replace,” he said. "Frankly I don’t think we should leave town unless we have a health insurance plan, unless we can give people great health care," he continued. "Because we’re close. We’re very close.’’ The president challenged the GOP senators, saying that anyone who votes against beginning debate on the legislation is saying “you are fine with ObamaCare." Trump’s opening remarks at the luncheon were open to the press and quickly broadcast on cable television. The president took a scolding tone at times during his remarks, urging GOP lawmakers to keep their campaign promises. But the public tongue-lashing from Trump might not be well received by Republican senators, many of whom believe he has failed to master the details of the healthcare proposal and did little to sell it. 

Republicans meet late into night as Trump demands new healthcare plan (Reuters) - Republicans struggling to agree on healthcare legislation to overhaul Obamacare obeyed U.S. President Donald Trump's orders to try to swiftly reach a deal but were unable to resolve their differences in a long, late-night meeting. Earlier on Wednesday, Trump took Senate Republicans to task for failing to agree on how to dismantle Obamacare, as a new report showed 32 million Americans would lose health insurance if senators opt to repeal the law without a replacement. Trump gathered 49 Republican senators for a White House lunch after a bill to repeal and replace the 2010 Affordable Care Act collapsed on Monday amid dissent from a handful of the party's conservatives and moderates. After Trump's exhortation to keep trying, party members met with Health and Human Services Secretary Tom Price behind closed doors on Wednesday night to try to finally come together on a major Republican promise of the past seven years - undoing former Democratic President Barack Obama's signature legislation, popularly known as Obamacare. There was no immediate breakthrough. "We still have some issues that divide us," said Senator Ted Cruz, a conservative who has proposed letting insurers offer cheaper bare-bones plans that do not comply with Obamacare regulations. Republicans attending the late meeting sent their staff away in order to talk frankly and Senator John Kennedy said everyone was negotiating in good faith but he added he did not know if they would reach agreement. Almost all the other senators rushed off after the meeting without comment.

H.R. 1628, Obamacare Repeal Reconciliation Act of 2017 - CBO - CBO and the staff of the Joint Committee on Taxation (JCT) have completed an estimate of the direct spending and revenue effects of the Obamacare Repeal Reconciliation Act of 2017, an amendment in the nature of a substitute to H.R. 1628, which would repeal many provisions of the Affordable Care Act (ACA). According to the agencies’ analysis, enacting the legislation would decrease deficits by $473 billion over the 2017-2026 period (see figure below). CBO and JCT estimate that enacting the legislation would affect insurance coverage and premiums primarily in these ways:

  • The number of people who are uninsured would increase by 17 million in 2018, compared with the number under current law. That number would increase to 27 million in 2020, after the elimination of the ACA’s expansion of eligibility for Medicaid and the elimination of subsidies for insurance purchased through the marketplaces established by the ACA, and then to 32 million in 2026.
  • Average premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by roughly 25 percent—relative to projections under current law—in 2018. The increase would reach about 50 percent in 2020, and premiums would about double by 2026.

In CBO and JCT’s estimation, under this legislation, about half of the nation’s population would live in areas having no insurer participating in the nongroup market in 2020 because of downward pressure on enrollment and upward pressure on premiums. That share would continue to increase, extending to about three-quarters of the population by 2026.

In Fallout Over Health Care Collapse, It’s GOP vs. GOP  — GOP infighting intensified Wednesday as conservative leaders vowed to punish "traitorous" Republicans for abandoning promises on health care and activists lined up to run against the party's own congressmen across the nation. In Colorado, conservative challenger Darryl Glenn lamented six-term Republican Rep. Doug Lamborn's vote for a health care repeal measure he said didn't go far enough. "The fact that you run on repeal and replace, and then you don't deliver? It's more about political cover and staying in power than solving problems," said Glenn, one of at least two Republicans already challenging Lamborn in the conservative district. From Washington to Texas to Colorado, Tuesday's shock and frustration turned to fear and anger as the gravity of the GOP-controlled Senate's latest failure to vote on a health care measure took hold. Leading Republicans warned of dire political consequences in next year's midterm elections should their party fail to fulfill their years-long promise to repeal President Barack Obama's health care law. "This is a vote a whole election can turn on," said Ken Cuccinelli, who leads the Senate Conservatives Fund. 

After healthcare failure, Republicans face similar divisions on tax reform (Reuters) - Republicans in Congress unveiled a fiscal 2018 budget plan as a first step to major U.S. tax reform on Tuesday, only to face the same divisions between conservatives and moderates that helped killed their efforts to replace Obamacare. The $4 trillion spending blueprint, released by the House of Representatives budget committee, could become a new flashpoint for Republican in-fighting because it links future tax cuts for businesses and individuals with $203 billion in mandatory spending cuts that would reduce benefits for the poor. The Republican push to repeal and replace the Affordable Care Act, widely known as Obamacare, collapsed in the Senate late on Monday after a tug-of-war between party moderates who wanted to preserve healthcare benefits for lower-income Americans and conservatives who wanted to scale them back. On Tuesday, House Republicans disagreed over the budget proposal in terms that could foreshadow a replay of the Senate healthcare debacle when lawmakers turn to tax reform. Representative Mark Meadows, chairman of the conservative House Freedom Caucus, said the budget measure would not get enough conservative votes to pass the House without bigger cuts to programs that the government is required to fund by law. "It's still short of what it needs," Meadows told reporters. On the other side, Representative Charlie Dent, a leader of the moderate Tuesday Group, called for an agreement with Democrats to establish higher spending levels for discretionary programs. "If we move too much in the mandatory area, then it will make tax reform that much more difficult to get. It's that basic," Dent told Reuters.

As Trump Waits, Republicans Fail To Reach Healthcare Deal In Late-Night Session -- Republicans were unable to resolve existing differences about the healthcare bill after a Wednesday late-night meeting which ended with no deal, despite President Donald Trump’s demands that they keep trying. Party members also met with Health and Human Services Secretary Tom Price behind closed doors on Wednesday night to try to reach an agreement on a plan to undo former Democratic President Barack Obama's signature legislation, popularly known as Obamacare, according to Reuters. The meetings were part of an abrupt shift in strategy by Trump, who is threatening to keep lawmakers in Washington during their August recess if they don’t reach an agreement on health care after the CBO said a straight repeal of Obamacare would increase the number of uninsured by 32 million by 2026, while doubling insurance premiums in 10 years (it was unclear how much higher premiums would rise if Obamacare remains). Additionally, the CBO predicts that the bill would increase insurance premiums, with the average premium increasing by about 25% in 2018 alone. Previously, Trump said he was ready to “let Obamacare fail” and then work with Democrats on a new system after the old one collapses.

CBO Says Senate Health Bill Would Boost Uninsured by 22 Million --The Senate Republican health bill promises lower premiums for consumers. To get there, it would require patients in standard plans to spend as much as about $13,000 upfront on their own care. The deductibles would be so high, in fact, that they’d violate maximums set in U.S. law, an analysis by the nonpartisan Congressional Budget Office said Thursday. Under Obamacare, by comparison, an individual in a standard plan would have a deductible of roughly $5,000. The analysis shines new light on a cost issue that’s gone less noticed amid the debate over health insurance premiums, and could unnerve some moderate GOP senators, Larry Levitt, a senior vice president at the Kaiser Family Foundation, said. “Many of the moderates have talked about wanting to be assured that the bill really does provide adequate coverage to people, and deductibles are a part of that,” he said. “There have been so many promises from the president and others that this bill would lead to lower deductibles and, in fact, it would do just the opposite.” It’s the latest misfire for the Republican health insurance proposal, which was written largely behind closed doors and without much consultation from patients, doctors or insurers. Broadly, the latest Senate plan is similar to the previous one. It would increase the number of uninsured Americans by 22 million in a decade, a number that still presents a political obstacle to Majority Leader Mitch McConnell’s efforts to shore up support. Republican leaders have said they want to start floor debate on a health bill next week, though they have struggled to find the votes within their party. It will take at least 50 senators voting “yes” to start debate, and several conservative and moderate Republicans have expressed doubts over everything from the content of the various proposals to the manner in which GOP leaders have drafted them. 

CBO Says McConnell Healthcare Bill Would Slash Deficits By $420 Billion, Leave 15 Million Uninsured -Another day, another CBO score for another version of the GOP's healthcare bill. This time, the agency estimates that McConnell's "Better Care Reconciliation Act" legislation would lower the federal budget deficit by $420 billion over the next 10 years by reducing spending for Medicaid and subsidies for nongroup health insurance.As The CBO notes, those effects would be partially offset by the effects of provisions not directly related to health insurance coverage (mainly reductions in taxes), the repeal of penalties on employers that do not offer insurance and on people who do not purchase insurance, and spending to reduce premiums and for other purposes.Compared with the June 26 cost estimate for a previous version of the legislation, this cost estimate shows savings over the next 10 years that are larger - as well as estimated effects on health insurance coverage and on premiums for health insurance that are similar. The current version of the legislation would result in greater deficit reduction mostly because it would retain certain taxes that the previous version of the legislation would have eliminated. The description of the legislation and of CBO and JCT’s methodology and results that appeared in the agencies’ previous estimate largely applies to this one as well.

Republicans’ Push to Overturn Health Law Is Back From the Dead — The Republican health care push was declared dead Wednesday morning. By afternoon it had a breath of life. Legislation in Washington can assume Frankenstein-like qualities.On the cusp of a humiliating and politically disastrous defeat, President Trump and the Senate majority leader, Mitch McConnell, took extraordinary resuscitative measures on Wednesday to pump oxygen back into their badly fading effort to overturn the Affordable Care Act. They somehow managed to stave off its imminent demise.It may be only a temporary reprieve, but a fight that seemed finished just hours earlier was renewed and headed for a pivotal vote next week.With his reputation for being a master of the Senate at grave risk, Mr. McConnell, a Kentucky Republican, extended a new offer to wavering Senate colleagues leery of scrapping the health care law. He backed away from his earlier insistence that the Senate focus on a plan to repeal much of the existing Obama-era law and allow a two-year window for its replacement — an iffy proposition given the difficulties that Republicans are currently having coming up with a consensus health care policy.Instead, his new selling point was that senators should simply vote next week on a motion to open a rollicking health care floor debate and then let the amendment chips fall where they may — a case of creating national health care policy, which makes up about 20 percent of the United States economy, on the fly.“What I’m telling you is no harm is done by getting on the bill,” Mr. McConnell told reporters outside the White House after a lunch where Mr. Trump hosted most Senate Republicans. “Wide open for amendment.”“There’s no way that I, or anybody else, could prevent members from having amendments that any 51 of us can pass and change the bill,” he said by way of encouragement. “But we cannot have a debate until we get on the bill.”

GOP leaders plan Tuesday health vote, it’s an uphill climb   (AP) — Republican leaders pushed toward a Senate vote next Tuesday on resurrecting their nearly flat-lined health care bill. Their uphill drive was further complicated by the ailing GOP Sen. John McCain's potential absence and a dreary report envisioning that the number of uninsured Americans would soar. The White House and GOP leaders fished Thursday for ways to win over recalcitrant senators, including an administration proposal to let states use Medicaid funds to help people buy their own private health insurance. But there were no indications they'd ensured the votes needed to even start debating the party's legislative keystone, a bill scuttling and supplanting President Barack Obama's health care law."Dealing with this issue is what's right for the country," said Majority Leader Mitch McConnell, R-Ky. He added, "It was certainly never going to be easy, but we've come a long way and I look forward to continuing our work together to finally bring relief." As leaders tested revisions that might attract GOP votes, others began comparing the process with the trade-offs they scorned seven years ago as top Democrats pushed Obama's overhaul. "It's almost becoming a bidding process — let's throw $50 billion here, let's throw $100 billion there," said Sen. Bob Corker, R-Tenn. "It's making me uncomfortable right now. It's beginning to feel a lot like how Obamacare came together." In a blow, the Congressional Budget Office said McConnell's latest bill would produce 22 million additional uninsured people by 2026 and drive up premiums for many older Americans. Congress' nonpartisan fiscal analyst also said it would boost typical deductibles — the money people must pay before insurers cover costs — for single people to $13,000 that year, well above the $5,000 they'd be expected to pay under Obama's statute. 

Senate Republicans complain of chaos in healthcare effort (Reuters) - U.S. Senate Republicans, scolded by President Donald Trump for failing to overturn Obamacare, tried to salvage their seven-year effort for a new healthcare law on Thursday, but leading senators indicated frustration over shifting goal posts. Trump on Wednesday told the Senate's fractured Republican majority to revive a bill to repeal and replace Obamacare that collapsed on Monday after Republicans from both moderate and conservative factions pulled their support. But after a late-night emergency meeting on how to win over holdouts appeared to yield no progress, senators expressed irritation. "It really is starting to feel like a bazaar, $50 billion here, $100 billion there, and I feel like it’s losing coherency," Senator Bob Corker said. Susan Collins, a moderate Republican who strongly objected to the revised bill, said she didn't "even know what we are proceeding to next week" and said Trump had contributed to the "lack of clarity" over the next steps. "I’m unclear, having heard the president and read his tweets, exactly which bill he wants to pass and whether he is for just repealing, or repealing and replacing - whether he’s for the Senate bill," Collins said. Trump, who had campaigned heavily on a promise to repeal and replace Obamacare, the signature legislative achievement of former Democratic President Barack Obama, took a hands-off approach to the healthcare debate last week.On Tuesday he suggested that he was fine with letting Obamacare fail. But on Wednesday he switched course and demanded that senators stay in Washington through their planned August recess until they find common ground on healthcare. 

Key Trumpcare Holdout Says He’s A Yes If Guaranteed A Vote On His Amendment -- For months, Sen. Rand Paul (R-KY) has been a staunch critic of Senate Republicans’ replacement for the Affordable Care Act, publicly blasting it as “Obamacare-lite” because it leaves many of the law’s taxes and some of its regulations in place and allocates billions of dollars for insurance market stabilization that he derides as a “bailout.” Paul has blocked previous iterations of the bill from ever seeing debate on the Senate floor, and was generally considered an un-winnable vote. But on Thursday, he said he would relent and support a motion to proceed—if GOP leaders guaranteed him a vote on an amendment that would swap in the 2015 Obamacare repeal bill.Despite widespread reluctance from both moderate and hardline GOP senators, with Paul on board the bill is much more likely to come to the floor next week.“If they want my vote, they have to at least agree that we’re going to at least vote on clean repeal,” he told reporters Thursday afternoon, adding that he will not be satisfied if the option is voted on late in the debate process. “There’s a difference between saying you can offer it at three in the morning on the fourth day, versus up front we have a vote on clean repeal, maybe BCRA, maybe Collins-Cassidy. I want equal billing, up front with other choices.” Asked whether he would need his “clean repeal” amendment to be voted on first in order to agree to voting to start debate, Paul essentially suggested senators draw out of a hat.   “Let’s do a random selection,” he said. “Let’s have three or four of them, put them in random order on the first day, with equal billing. That’s a compromise and I’m willing to get on the bill.”

McCain illness deprives Senate of crucial vote, Trump critic (Reuters) - If John McCain's illness requires a long absence from the U.S. Senate, his colleagues will be deprived of a dealmaker and leading voice on national security, while America's allies will lose one of the few Republican critics of President Donald Trump's foreign policy. The 80-year-old lawmaker and 2008 Republican presidential nominee, who was elected to a sixth Senate term last November, has been diagnosed with an aggressive form of brain cancer. He is vowing a quick return to the Senate. McCain, a former U.S. Navy pilot who spent 5-1/2 years as a prisoner of war in Vietnam, is outspoken on a range of issues, from defense spending to immigration to demanding a thorough investigation of alleged Russian meddling in the 2016 U.S. election. Asked how the Senate was different without McCain, his close friend Senator Lindsey Graham said: "It's quieter. John is a fighter and John's into every cause no matter how hard it might be." A Russia hawk, McCain has expressed deep skepticism of Trump's effort to improve ties with Moscow, and emerged, with Graham, as perhaps the most vocal Republican critic in Congress of the president's foreign policy. He chairs the influential Senate Armed Services Committee. McCain has traveled the globe on trips some analysts say are efforts to soothe the concerns of U.S. allies that fear Trump's "America First" policy means a retreat from international engagement.

Feds Concede Can’t Search Cloud Data at Border for US Citizens -- naked capitalism by Jerri-lynn Scofield -  NBC News reported last week that Customs and Border Protection (CBP) concedes it lacks authority to access data stored only on the cloud when its agents examine the electronic devices of US citizens crossing the border. The NBC news report, Border Patrol Says It’s Barred From Searching Cloud Data on Phones, was based on a CBP Letter, dated June 20, sent in response to written questions posed to CBP acting commissioner Kevin McAleenan by Senator Ron Wyden. Last April, Wyden and Senator Ron Paul introduced the Protecting Data at the Border Act that require border officials get a warrant based on probable cause before they could to search or seize cellphones at the border. McAleenan provided the answers in advance of his confirmation hearing, according to this article in The Verge, US Customs says it can’t search cloud data at the border. The money quote from the CBP letter: CBP’s authority to conduct border searches extends to all merchandise entering or departing the United States, including information that is physically resident on an electronic device transported by an international traveler. Therefore, border searches conducted by CBP do not extend to information that is located solely on remote servers. I appreciate the opportunity to offer that clarification.  The letter added: In conducting a border search, CBP does not access information found only on remote servers through an electronic device presented for examination, regardless of whether those servers are located abroad or domestically. Instead, border searches of electronic devices apply to information that is physically resident on the device during a CBP inspection

Republican States Want the Trump White House to Stop Protecting Dreamers -- Late last month, the Republican attorneys general from ten states (along with a governor) issued a threat to the Trump Administration. Unless the President dismantled an Obama-era program called Deferred Action for Childhood Arrivals, or DACA, which established “lawful presence” for undocumented immigrants who came to the U.S. as children, they would file a federal lawsuit against the program and attempt to dismantle it themselves. In a letter to Attorney General Jeff Sessions announcing their intentions, the officials touted their credentials as “the state plaintiffs that successfully challenged the Obama Administration.” They were referring to their success in convincing a federal court, in 2014, to block an expanded version of DACA aimed at protecting the parents of DACA recipients. At the time, challenging DACA itself—a broadly popular program designed for young people who grew up as Americans—was politically risky, even in deep-red states. But with a new Administration in the White House, these officials are emboldened. Earlier this week, John Kelly, the Secretary of the Department of Homeland Security, met with twenty members of the Congressional Hispanic Caucus in Washington. What was said in the room became bigger news in immigrant communities across the country than the latest revelations of the Trump campaign’s contact with Russians. Kelly told the lawmakers that D.H.S. lawyers didn’t think DACA would withstand a legal challenge, and that, if the state officials made good on their promise to sue, the Administration might not defend DACA in court. Still, Kelly said, he had discretion as the head of D.H.S. to determine whom immigration agents should prioritize for deportation; DACA recipients, he said, “fall into the category of people who should stay in the U.S.” Just a few weeks earlier, Kelly had announced that the Administration planned to leave DACA intact. Now, the lawmakers worried that the Administration was trying to have it both ways:

US Launching Sunday Raids To Arrest Illegal Immigrant Gang Members --With Trump desperate for a distraction from the daily Russian collusion media onslaught, and perhaps under the advice of his brand new counsel, Reuters reports that U.S. immigration agents are set to launch nationwide raids next week to arrest teenagers who entered the country without guardians and are suspected gang members, as part of President Donald Trump's crackdown on illegal immigrants. The raids, targeting teenagers 16 and 17-years-old, will begin on Sunday and continue through Wednesday. Trump, who campaigned on the promise of tough immigration enforcement, has made deporting gang members, especially those belonging to the El Salvador-based Mara Salvatrucha, or MS-13, a top priority.   "You have a gang called MS-13. They don't like to shoot people. They like to cut people. They do things that nobody can believe," Trump said at a rally in Cedar Rapids, Iowa last month. In a May speech, the president promised the gang would be "gone from our streets very soon, believe me."And while the crackdown was to be expected as part of Trump's previously stated intentions, where the administration will promptly get in trouble with civil rights defenders, are the selection criteria to decide who is and isn't an alleged gang member : according to Reuters, the U.S. Immigration and Customs Enforcement "said in a statement that a person can be identified as a gang member if they meet two or more criteria, including having gang tattoos, frequenting an area notorious for gangs and wearing gang apparel."As such, the raids represent a departure from practices during the O bama presidency, when minors could be targeted for deportation if they had been convicted of crimes, but were not arrested simply for suspected gang activity or membership. This time mere suspicion -i.e. gang tattoos and apparel -  will be sufficient "probable cause."

-2B visas and labor shortages: Latest data do not justify a cap increase – EPI - The H-2B visa program is a guestworker program that allows employers to temporarily hire migrant workers in low-wage nonagricultural occupations, such as landscaping, forestry, hospitality, construction, and seafood processing, when no U.S. workers are available. (Table 1 below shows the top 10 H-2B occupations in fiscal 2016, according to labor certification disclosure data from the government.) Since May 2017, the U.S. Department of Homeland Security (DHS), in consultation with the U.S. Department of Labor (DOL), had been considering temporarily increasing the annual numerical limit of visas that can be issued to new workers (commonly referred to as the “cap”) through the H-2B visa program, which is currently set at 66,000.There are a number of reasons why the H-2B program should not be expanded. There are numerous cases of litigation, reports in the media, and government audits documenting how migrants employed through the H-2B program are often exploited and robbed by employers, and even become victims of human trafficking.2 While these most-egregious examples are clear legal violations, much of the abuse and discrimination in the H-2B program is perfectly legal because employers have been allowed to underpay H-2B workers for years thanks to loopholes in wage regulations (Costa 2016b, 2017a). And because U.S. workers are forced to compete with vulnerable H-2B workers, wages and working conditions for all workers in major H-2B occupations are degraded. As a result, there’s no question that the H-2B program needs major reforms to protect both migrant and American workers—but any push to expand H-2B should be made through the regular legislative process and after a full debate in Congress, so that members are accountable for their votes—not as a fly-by-night provision on a must-pass spending bill that has no identifiable author. In essence, expanding the program with no reform to improve worker protections will allow unscrupulous employers to carve out an even larger rights-free zone in the low-wage labor market that will drag on wage growth.

As Media Focuses on Russia Collusion, Trump Is Quietly Stacking the Labor Board with Union Busters -- It might not get as much press coverage as other Donald Trump administration calamities, but the U.S. president is set to appoint a known union buster to the National Labor Relations Board (NLRB), push the body to a Republican majority and reverse Obama-era protections that rankle Big Business.On July 13, the Senate Health, Education, Labor and Pensions (HELP) Committee held hearings on Trump’s two NLRB selections and his deputy labor secretary pick. All three of these men are expected to be confirmed.William Emanuel, one of Trump’s NLRB appointees, is a management-side attorney and a member of the conservative Federalist Society. He is also a shareholder of Littler Mendelson, an infamous union busting firm that was most recently brought in by Long Island beer distributor Clare Rose to negotiate a contract full of pay cuts.After being selected, Emanuel disclosed 49 former clients and declared he would recuse himself for up to a year if any of the companies found themselves in front of the NLRB. The list included multiple businesses that have clashed with the labor board, including JPMorgan Chase Bank, MasTec Inc, Nissan and Uber. 

Trump expected to make Scaramucci communications director - President Trump is expected to announce that Wall Street financier Anthony Scaramucci will be White House communications director, according to two sources familiar with the planning. Trump has left the role open since Mike Dubke resigned in May, and the President has vented frequently to his friends about the performance of his press operation. Trump's plans to appoint Scaramucci came as a surprise to Chief of Staff Reince Priebus, who found out after the plans had already been made.  "Mooch," as he's known to friends, is a major Republican donor who supported Trump during the general election campaign — after fundraising during the primaries for Scott Walker and Jeb Bush. He frequently appears on Fox News and is a longtime friend of Sean Hannity. Scaramucci recently sold his stake in his hedge fund, SkyBridge Capital, but was left stranded after an initially planned job in the White House didn't materialize. Scaramucci is currently working at the Export-Import Bank but he's expected to leave that administration post to take the communications director job. Spicer has been handling the communications director's duties since Dubke left. The President has frequently disparaged Spicer's performance to friends and associates, but he does that with many of his staff. He also says Spicer is a "nice guy," who gets unfairly beaten up by the press. Spicer is expected to stay on, though it's unclear how his responsibilities will fit alongside Scaramucci's. 

Sean Spicer Resigns as White House Press Secretary -— Sean Spicer, the White House press secretary, resigned on Friday after denouncing chaos in the West Wing and telling President Trump he vehemently disagreed with the appointment of the New York financier Anthony Scaramucci as communications director.After offering Mr. Scaramucci the communications job Friday morning, Mr. Trump asked Mr. Spicer to stay on as press secretary. But Mr. Spicer told Mr. Trump that he believed the appointment of Mr. Scaramucci was a major mistake and said he was resigning, according to a person with direct knowledge of the exchange.In one of his first official acts, Mr. Scaramucci, who founded the global investment firm SkyBridge Capital and is a Fox News contributor, joined Sarah Huckabee Sanders, Mr. Spicer’s chief deputy, in the White House briefing room and announced that she would succeed Mr. Spicer as press secretary.He said he had great respect for Mr. Spicer, adding, “I hope he goes on to make a tremendous amount of money.” But he acknowledged the awkwardness of Mr. Spicer’s resignation. “This is obviously a difficult situation to be in,” Mr. Scaramucci said. Ms. Sanders said Mr. Trump was grateful for Mr. Spicer’s service and that the president believes Mr. Spicer will succeed going forward. “Just look at his great television ratings,” Mr. Trump said in a statement read by Ms. Sanders.

States bristled but at least 30 will give personal voter data to Trump - Despite criticism from most states about the Trump administration’s request for voters’ personal information, half have said they will deliver some or all of that data to the White House election commission.And that number could grow, President Donald Trump said on Wednesday, with more than 30 states turning over some information, including names, addresses and birth dates, to the group being run by Kansas Secretary of State Kris Kobach.“If any state does not want to share this information, one has to wonder what they’re worried about,” Trump said, questioning the motives of states that have not complied with requests for information. “ What are they worried about? There’s something. There always is.”Trump created the elections commission after claiming — without evidence — that millions of people had voted illegally and deprived him of a popular-vote victory. He has argued specifically that fraud denied him a win in three states: California, New Hampshire and Virginia. Independent groups and election officials said there was no evidence of either charge, but Kobach said Wednesday that the public would never know the true results of the election.Kobach and other members acknowledged that they intend to compare the data collected from states against each other as well as federal databases for felons, undiscovered noncitizens and people who vote in more than one state.“If you don’t have the voter rolls, you really can’t even begin to assess the accuracy,” Kobach said after the commission’s first in-person meeting. “You are blind. You don’t have the ability to assess the credibility of evidence brought before the commission.”

Why Republicans Want the 2020 Census to Fail - The writers of Article I Sec. 2 of the Constitution, which mandates a census every ten years, did not have satellite analysis and probabilistic sampling in mind. Neither did they imagine a United States with more than 325 million people spread across the fourth largest country on Earth. But having created a system that ties representation to population, certainly they understood that the seemingly simple question of how to count Americans would be a political battleground. The results of the U.S. census are far more important than most Americans realize. Census data are the starting point for redistricting and reapportionment – adding and removing House districts from states as population changes dictate – not to mention the distribution of billions of dollars in federal funding. Housing assistance, highway maintenance and Medicare/Medicaid are just three examples of programs that distribute federal dollars to states in the form of grants based on census results. Undercounting populations guarantees that over the next decade, states will be strapped for funding in these areas. And that is likely to happen if Republicans in Congress get their way. Under cover of the non-stop Trump circus, they are quietly working behind the scenes to ensure that the 2020 census fails – and fails to their advantage.

Senate Banking leaders introduce flood insurance bill --  The leaders of the Senate Banking Committee on Monday evening released a bipartisan bill to keep the federal flood insurance program funded for six years and create new risk mitigation procedures for communities to follow. Senate Banking Committee Chairman Mike Crapo (R-Idaho) and ranking Democrat Sherrod Brown (D-Ohio) said the bill would serve as a template for consideration by the whole committee, and could likely be amended. “We have held multiple hearings and worked on a bipartisan basis to hear thoughts and concerns from the Program’s stakeholders, regulators and from Banking Committee members,” Crapo and Brown said in a joint statement. “This bill represents the many areas where we have found agreement, and we look forward to working with our colleagues to address outstanding issues.” Congress has until October 1 to reauthorize the National Flood Insurance Program (NFIP), first established in the 1960s to provide flood insurance to at-risk homes. Lawmakers are seizing on the deadline as a chance to cut the NFIP’s $24 billion debt and shift more flood insurance customers to a burgeoning private market. Private flood insurance was largely nonexistent when the NFIP was established in 1968, and Republicans are eager to reduce taxpayer exposure to risky homes by easing federal policy holders into private plans.

U.S. House panel to consider self-driving car legislation (Reuters) - A U.S. House subcommittee will vote on Wednesday on a sweeping proposal to allow automakers to deploy up to 100,000 self-driving vehicles without meeting existing auto safety standards and bar states from imposing driverless car rules. The measure, which would be the first significant federal legislation aimed at speeding self-driving cars to market, would require automakers to submit safety assessment reports to U.S. regulators, but would not require pre-market approval of advanced vehicle technologies. Automakers would have to show self-driving cars "function as intended and contain fail safe features" but the Transportation Department could not "condition deployment or testing of highly automated vehicles on review of safety assessment certifications," the draft measure unveiled late Monday said. Last month, a U.S. House Energy and Commerce subcommittee held a hearing on a draft plan to allow U.S. regulators to exempt up to 100,000 vehicles a year per manufacturer from federal motor vehicle safety rules that prevent the sale of self-driving vehicles without human controls and bar states from setting rules that could block their use. Automakers must meet nearly 75 auto safety standards, many of which were written with the assumption that a licensed driver will be in control of the vehicle. The 30-page draft bill would also require the Transportation Department within two years to adopt rules requiring automakers to add a driver alert to check rear seating in an effort to prevent children from being left behind and consider setting performance standards for headlights.

In a win for automakers, House panel approves sweeping self-driving car proposal - A U.S. House panel on Wednesday approved a sweeping proposal by voice vote to allow automakers to deploy up to 100,000 self-driving vehicles without meeting existing auto safety standards and bar states from imposing driverless car rules. Representative Robert Latta, a Republican who heads the Energy and Commerce Committee subcommittee overseeing consumer protection, said he would continue to consider changes before the full committee votes on the measure, expected next week. The full U.S. House of Representatives will not take up the bill until it reconvenes in September after the summer recess. The measure, which would be the first significant federal legislation aimed at speeding self-driving cars to market, would require automakers to submit safety assessment reports to U.S. regulators, but would not require pre-market approval of advanced vehicle technologies. Automakers would have to show self-driving cars "function as intended and contain fail safe features" but the Transportation Department could not "condition deployment or testing of highly automated vehicles on review of safety assessment certifications," the draft measure unveiled late Monday said. The issue has taken new urgency because road deaths in the United States rose 7.7 percent in 2015 over the previous year to 35,200, the highest annual jump since 1966. Traffic deaths climbed nearly 8 percent in the first nine months of 2016, government data showed.

Jeff Sessions wants police to take more cash from American citizens -- Attorney General Jeff Sessions on Monday said he'd be issuing a new directive this week aimed at increasing police seizures of cash and property. “We hope to issue this week a new directive on asset forfeiture — especially for drug traffickers,” Sessions said in his prepared remarks for a speech to the National District Attorney's Association in Minneapolis. "With care and professionalism, we plan to develop policies to increase forfeitures. No criminal should be allowed to keep the proceeds of their crime. Adoptive forfeitures are appropriate as is sharing with our partners." Asset forfeiture is a disputed practice that allows law enforcement officials to permanently take money and goods from individuals suspected of crime. There is little disagreement among lawmakers, authorities and criminal justice reformers that “no criminal should be allowed to keep the proceeds of their crime.” But in many cases, neither a criminal conviction nor even a criminal charge is necessary — under forfeiture laws in most states and at the federal level, mere suspicion of wrongdoing is enough to allow police to seize items permanently. Additionally, many states allow law enforcement agencies to keep cash that they seize, creating what critics characterize as a profit motive. The practice is widespread: In 2014, federal law enforcement officers took more property from citizens than burglars did. State and local authorities seized untold millions more. Since 2007, the Drug Enforcement Administration alone has taken more than $3 billion in cash from people not charged with any crime, according to the Justice Department's Inspector General. The practice is ripe for abuse.

The Feds Just Expanded Civil Asset Forfeiture 'Laws' Nationwide --When you're a government agency, asking for a tax increase is always a hassle. As Ryan McMaken notes, for the most part, taxpayers don't like taxes, and if asked if they want to pay more, they're likely to often say "no." Moreover, when public officials pass tax increases, they may face the wrath of taxpayers at the ballot box. For this reason, governments are always looking for ways to get revenue without having to use tax revenue.One such 'hidden' method of seizing wealth from the taxpayers is through what is now called "civil asset forfeiture." This occurs when a law enforcement agency seizes the assets - including real estate, cars, cash, and other valuables - from private citizens based merely on the suspicion that the person has committed a crime with the assets in question. No due process is necessary. No conviction in a court of law need occur. While it is technically possible to sue a government agency to reclaim one's possessions, this requires immense amounts of time and legal fees to pursue.Needless to say, civil asset forfeiture has become a lucrative source of income for law enforcement agencies. And, over the past 30 years, the practice has become widespread.  Some state legislatures (Florida, Michigan, Nebraska, New Mexico, and Ohio) are beginning to push back against these clearly unconstitutional asset forfeiture schemes. As the National Review reports, “New Mexico now requires a criminal conviction before law enforcement can seize property, while police in Florida must prove “beyond reasonable doubt” that property is linked to a crime before it’s seized.” And it is that pushback that has seemingly pushed the federal government to 'fix' the situation.As Reuters reports, the U.S. Justice Department announced on Wednesday that the federal government will reinstate a program that helps local and state law enforcement seize cash and other assets they suspect have been earned from crimes. Local police will now be able to seize cash, often from those suspected of drug crimes, even in states that do not condone the policy.

Conservatives are trashing Jeff Sessions’ controversial asset-seizure program -- Republican lawmakers are up in arms over a new Justice Department directive allowing the federal government to take assets that were lawfully seized by local or state law enforcement officials. Critics challenged the constitutionality of the program and alleged it encourages law enforcement agencies to seize property from individuals who were merely suspected of criminal activity and not formally charged with a crime, violating due process."Instead of revising forfeiture practices in a manner to better protect Americans' due process rights, the DOJ seems determined to lose in court before it changes its policies for the better," said Republican Sen. Mike Lee of Utah."The Fifth Amendment protects us from the government depriving us of our property without due process of law," read a statement from Republican Sen. Rand Paul of Kentucky. "I oppose the government overstepping its boundaries by assuming a suspect's guilt and seizing their property before they even have their day in court.""Civil asset forfeiture is unjust and unconstitutional," tweeted Republican Rep. Justin Amash of Michigan. "It's a big-government scheme to take people's property without due process. End it." "This is a troubling decision for the due-process protections afforded to us under the Fourth Amendment as well as the growing consensus we’ve seen nationwide on this issue," Republican Rep. Darrell Issa of California said in a statement. "Criminals shouldn’t be able to keep the proceeds of their crime, but innocent Americans shouldn’t lose their right to due process, or their private property rights, in order to make that happen."  Announced on Wednesday, the civil-asset forfeiture directive allows local law-enforcement to avoid state regulations that places limits on forfeitures. By allowing the federal government to acquire the seized assets, the state or local agency may be eligible to receive up to 80% of the proceeds, bypassing state laws that require the assets to be deposited into general funds for the state. The remaining 20% of the funds would be kept by the federal government.

Russiagate and the Magnitsky Affair, Linked Again -- Matt Taibbi - When I first read the explosive New York Times story about Donald Trump Jr.'s meeting with "Kremlin-linked lawyer" Natalia Veselnitskaya, I had multiple reactions.  The first was amazement at Junior's sheer stupidity (responding affirmatively to "If you would like to participate in our country's state-sponsored effort to help your father's campaign, please respond 'yes' in writing here" will go down as an unsurpassable moment in unsafe political sex). The second was confusion, and the third was déjà vu. I never met Veselnitskaya, but just months ago I did cross paths with one of her colleagues. Like Veselnitskaya, this person had been lobbying on behalf of a Russian-directed company called Prevezon to overturn the Magnitsky Act, a 2012 law which sanctions Russia for human rights abuses. The interview was off the record, so I can't say much about it, except to say that my experience was weirdly similar to the account Trump Jr. offered about his meeting with Veselnitskaya. I went into the meeting expecting a scoop on another topic, and instead found myself essentially being lobbied about the Magnitsky Act. I came away scratching my head about the Prevezon crew, unsure of whether they represented high-ranking Russian interests, or were instead just a bunch of provincial amateurs trying to get a sanctions regime lifted in order to unfreeze their assets.  According to The Hill, others who ran into Veselnitskaya recently came away wondering the same thing:

Secret Service denies vetting Trump Jr. meeting (Reuters) - The U.S. Secret Service on Sunday denied a suggestion from President Donald Trump's personal lawyer that it had vetted a meeting between the president's son and Russian nationals during the 2016 campaign. Donald Trump Jr. has acknowledged that he met in New York with Russian lawyer Natalia Veselnitskaya after he was told she might have damaging information about his father's rival, Democrat Hillary Clinton. "Well, I wonder why the Secret Service, if this was nefarious, why the Secret Service allowed these people in. The president had Secret Service protection at that point, and that raised a question with me," Jay Sekulow, a member of the president's legal team, said on Sunday on the ABC news program "This Week." In an emailed response to questions about Sekulow's comments, Secret Service spokesman Mason Brayman said the younger Trump was not under Secret Service protection at the time of the meeting, which included Trump's son and two senior campaign officials. "Donald Trump, Jr. was not a protectee of the USSS in June, 2016. Thus we would not have screened anyone he was meeting with at that time," the statement said. According to emails released by Trump Jr. last week, he eagerly agreed to meet Veselnitskaya, who he was told was a Russian government lawyer. Veselnitskaya has said she is a private lawyer and denies having Kremlin ties. On Friday, NBC News reported that a lobbyist who was once a Soviet counter-intelligence officer participated in the meeting, which was also attended by Trump's son-in-law, Jared Kushner, and the president's former campaign manager, Paul Manafort. The meeting appears to be the most tangible evidence of a connection between Trump's election campaign and Russia, a subject that has prompted investigations by congressional committees and a federal special counsel. Moscow has denied any interference and the president and Trump Jr. have denied any collusion.

Russian-American With ‘Colorful’ Past Attended 2016 Trump Tower Meeting - A Soviet-born American businessman was the eighth person present at a June 2016 meeting that included President Trump's son, son-in-law, campaign manager and a Russian lawyer who allegedly had promised to provide dirt on Hillary Clinton. Irakly "Ike" Kaveladze, 52, is described as a vice president of Crocus Group, a real estate company owned by Russian developer Aras Agalarov, who partnered with the Trump organization to bring the 2013 Miss Universe pageant to Russia. Kaveladze joined Donald Trump Jr., the president's son-in-law, Jared Kushner and former campaign manager Paul Manafort in the meeting with Russian attorney Natalia Veselnitskaya and Russian-American lobbyist Rinat Akhmetshin at Trump Tower.Scott Balber, Kaveladze's attorney, confirmed to The Washington Post and other news outlets that he had been contacted by a representative of Special Counsel Robert Mueller and complied with a request to identify Kaveladze as among the attendees at the meeting. Balber is quoted in The Los Angeles Times as saying his client is "cooperating fully" with the special counsel.

Kremlin Slams "Schizophrenic" Report Of "Secret" Putin-Trump Meeting -- The Kremlin responded to media reports that President Donald Trump held a second “secret” meeting with Vladimir Putin at the G20 summit, saying it has prompted “astonishment” in Moscow and displays a “lack of understanding” while confirming the two did chat informally over dinner.  "The use of such notion as "undisclosed" or "secret" meeting causes absolute astonishment and lack of understanding" Kremlin spokesman Dmitry Peskov told Russian state TV, Channel One. Peskov said there was only one meeting between the two leaders on the sidelines of the summit and it was officially announced; and that Putin and Trump “repeatedly exchanged their opinions during the [summit].” When asked about the nature of the G20 dinner chat, Kremlin spokesman Dmitry Peskov told a conference call with reporters: "There was no secret second meeting. The two men had chatted informally over dinner", said Peskov, and had discussed adoption. Putin’s spokesman also said “there were no undisclosed or secret meeting” adding that such claims are “absurd.” Peskov also said that the existence of such reports in the MSM demonstrates the “unhealthy attitude” of the US establishment towards Russia. “Presenting something like this as a meeting that could be kept secret from anybody is a manifestation of… schizophrenia,” he said.

New York Attorney Demands To See Manafort's Bank Records Over $16 Million Loan -- In what should have probably been the first action in the 'investigation' of former Trump campaign chairman Paul Manafort, WSJ reports that New York prosecutors have decided to'follow the money', demanding records relating to up to $16 million in loans from a bank run by a former campaign adviser for President Trump.  As a reminder, in mid-April, federal investigators requested Mr. Manafort’s banking records from Citizens Financial Group, the Journal previously reported, but now...The subpoena by the Manhattan district attorney’s office to the Federal Savings Bank, a small Chicago bank run by Steve Calk, sought information on loans the bank issued in November and January to Mr. Manafort and his wife, the person said.  Mr. Calk was a member of Mr. Trump’s economic advisory panel who overlapped with Mr. Manafort on the Trump campaign. Around the time they were issued, Mr. Calk had expressed interest in becoming Mr. Trump’s Army Secretary, the Journal previously reported, citing three people briefed on the Army interactions. A veteran whose bank caters to former members of the military, Mr. Calk didn’t get the job, and previously declined to comment on it. Messrs. Manafort and Calk knew each other before the campaign, a person familiar with the relationship has said.The Journal reported in May that Manhattan District Attorney Cyrus R. Vance Jr. and New York Attorney General Eric Schneiderman had begun examining real-estate transactions by Mr. Manafort, who has spent and borrowed tens of millions of dollars in connection with property across the U.S. over the past decade. Investigators at both offices are examining the transactions for indications of money-laundering and fraud, people familiar with the matters have said.Asked by a reporter for The Wall Street Journal about the subpoena Monday, Mr. Calk said,“I’ve got no comment, but I appreciate the call.”A spokesman for Mr. Manafort declined to comment.

Mueller probes Manafort over possible money laundering | New York Post: Special counsel Robert Mueller is probing possible money laundering by Paul Manafort, President Trump’s former campaign manager, as part of his investigation into Russian interference in the election, a new report said Thursday. The investigation by Mueller began just several weeks ago, the Wall Street Journal reported.The paper said Senate and House intelligence committees also are probing possible money laundering by Manafort.A spokesman for Manafort declined to comment, as did Mueller’s spokesman.The investigation is looking at Russian meddling in the 2016 US election as well as whether the Trump campaign colluded with the Kremlin. Trump has called the probe “fake news” and a”witch hunt” and has denied any collusion.

Deutsche Bank Faces DOJ Subpoena Over Trump-Russia Probe -- Deutsche’s relationship with Trump and questions about hundreds of millions in loans have dogged the German bank and the White House for months, abd now, 'according to sources' reported by The Guardian, Robert Mueller’s team and Trump’s bankers have established informal contacts and formal requests for information are forthcoming.According to an analysis by Bloomberg, Trump now owes Deutsche, his biggest creditor, around $300m. He has four large mortgages, all issued by Deutsche’s private bank.The loans are guaranteed against the president’s properties: a new deluxe hotel in Washington DC’s old post office building, just around the corner from the White House; his Chicago tower hotel; and the Trump National Doral Miami resort. The Guardian reports that executives inside Deutsche Bank, Donald Trump’s personal bankers, are expecting that the bank will soon be receiving subpoenas or other requests for information from Robert Mueller, the special counsel who is investigating possible collusion between the Kremlin and the Trump campaign.A person close to the matter who spoke to the Guardian on the condition of anonymity said that Mueller’s team and the bank have already established informal contact in connection to the federal investigation.The Guardian reported in February that the bank launched a review of Trump’s account earlier this year in order to gauge whether there were any suspicious connections to Russia and did not discover anything suspicious.Nevertheless, the bank has been the subject of intense scrutiny among some Democrats on Capitol Hill, who have demanded the bank turn over detailed information about the president’s accounts.The requests for information from Maxine Waters, the top Democrat on the House financial services committee, have focused on whether any Russian entities may have provided financial guarantees for the loans that were made to the president or his immediate family members.

Mueller probing Trump family business dealings in Russia probe: Bloomberg: Special Counsel Robert Mueller is examining a broad range of transactions involving President Donald Trump's businesses and those of his family and associates, a person familiar with the investigation told Bloomberg. On Wednesday, Trump told The New York Times that Mueller would be crossing a red line if he expanded his investigation to look at Trump family finances beyond ties to Russia. Bloomberg reported Thursday that investigators are examining Russian purchases of apartments in Trump buildings, Trump's involvement in a New York development with Russian associates in SoHo, the 2013 Miss Universe pageant in Moscow and Trump's 2008 sale of a Florida mansion to a Russian oligarch. They are also looking into the Bank of Cyprus, where Commerce Secretary Wilbur Ross served as the bank's vice chairman before taking his current role. Trump's son-in-law and aide, Jared Kushner, secured financing for some of his family's real estate properties through the bank, someone familiar with the inquiry told Bloomberg. Trump attorney John Dowd told NBC "Today" show's Savannah Guthrie that the defense team is cooperating with Mueller. "Bob Mueller is tops," he said. "We have an excellent relationship with him." Earlier, he said he was unaware the special counsel was looking into the transactions mentioned in the Bloomberg report. "Those transactions are in my view well beyond the mandate of the special counsel, are unrelated to the election of 2016 or any alleged collusion between the Trump campaign and Russia and most importantly, are well beyond any statute of limitation imposed by the United States Code," Dowd said.

Trump-Mueller tensions escalate | TheHill: President Trump is ramping up his criticism of Robert Mueller, warning that the special counsel investigating Russian election interference would cross the line by looking into his finances. Mueller is now reportedly doing just that — looking at transactions involving Trump’s businesses and those of his associates. The development is sure to exacerbate Trump’s frustration with the Russia probe, an investigation that has dogged his presidency and forced him and his closest aides to hire legal representation. Among other things, Mueller is said to be probing potential obstruction of justice by Trump, following the president’s decision to fire FBI director James Comey at the height of the bureau’s investigation into Russian meddling — an event that precipitated Mueller’s appointment. In recent weeks, Mueller has been building an all-star team of more than a dozen lawyers for the investigation; some of those appointees have come under scrutiny for donating money to Democratic political candidates. All the while, the president has deemed the investigation a “witch hunt.” Mueller, a former FBI director who has a reputation in Washington as a straight shooter, was appointed special counsel by the Justice Department in May. In that role, he has broad authority to investigate Russia’s meddling as well as any ties between associates of Trump’s campaign and Moscow. Legal experts say it’s only natural that Mueller’s investigation would look at aspects of Trump’s businesses. 

Trump team seeks to control, block Mueller’s Russia investigation -- Some of President Trump’s lawyers are exploring ways to limit or undercut special counsel Robert S. Mueller III’s Russia investigation, building a case against what they allege are his conflicts of interest and discussing the president’s authority to grant pardons, according to people familiar with the effort. Trump has asked his advisers about his power to pardon aides, family members and even himself in connection with the probe, according to one of those people. A second person said Trump’s lawyers have been discussing the president’s pardoning powers among themselves. One adviser said the president has simply expressed a curiosity in understanding the reach of his pardoning authority, as well as the limits of Mueller’s investigation. With the Russia investigation continuing to widen, Trump’s lawyers are working to corral the probe and question the propriety of the special counsel’s work. They are actively compiling a list of Mueller’s alleged potential conflicts of interest, which they say could serve as a way to stymie his work, according to several of Trump’s legal advisers. A conflict of interest is one of the possible grounds that can be cited by an attorney general to remove a special counsel from office under Justice Department regulations that set rules for the job. Responding to this story on Friday after it was published late Thursday, one of Trump’s attorneys, John Dowd, said it was “not true” and “nonsense.” “The President’s lawyers are cooperating with special counsel Robert Mueller on behalf of the President,” he said. Other advisers said the president is also irritated by the notion that Mueller’s probe could reach into his and his family’s finances. Trump has been fuming about the probe in recent weeks as he has been informed about the legal questions that he and his family could face. His primary frustration centers on why allegations that his campaign coordinated with Russia should spread into scrutinizing many years of Trump dealmaking. He has told aides he was especially disturbed after learning Mueller would be able to access several years of his tax returns. 

Trump Aides, Seeking Leverage, Investigate Mueller’s Investigators— President Trump’s lawyers and aides are scouring the professional and political backgrounds of investigators hired by the special counsel Robert S. Mueller III, looking for conflicts of interest they could use to discredit the investigation — or even build a case to fire Mr. Mueller or get some members of his team recused, according to three people with knowledge of the research effort. The search for potential conflicts is wide-ranging. It includes scrutinizing donations to Democratic candidates, investigators’ past clients and Mr. Mueller’s relationship with James B. Comey, whose firing as F.B.I. director is part of the special counsel’s investigation. The effort to investigate the investigators is another sign of a looming showdown between Mr. Trump and Mr. Mueller, who has assembled a team of high-powered prosecutors and agents to examine whether any of Mr. Trump’s advisers aided Russia’s campaign to disrupt last year’s presidential election. Some of the investigators have vast experience prosecuting financial malfeasance, and the prospect that Mr. Mueller’s inquiry could evolve into an expansive examination of Mr. Trump’s financial history has stoked fears among the president’s aides. Both Mr. Trump and his aides have said publicly they are watching closely to ensure Mr. Mueller’s investigation remains narrowly focused on last year’s election. 

Trump reshuffling legal team -- President Donald Trump is reshuffling his legal team as special counsel Robert Mueller's investigation moves full steam ahead. The developments come one day after Trump suggested an aggressive pushback against his investigators, telling The New York Times that Mueller's office had widespread conflicts of interest while warning investigators any examinations of his family's finances would be improper. Sources told CNN, however, that these moves were well in the works before the Times interview took place. Marc Kasowitz, Trump's longtime personal attorney who has been the lead lawyer on the Russia investigation, will see his role recede, according to two sources with knowledge of the matter.A third source said Kasowitz's role is changing because the needs are more Washington-centric and Kasowitz has done his primary job of putting the team together.Instead, attorney John Dowd, along with Jay Sekulow, will now be the President's primary personal attorneys for the investigation, according to the two sources with knowledge of the situation. Dowd will take the lead. By being outside the White House, their dealings with the President will be protected under attorney-client privilege that is afforded any US citizen, the sources explained.

Here’s the Chain Reaction Trump Could Set Off by Trying to Fire Mueller --President Donald Trump’s interview with the New York Times on Wednesday has stirred speculation he may consider firing Special Counsel Robert Mueller for investigating Trump’s business dealings as part of the Russia probe.But Trump can’t fire Mueller directly, according to the law that authorizes Mueller’s probe. If he tried, he could set off a chain-reaction that would throw the Justice Department into upheaval.  Only the person acting as attorney general, currently Rod Rosenstein on matters related to the probe, can fire Mueller, and he’s said he won’t do it without “good cause.” So Trump would first have to purge the upper ranks of the Justice Department until he finds someone willing to follow his orders and dismiss the special counsel.  He’d almost certainly begin by dismissing Rosenstein, whose political loyalties Trump questioned in the Times interview on Wednesday in which he also warned Mueller against broadening his investigation. Such a scenario would parallel President Richard Nixon’s 1973 “Saturday Night Massacre,” when Nixon forced out the top two officials in the Justice Department in order to oust the Watergate special counsel. “I don’t think that’s politically survivable, and it’s not clear how much collateral damage he has to do to in order to put himself into a position to have somebody fire Mueller,” said Senator Sheldon Whitehouse, a Democrat from Rhode Island. Mueller’s investigation has expanded to examine a broad range of transactions involving the president’s businesses, including dealings by his son-in-law, Jared Kushner, and Commerce Secretary Wilbur Ross, a person familiar with the probe told Bloomberg News. Trump told the Times that if Mueller examined his family’s finances beyond any relationship with Russia he’d consider it "a violation."

Citing Recusal, Trump Says He Wouldn’t Have Hired Sessions -- President Trump said on Wednesday that he never would have appointed Attorney General Jeff Sessions had he known Mr. Sessions would recuse himself from overseeing the Russia investigation that has dogged his presidency, calling the decision “very unfair to the president.” In a remarkable public break with one of his earliest political supporters, Mr. Trump complained that Mr. Sessions’s decision ultimately led to the appointment of a special counsel that should not have happened. “Sessions should have never recused himself, and if he was going to recuse himself, he should have told me before he took the job and I would have picked somebody else,” Mr. Trump said. In a wide-ranging interview with The New York Times, the president also accused James B. Comey, the F.B.I. director he fired in May, of trying to leverage a dossier of compromising material to keep his job. Mr. Trump criticized both the acting F.B.I. director who has been filling in since Mr. Comey’s dismissal and the deputy attorney general who recommended it. And he took on Robert S. Mueller III, the special counsel now leading the investigation into Russian meddling in last year’s election. Mr. Trump said Mr. Mueller was running an office rife with conflicts of interest and warned investigators against delving into matters too far afield from Russia. Mr. Trump never said he would order the Justice Department to fire Mr. Mueller, nor would he outline circumstances under which he might do so. But he left open the possibility as he expressed deep grievance over an investigation that has taken a political toll in the six months since he took office.

NSA Leak: Sessions Reportedly Discussed Trump Campaign With Former Russian Ambassador ---The Washington Post just made Attorney General Jeff Sessions's rotten week even worse. In what appears to be yet another leaked NSA intercept, WaPo reports citing 'current and former American officials', that Sergey Kislyak, the now infamous former Russian ambassador to the US, told his superiors in Moscow that he discussed campaign-related matters - including policy issues important to Moscow - with Sessions during the 2016 presidential race. If accurate, the report would amount to yet another straw on the camel's back of Sessions' relationship with the former ambassador - who has been at the center of many of the US media's stories alleging collusion between Russian officials and the Trump campaign. When he announced his intentions to recuse himself from the DOJ’s probe into alleged collusion between the Trump campaign back in March, Sessions adamantly denied allegations that he had discussed the campaign with Russian officials, including former ambassador Kislyak. Sessions opted to recuse himself after he failed to disclose his contacts with Kislyak during his confirmation hearing with the Senate back in February.“I never had meetings with Russian operatives or Russian intermediaries about the Trump campaign,” Sessions said in March when he announced that he would recuse himself from matters relating to the FBI probe of Russian interference in the election and any connections to the Trump campaign.Sessions initially failed to disclose his contacts with Kislyak and then said that the meetings were not about the Trump campaign.However, Kislyak’s accounts of two conversations with Sessions, then a top foreign policy adviser to Republican candidate Donald Trump, were intercepted by US spy agencies, which monitor the communications of senior Russian officials both in the United States and in Russia. As WaPo details, one former official said that the intelligence indicates that Sessions and Kislyak had “substantive” discussions on matters including Trump’s positions on Russia-related issues and prospects for U.S.-Russia relations in a Trump administration.

 Questions grow over Kushner’s security clearances | TheHill: Jared Kushner is moving closer to the eye of the storm surrounding President Trump and Russia. Calls for Kushner to lose his security clearance have mounted as congressional investigators probe whether the Trump campaign’s digital operation — run by the president’s son-in-law — coordinated efforts with Russian bots spreading fake news about Democratic presidential nominee Hillary Clinton. Kushner is also a figure in Donald Trump Jr.’s controversial meeting with a Russian lawyer promising damaging information on Clinton. He and former Trump campaign manager Paul Manafort both attended the meeting, as did a Russian-American lobbyist with past ties to Russian intelligence. Kushner reportedly left the meeting after 10 minutes.Most of the attacks on Kushner have been partisan, but even some Republicans fed up with the drama surrounding Trump’s family are now calling for Kushner’s exit. "I'm going out on a limb here, but I would say that I think it would be in the president's best interest if he removed all of his children from the White House — not only Donald [Jr.], but Ivanka and Jared Kushner," Rep. Bill Flores (R-Texas) told KBTX-TV on Thursday. Trump Jr. does not actually work at the White House, though Kushner and Ivanka Trump both have offices. Kushner, who works on a broad foreign policy portfolio, has now had to amend his security clearance form twice to account for previously unreported meetings with Russian individuals. 

 Steve Bannon Reportedly Attacked Paul Ryan As 'A Limp-D**k Motherf**ker' | HuffPost: Steve Bannon reportedly called House Speaker Paul Ryan (R-Wis.) “a limp-dick motherfucker who was born in a petri dish at the Heritage Foundation,” referring to the think tank whose fiscal conservative policies the representative espouses.The detail is one of many bizarre nuggets in Devil’s Bargain, a new book on White House chief strategist Bannon’s role in President Donald Trump’s political rise, by Bloomberg Businessweek reporter Joshua Green, who has extensively covered the former Breitbart chairman.Green wrote that Bannon’s comment on Ryan came during the spring of 2016, when it became increasingly possible that Trump would become the GOP presidential nominee, to the surprise and concern of establishment Republicans. Some of them had floated Ryan as a possible alternative if the party’s convention were to become contested.“One fleetingly popular scenario to stop Trump from becoming the nominee was for GOP delegates to coalesce around a white-knight alternative at the party convention in July,” Green wrote, noting that Ryan had “emerged as the chattering-class favorite.”This development, according to Green, “sent Bannon into a panic of his own” and the Breitbart chairman who later that summer would lead Trump’s campaign, began “plotting an all-out war to stop Ryan, of whom he was both fearful and dismissive — sometimes within the same sentence.”While heading Breitbart, the conservative news site that frequently espouses white nationalist views, Bannon had long considered establishment Republicans enemies. One of the site’s reporters, Julia Hahn — now a White House staffer — often wrote pieces critical of Ryan.Ryan’s office did not return a request for comment.

Ethics watchdog to release Mar-a-Lago visitor logs | TheHill: Government watchdog Citizens for Responsibility and Ethics in Washington (CREW) will be making public visitor logs to President Trump’s Mar-a-Lago resort starting this fall. CREW on Monday announced that the Department of Homeland Security (DHS) will turn over visitor logs to Trump’s property by Sept. 8 as part of ongoing litigation with the group, who in turn will make them public. CREW, the National Security Archive and the Knight First Amendment Institute sued for logs to Trump Tower, the White House and Mar-a-Lago to be released. Their lawsuit on White House logs is pending, and DHS claims to have no records for visitors to Trump Tower, according to a statement from CREW.“The public deserves to know who is coming to meet with the president and his staff,” CREW executive director Noah Bookbinder said in a statement. “We are glad as a result of this case, this information will become public for meetings at his personal residences — but it needs to be public for meetings at the White House as well.” Senate Democrats earlier this year proposed the Make Access Records Available to Lead American Government Openness Act, or MAR-A-LAGO Act, to force Trump to release visitor logs to the White House or other locations where he conducts official business. Rep. Mike Quigley (D-Ill.) also introduced a House version of the legislation. The Florida residence is a popular weekend destination for the president, with Trump even hosting Chinese President Xi Jinping there. The Obama administration released their visitor logs starting in 2009 after a similar CREW lawsuit, but the Trump White House announced in April that they would break with the practice.

Russia is not Our Enemy - The Twitterverse and the rest of social media are abuzz with hysteria about Russia in light of the recent revelations regarding Donald Trump Jr.’s meeting with a Russian national who claimed to be in possession of some incriminating information about Hillary Clinton. Words frequently used by the anti-Trump Russian conspiracy mongers to describe Russia include “enemy,” “hostile,” “adversary,” etc. There is just one problem with this. It is not an accurate characterization of Russia or our relationship with her.For the record, the U.S. currently has no declared enemies. Not one. The fact that we are at war in one country and are aiding one side in a civil war in another yet have no declared enemies should give one pause, but that is for a separate essay. The U.S has (way too many) countries that are treaty allies, and countries that are not treaty allies, but we have no declared enemies. People who irresponsibly describe Russia as an enemy of the U.S. need to produce the declaration of such or retract their slander.What Russia is is an impediment to Davos uber alles globalism, and that is what this whole “RussiaGate” ruse is really all about. The Davosian hegemonists seek to portray Russia as the enemy and maintain tensions between the two great nuclear powers because it serves their ends. A nationalist Russia and a newly nationalists “America first” United States getting along is the stuff of Davos Man, whose primary loyalty is not to his nation but to the “liberal world order” that enriches him, nightmares. That so many rank and file Democrats and liberals have allowed themselves to become useful idiots for elite hegemonists does not speak well of their judgment.

Pussy Riot Founder Says American Liberals Scapegoat Putin To Distract From Democrats’ Problems -- Vladimir Putin has become a fixture in the U.S. political conversation, as a majority of Americans have come to believe he helped rig the 2016 election for Donald Trump. Yet one prominent anti-Putin activist who was jailed by the Russian government says, in a new podcast interview, that America's political class is deliberately promoting an inaccurate picture of Putin to distract from the United States' own domestic problems.In 2012, Nadezhda Tolokonnikova and two other bandmates from punk band Pussy Riot were imprisoned in Russia for daring to speak out against Putin's regime. The case generated international headlines spotlighting the repressive practices of the Russian government. Tolokonnikova and her bandmates were released 21 months later.  In the podcast interview with IBT's David Sirota, Tolokonnikova rejects the idea that Putin is an all-powerful strongman,  and says liberal media outlets are trying to scapegoat him in order to distract attention from other problems. Podcast subscribers can click here to hear the entire interview (which also includes John Cusack on his new book "Things That Can And Cannot Be Said"). What follows is an excerpt of the podcast discussion with Tolokonnikova.

The New McCarthyism Is Destroying the Democratic Party - For more than a year now, the collective U.S. ruling class, with Democratic Party and corporate media operatives in the vanguard, has frozen the national political discourse in a McCarthyite time warp. A random visit to a July 26, 2016, issue of the New York Times reveals the same obsession as that which consumes the newspaper today: “Following the Links from Russian Hackers to the U.S. Election,” “Spy Agency Consensus Grows That Russia Hacked D.N.C.” A year later, the allegations persist, piled ever higher with innuendo and outright nonsense. However, proof of the predicate act—that Russia, not Wikileaks, penetrated the DNC—remains totally absent.What is the purpose of this torture-by-media? Clearly, the Trump White House has been crippled by the tsunami that never ebbs, but the Democrats have not been strengthened in the process, and the corporate media’s standing among the public erodes by the day. A poll conducted last month showed majorities of voters want Congress to ease up on Russia investigations and get to work on healthcare, terrorism, national security, the economy and jobs. Almost three out of four respondents to the Harvard-Harris poll said lawmakers aren’t paying attention to the issues that are important to them—including 68 percent of Democrats. Sixty-two percent of voters say there is no hard evidence of White House “collusion” with Russia, and 64 percent think the investigations are hurting the country. The non-stop vilification of Russia and Trump has seriously backfired on the corporate media. Another poll by Harvard-Harris, conducted back in May, showed that two out of three Americans believe the so-called “mainstream” press is full of “fake news”—including a majority of Democrats. The Russiagate blitzkrieg, designed to delegitimize Trump and demonize Vladimir Putin, has exacerbated an already existing crisis of legitimacy for the entire U.S. political system. “Every major institution from the presidency to the courts is now seen as operating in a partisan fashion in one direction or the other,” said poll co-director Mark Penn.

Haiti Official Who Exposed The Clinton Foundation Is Found Dead - The mainstream media’s silence over Klaus Eberwein’s death is deafening. Eberwein was a former Haitian government official who was expected to expose the extent of Clinton Foundation corruption and malpractice next week. He has been found dead in Miami at the age of 50.The circumstances surrounding Eberwein’s death are also nothing less than unpalatable. According to Miami-Dade’s medical examiner records supervisor, the official cause of death is “gunshot to the head.“ Eberwein’s death has been registered as “suicide” by the government. But not long before his death, he acknowledged that his life was in danger because he was outspoken on the criminal activities of the Clinton Foundation. Eberwein was a fierce critic of the Clinton Foundation’s activities in the Caribbean island, where he served as director general of the government’s economic development agency, Fonds d’assistance économique et social, for three years. “The Clinton Foundation, they are criminals, they are thieves, they are liars, they are a disgrace,” Eberwein said at a protest outside the Clinton Foundation headquarters in Manhattan last year. Eberwein was due to appear on Tuesday before the Haitian Senate Ethics and Anti-Corruption Commission where he was widely expected to testify that the Clinton Foundation misappropriated Haiti earthquake donations from international donors. But this “suicide” gets even more disturbing…Eberwein was only 50-years-old and reportedly told acquaintances he feared for his life because of his fierce criticism of the Clinton Foundation.  His close friends and business partners were taken aback by the idea he may have committed suicide. “It’s really shocking,” said friend Gilbert Bailly. “We grew up together; he was like family.”Eberwein was expected to testify against the Clinton Foundation in court and ends up committing suicide shortly before.  Where have we heard this before?

FBI Turns Over 7,000 Emails From Weiner's Laptop In Clinton Case --The event which according to many democrats cost Hillary Clinton the election (aside from Putin personally hacking the brains of several million middle-class Americans and forcing them to vote against Hillary, of course) is finally getting closure. On Thursday, the FBI turned over 7,000 new documents from Anthony Weiner’s private laptop to the State Department as part of a Judicial Watch's freedom of information act lawsuit related to last year's Hillary Clinton email case.On Thursday, conservative watchdog group Judicial Watch and State Department representatives appeared in federal court in Washington, D.C., over the group's FOIA suit seeking Clinton emails from her tenure at the State Department. During the hearing it was revealed that 7,000 new documents were turned over from Weiner's notebook computer, the same computer which prompted James Comey to restart the FBI probe shortly before last year's presidential election. The stack of emails is also expected to contain some emails sent by Weiner’s estranged wife, Clinton aide Huma Abedin.Speaking to Fox News, Judicial Watch President Tom said that they expect to begin receiving those documents in three months, once the State Department determines whether the Weiner documents are government or personal records. Last November, the State Department was ordered to turn over 500 pages of Clinton-related documents a month to Judicial Watch.Watch the latest video at video.foxnews.com

 The Death Spiral Of Financialization -- The primary driver of our economy--financialization--is in a death spiral. Financialization substitutes expansion of interest, leverage and speculation for real-world expansion of goods, services and wages. Financial "wealth" created by leveraging more debt on a base of real-world collateral that doesn't actually produce more goods and services flows to the top of the wealth-power pyramid, driving the soaring wealth-income inequality we see everywhere in the global economy. As this phantom wealth pours into assets such as stocks, bonds and real estate, it has pushed the value of these assets into the stratosphere, out of reach of the bottom 95% whose incomes have stagnated for the past 16 years. The core problem with financialization is that it requires ever more extreme policies to keep it going. These policies are mutually reinforcing, meaning that the total impact becomes geometric rather than linear. Put another way, the fragility and instability generated by each new policy extreme reinforces the negative consequences of previous policies. These extremes don't just pile up like bricks--they fuel a parabolic rise in systemic leverage, debt, speculation, fragility, distortion and instability. This accretive, mutually reinforcing, geometric rise in systemic fragility that is the unavoidable output of financialization is poorly understood, not just by laypeople but by the financial punditry and professional economists. Gordon Long and I cover the policy extremes which have locked our financial system into a death spiral in a new 50-minute presentation, The Road to Financialization. Each "fix" that boosts leverage and debt fuels a speculative boom that then fizzles when the distortions introduced by financialization destabilize the real economy's credit-business cycle. Each new policy destroys another level of prudent fiscal/financial discipline. The discipline of sound money? Gone. The discipline of limited leverage? Gone. The discipline of prudent lending? Gone. The discipline of mark-to-market discovery of the price of collateral? Gone. The discipline of separating investment and commercial banking, i.e. Glass-Steagall? Gone. The discipline of open-market interest rates? Gone. The discipline of losses being absorbed by those who generated the loans? Gone. And so on: every structural source of discipline has been eradicated, weakened or hollowed out. Financialization has consumed the nation's seed corn, and the harvest of instability is ripening in the fields of finance and the real economy alike.

House lawmakers lining up ‘buffet’ of reg relief bills - After passing a comprehensive regulatory relief package last month, House lawmakers are lining up a series of smaller bills in the hopes it will help enable senators to enact at least some provisions soon.  The House Financial Services Committee held a hearing last week on a series of targeted relief bills, many of which enjoy bipartisan support, and one of which was already part of the larger legislation. The goal is to give Senate Banking Committee Chairman Mike Crapo, R-Idaho, more leeway when he tries to craft a relief measure.

Big Four Audit Firms Enjoy a “Too Few to Fail” Regulatory Hall Pass - Francine McKenna - The last time the United States government officially scrutinized the level of concentration in the market for public company audits was January 2008. Despite more than five years of unprecedented change in the audit industry following the dissolution of one of the five largest audit firms in the world, Arthur Andersen, and the passage of the Sarbanes-Oxley Act in 2002, the General Accounting Office came to the same conclusion it had reached in a study concluded in 2003: The audit market for large public companies was still highly concentrated. However, the level of market concentration “did not appear to be having a significant negative impact overall.” The 2008 concentration report hit shortly before the financial crisis was at its peak, bringing the largest waves of failures, forced acquisitions, and effective nationalizations of major banks and financial services all over the world. Almost all of the largest mortgage originators, global banks, and investment firms affected by the crisis were audited by one of the Big Four remaining firms and some, like Freddie Mac, had been audited by Arthur Andersen before its demise.  The GAO said in 2008 that it was “unlikely” that concentration in the audit market for large public companies would be reduced in the near term, either by the development of new capabilities or by mergers of the next tier and smaller firms that would result in a firm with the level of expertise and critical mass needed to perform multinational audits. The GAO report authors admitted that “there was no general consensus for various proposals put forth for addressing concentration.” The failure of Enron and subsequent dissolution of Arthur Andersen—the firm never filed for bankruptcy but gave up its licenses as a result of its criminal conviction—led to significant changes for public reporting and auditing but not much change in the concentration of audit market power among the remaining Big Four global firms: Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers.

OCC to take first step toward rolling back Volcker Rule — The Office of the Comptroller of the Currency is planning to ask for public feedback on a proposal to roll back the Volcker Rule, which prohibits banks from proprietary trading and other speculative activities, the agency's director said Wednesday. “We are going to, whether with others or by ourselves, push forward and seek public input on what can be done” to roll back the rule, the acting comptroller of the currency, Keith Noreika, said after a speech at the Exchequer Club luncheon addressing his agency’s fintech charter.

Warren calls OCC's Noreika one of Trump's 'swamp creatures' - American Banker — Sen. Elizabeth Warren, D-Mass., sharply criticized the new acting head of the Office of the Comptroller of the Currency as part of a report Thursday detailing how industry executives and lobbyists have joined the Trump administration. During testimony at the Senate Banking Committee last month, acting Comptroller of the Currency Keith Noreika said he did not have to sign an ethics pledge, as required of most agency appointees, given his special status as a temporary appointment. That bothered Democrats on the panel, including Warren, who said Noreika's appointment was proof that President Trump was not serious about his pledges to "drain the swamp."

BNP Fined $246MM After Its Traders Were Found To Still Use Chat Rooms To Rig FX Trading --Two months after the Fed fined Deutsche Bank a paltry $157 million for manipulating currency markets after the German bank's traders were found to be using "chat rooms" to rig FX trading, we learn that there was more gambling going on here, and on Monday the Fed announced that it will fine French BNP Paribas $246 million "for the firm's unsafe and unsound practices in the foreign exchange (FX) markets."According to the press release, the Board levied the fine "after finding deficiencies in BNP Paribas's oversight of, and internal controls over, FX traders who buy and sell U.S. dollars and foreign currencies for the firm's own accounts and for customers." And, not surprisingly we once again find that FX rigging was confined chat rooms: Perhaps one day the Fed will realize that as long as its keep settling for paltry amounts that are a fraction of how much the banks make by violating the rules (and yes, participating in chat rooms), this type of behavior will never end. That day won't be today. In its complaint, the Fed notes that during the Review Period:

  • BNPP and BNPP Securities lacked adequate governance, risk management,
    compliance, and audit policies and procedures to ensure that BNPP’s Covered FX Activities complied with safe and sound banking practices and applicable internal policies;
  • Certain FX traders in the spot market at BNPP, including BNPP Securities routinely communicated with FX traders at other financial institutions through chatrooms on
    electronic messaging platforms accessible by traders at multiple institutions.
  • BNPP’s deficient policies and procedures prevented it from detecting and addressing unsafe and unsound conduct by certain FX traders, including in communications by traders in multibank chatrooms, consisting of:  disclosures of trading positions and discussions of coordinated trading strategies with traders of other institutions; discussions about anticipated FX benchmark fix-related trading and submissions with traders of other institutions; disclosures to traders of other institutions of confidential customer information of BNPP;  discussions regarding bid/offer spreads offered to FX customers with traders of other institutions; and discussions of trading in a manner to trigger or defend certain FX barrier options within BNPP, in order to benefit BNPP.

Today's action is a follow up to the Fed's previous injunction from January 2017 in which the "regulator" permanently prohibited former BNP Paribas trader Jason Katz from participating in the banking industry for his manipulation of FX prices. Here is a blurb from Katz' admission in early January, courtesy of Bloomberg

US decides to drop criminal charges against former JPMorgan traders in 'London Whale' case: The U.S. has decided to drop criminal charges against former JPMorgan derivatives traders Javier Martin-Artajo and Julien Grout in the 2012 "London Whale" case. The two were charged with conspiring to falsify books and records of JPMorgan, to commit wire fraud, to make false filings with the Securities and Exchange Commission and to commit securities fraud. Martin-Artajo and Grout live outside of the U.S. and have refused to appear in court, according to court documents, and efforts to secure their appearance, including through extradition, have "been unsuccessful or deemed futile." The "London Whale" case lost JPMorgan nearly $6.2 billion in 2012. The U.S. had anticipated using testimony from Bruno Iksil, a former colleague of the two defendents, who became known as the "London whale." However, after reviewing Ikskil's statements and writings, prosecutors decided they could no longer rely on his testimony. Joon Kim, the acting U.S. Attorney in Manhattan, asked a federal judge to issue a formal order dropping the fraud, conspiracy and other charges against Martin-Artajo and Grout, who were accused of hiding losses generated by Iksil. They were indicted in Sept. 2013.

Meet The Only Private Equity Fund In History To Raise $2 Billion From Investors And Return $0 - Sir Richard Branson once said that the quickest way to become a millionaire was to take a billion dollars and buy an airline. But, as EnerVest Ltd, a Houston-based private equity firm that focuses on energy investments, recently found out, there's more than one way to go broke investing in extremely volatile sectors.  As the Wall Street Journal points out today, EnerVest is a $2 billion private-equity fund that borrowed heavily at the height of the oil boom to scoop up oil and gas wells.  Unfortunately, shortly after those purchases were made, energy prices plunged leaving the fund's equity, supplied primarily by pensions, endowments and charitable foundations, worth essentially nothing. The outcome will leave investors in the 2013 fund with, at most, pennies for every dollar they invested, the people said. At least one investor, the Orange County Employees Retirement System, already has marked its investment down to zero, according to a pension document.Though private-equity investments regularly flop, industry consultants and fund investors say this situation could mark the first time that a fund larger than $1 billion has lost essentially all of its value. EnerVest’s collapse shows how debt taken on during the drilling boom continues to haunt energy investors three years after a glut of fuel sent prices spiraling down.

 How can we stop algorithms telling lies? - Cathy O’Neil - Lots of algorithms go bad unintentionally. Some of them, however, are made to be criminal. Algorithms are formal rules, usually written in computer code, that make predictions on future events based on historical patterns. To train an algorithm you need to provide historical data as well as a definition of success. We’ve seen finance get taken over by algorithms in the past few decades. Trading algorithms use historical data to predict movements in the market. Success for that algorithm is a predictable market move, and the algorithm is vigilant for patterns that have historically happened just before that move. Financial risk models also use historical market changes to predict cataclysmic events in a more global sense, so not for an individual stock but rather for an entire market. The risk model for mortgage-backed securities was famously bad – intentionally so – and the trust in those models can be blamed for much of the scale and subsequent damage wrought by the 2008 financial crisis. Since 2008, we’ve heard less from algorithms in finance, and much more from big data algorithms. The target of this new generation of algorithms has been shifted from abstract markets to individuals. But the underlying functionality is the same: collect historical data about people, profiling their behaviour online, location, or answers to questionnaires, and use that massive dataset to predict their future purchases, voting behaviour, or work ethic.  Getting into college, getting a job, being assessed as a worker, getting a credit card or insurance, voting, and even policing are in many cases done algorithmically. Moreover, the technology introduced into these systematic decisions is largely opaque, even to their creators, and has so far largely escaped meaningful regulation, even when it fails. That makes the question of which of these algorithms are working on our behalf even more important and urgent.

Why banks should care about Trump's climate-change withdrawal  - Large banks — in addition to cities and states — have been among those trying to step up policies to try and counter the effects of the U.S. policy. Earlier this month, the United Nations Environment Initiative announced a pilot project launched by 11 global banks to strengthen environment-related reporting standards.With all that being said, President Trump’s decision stands to dramatically alter the trajectory of U.S. climate policy and will quite possibly impact broader global mitigation efforts. So, what does this decision mean for financial institutions? And in particular, how will it affect the risks they face and the returns they seek? Let us begin by considering what is, perhaps, the most obvious climate change related risk: the physical risk. Insurers, in particular, are well aware of the increased extreme weather-related losses associated with climate change. The number of worldwide weather-related loss events has more than tripled since the 1980s, resulting in an increase in inflation-adjusted insured losses of approximately $40 billion.But financial institutions’ real estate-related investments are also vulnerable to losses caused by weather-related physical damages and the subsequent operational disruptions they may cause. In addition, as climate change increases the frequency and/or severity of damage to real estate assets, commercial and residential mortgage default rates may rise and collateral values may fall, particularly in geographical areas prone to fires, flooding and other extreme weather events. Beyond the direct physical risks of climate change there are secondary physical risks which include but are not limited to the disruption of global supply chains, resource scarcity and potential macroeconomic or political shocks. These risks can reduce economic growth and weaken financial markets.

Regional banks push bill to replace SIFI asset threshold with risk score - — House Republicans and regional banks are hoping that recent comments by Federal Reserve Board Chair Janet Yellen can add fuel to their efforts to replace the $50 billion asset threshold for systemically important banks with an international regulatory indicator test.  Rep. Blaine Luetkemeyer, R-Mo., reintroduced a bill Wednesday that would use the Basel Committee’s assessment methodology to determine which banks should be subject to standards for systemically important financial institutions. The Fed already uses a similar approach to measure bank risk.

Fed interest payments to banks are back in House GOP’s crosshairs — House Republicans are ramping up their criticism of the Federal Reserve for making interest payments to member banks on excess reserves, and may have identified a way to counter the central bank’s longstanding claim that the payments are critical to executing monetary policy.  The issue is to be debated Thursday at a Financial Services Committee hearing. Last week, Chairman Jeb Hensarling told Fed Chair Janet Yellen that interest on excess reserves, or IOER, should "not become a permanent tool of monetary policy."

How R’s on the House Finance Committee want to go after the Fed’s independence, and why that’s a terrible idea. -- Jared Bernstein --I testified this AM at the House Finance subcommittee on monetary and fiscal policy. Three R witnesses and yours truly, so I didn’t get to say all I wanted—after all, monetary and fiscal covers a lot of ground!  Here’s my testimony, which elaborates on these three points:

  • –Contrary to some of the claims made at the hearing, the Fed’s interventions were highly effective in reducing the damage from the Great Recession, reflating credit markets, and pulling the recovery forward. The Fed’s not perfect, for sure, but a lot of people and businesses would be a lot worse off today if the Fed had sat on the sidelines.
  • –Under certain conditions, particularly recessions or weak, demand-constrained recoveries, monetary and fiscal policy are critical complements. In this regard, the pivot to austerity budgets by both us (starting in around 2010) and European economies was a lasting economic mistake.  Ben Bernanke made this very point to this very committee back in 2013:“Although monetary policy is working to promote a more robust recovery, it cannot carry the entire burden of ensuring a speedier return to economic health. The economy’s performance both over the near term and in the longer run will depend importantly on the course of fiscal policy.”
  • –Title X of the CHOICE Act, the brainchild of the R’s on this committee, proposes to micromanage the Federal Reserve in ways that would be hugely detrimental to its independence and its ability to carry out its mandates. As a side point, perhaps interesting to monetary wonks here at OTE, the title’s insistence on the 1993 vintage of the Taylor rule is out of step with much research on the variables, values, and coefficients that would go into such a rule today.

I didn’t get to push back on an issue that conservatives on the committee were, IMHO, way too overheated about: the Fed’s payments of interest on excess reserves, or IOER. This was cast as a big, distortionary intrusion into private lending markets (see George Seglin’s testimony). I don’t see that at all.

 Goldman Wins Patent For Its Own Cryptocoin Technology -- Goldman Sachs has clinched an important victory in its race to transition from a stodgy investment bank into a fintech powerhouse: it was awarded a patent for its proposed "SETLcoin" cryptocurrency settlement system, according to CoinDesk, the first to report on the patent.“The US Patent and Trademark Office (USPTO) published Goldman's patent on July 11, entitled "Cryptographic currency for securities settlement". The bank made headlines when the existence of the patent application was revealed in late 2015.”The concept envisions a system for settling securities trades using cryptocurrency instead of cash or other cash equivalents. When filed in December of 2015, the application notably outlined methods for exchanging SETLcoins for digitized stocks for firms like Google and Microsoft, as well as cryptocurrencies, naming bitcoin and litecoin in particular, as CoinDesk explains.In its patent application, Goldman highlights the shortcomings of the clearing and settlement system, explaining how counterparties are forced to bear unnecessary risk during the period between when a trade is made and when it is settled, which can be up to three days for stock trades. A number of risks arise for the parties during the settlement interval that follows trading and precedes settlement. For example, after a trade for a security and before settlement, the rights of the purchaser are contractual and therefore personal; however, because such rights are merely personal, these rights are at risk in the event of the insolvency of the either counterparty to the trade. After settlement, the purchaser owns the securities, and the purchaser` rights are proprietary. Clearing involves modifying contractual obligations to facilitate settlement. Clearing houses, such as the National Securities Clearing Corporation (NSCC), provide clearing, settlement, risk management, central counterparty services, and a guarantee of completion for certain transactions (e.g., broker-to-broker trades, depositary receipts, and exchange-traded funds), and they serve as the central counterparty for trades in the U.S. securities markets. In the United States, the settlement date for marketable stocks can be an extended length of time--three business days after the trade is executed and for listed options and government securities it is usually one day after the execution.” Then Goldman describes how cryptocurrencies like bitcoin work.

IBM upgrades mainframe to encrypt data at high speeds -  IBM has upgraded System Z—the giant mainframe that until now looked like Darth Vader’s refrigerator— to be able to run more than 12 billion encrypted transactions per day and encrypt all data associated with any application, cloud service or database all the time.   The mainframe now meets new data security and privacy requirements. This matters to banks because the need to encrypt data is increasing. Banks have had to hash personally identifiable customer information, such as address, date of birth and Social Security number, since 2003, when states began rolling out consumer data protection laws as a result of some high-profile breaches. But recently there have been calls to go further. The New York State Department of Financial Services’ latest cybersecurity rules say that starting next year, banks will have to encrypt all nonpublic data in transit and at rest. Nonpublic data is almost everything, lawyers say.  U.S. federal regulators are also eyeing it, but have been more vague. “Management should implement the type and level of encryption commensurate with the sensitivity of the information,” the Federal Financial Institutions Examination Council’s cybersecurity guidance says. Europe’s General Data Protection Rule, which affects every bank that has a European client, will require organizations to report data breaches within 72 hours or face fines of up to 4% of annual revenues unless the organization can demonstrate that data was encrypted and the keys were protected.  And a lack of encryption has been making cybercriminals’ jobs easier. The IBM X-Force Threat Intelligence Index found that more than 4 billion records were stolen in 2016, a 500% increase from 2015, and only 4% of that data was encrypted.

OCC's Noreika endorses fintech charter, slams state regulators  — Acting Comptroller of the Currency Keith Noreika finally revealed his view of the agency's controversial fintech charter on Wednesday, making it clear he supported the effort while also sharply criticizing those against the endeavor. “Quite simply, I think it is a good idea that deserves the thorough analysis and the careful consideration that we are giving it," he said in a speech to the Exchequer Club. “Companies that offer banking products and services should be allowed to apply for national bank charters so that they can pursue their businesses on a national scale if they choose, and if they meet the criteria and standards for doing so."

Fed panel puts faster payments on three-year track - A panel convened by the Federal Reserve has established an ambitious new goal: By 2020, anyone with a bank account in the United States should be able to receive payments that are highly secure and delivered in something close to real time. The three-year target is disclosed in the final report of a task force organized by the Fed two years ago. Its members include representatives of big banks, small banks, technology companies, consumer advocacy groups and government agencies.

Trump appointee wants to delay rule that lets consumers bring class-action suits against banks -- A new federal rule allowing Americans to file class-action suits against banks instead of being forced into private arbitration has become entangled in a dispute between Trump and Obama appointees over consumer protection. The disagreement poses another potential obstacle to the rule unveiled last week by the Consumer Financial Protection Bureau over the strong objections of the banking industry. Some congressional Republicans already have vowed to pass legislation repealing the regulation before it takes effect early next year.Now, Keith Noreika, the acting comptroller of the currency, has asked the bureau to delay implementing the arbitration rule until his staff can determine whether it would threaten the health of the banking system.The rule, which the bureau has been working on for more than two years, would not ban clauses in checking account, credit card and other banking agreements that say disputes between companies and customers must be dealt with privately rather than in court.The determinations of an arbitrator are binding and consumer advocates say most decisions favor the company. The private proceedings also allow banks to deal with problems quietly rather than address widespread issues.The new rule would ban agreements that block consumers from banding together to bring class-action cases. The CFPB argued that such cases would help hold banks accountable.Noreika, a financial services lawyer appointed by Trump in May, wrote to CFPB Director Richard Cordray on Monday asking him to delay publishing the rule in the Federal Register — a move that starts the implementation clock ticking.Noreika said he wanted the halt “until my staff has had a full and fair opportunity to analyze the CFPB data so that I am able to fulfill my safety and soundness obligations.”

It’s OCC vs. CFPB in tug of war over arbitration rule -- The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau are engaging in a high-stakes battle over the latter agency's effort to rein in mandatory arbitration clauses, in a rare public spat between federal regulators. Acting Comptroller Keith Noreika provoked the fight by publicly criticizing the CFPB's final arbitration rule, requesting that it delay its publication in the Federal Register until after the OCC has the chance to analyze and study its impact on safety and soundness. Yet his demands came late in the process, after a lengthy rule-writing effort by the CFPB in which the OCC never previously indicated any concerns with the plan. The OCC also has not offered any evidence that the CFPB rule, which would largely ban mandatory arbitration clauses, poses a threat to banks.

GOP lawmakers introduce measures to repeal consumer bureau arbitration rule | TheHill: Senate and House lawmakers introduced companion measures on Thursday to repeal the Consumer Financial Protection Bureau’s (CFPB) recently issued arbitration rule. More than a dozen Republican senators, including most GOP members of the Senate Banking Committee, introduced a resolution Thursday morning to repeal the CFPB rule under the Congressional Review Act (CRA). GOP lawmakers on the House Financial Services Committee announced that they’d introduce an identical resolution soon after. No Democrats joined either effort. The new CFPB rule forces companies to write arbitration clauses in ways that wouldn’t prevent consumers from joining class-action lawsuits. It also forces financial firms to hand over information about “initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration.”The CFPB will also collect “correspondence companies receive from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to follow the arbitrator’s fairness standards,” it said Monday. The agency said the review will allow the CFPB to judge whether the process is fair and added that redacted information received would be published in July 2019. The CRA allows lawmakers to repeal regulations released by executive branch agencies within 60 days of their finalization. Republicans in both chambers vowed to repeal the CFPB’s arbitration rule within moments of its release, and major business and bank lobbying groups promised to support those efforts. The House is expected to easily pass a repeal resolution, but the slim GOP Senate majority could derail the effort. Senate Banking Committee Chairman Mike Crapo (R-Idaho) said it was essential for Congress to repeal the rule, which he called another example of the CFPB’s “lack of accountability.” The rule is the latest flashpoint in the heated relationship between the CFPB and Republicans. .

Why CFPB’s arbitration rule is essential (two words: Wells Fargo) The Consumer Financial Protection Bureau’s long-awaited financial arbitration rule is being opposed by banking lobbyists, and a resolution has already been filed in Congress to block it. This would be a grave mistake. The rule, which will take effect next year, will forbid forced arbitration clauses that ban class actions in contracts governing bank accounts, credit cards, student loans, payday loans, debt collection, credit reporting and auto loans originated or bought by finance companies. Financial institutions should support the rule, which will right the scales of justice and discourage bad actors from dragging down the industry.  A look at the Wells Fargo fake-accounts scandal — where the bank is using arbitration clauses to block class actions over accounts people never authorized — reveals why the final rule is much-needed. It’s outrageous that banks and other companies can violate the law, harm millions of people and then tell them: “Too bad. You signed away your day in court. Not even an arbitrator can look at how many people we harmed or hold us fully accountable.”  True, Wells Fargo has chosen to settle one of the fake account cases as a class action (while still trying to force arbitration in others). But it is the rare case that receives the degree of publicity and public pressure that the Wells Fargo case has. Moreover, the threat of forced arbitration undoubtedly helped the bank negotiate a lower settlement with the plaintiffs. In another case involving unfair and fraudulent practices to increase overdraft fees, Wells Fargo (the lone big bank still fighting these charges) is trying to defeat a decadelong 49-state class action by forcing one-by-one arbitrations.Forced arbitration is not a different way of resolving disputes; it is a way of blocking justice. Indeed, a 2015 CFPB study found few people with small claims pursue their claims individually, either in court or arbitration. More troubling, companies can easily pay off those people who do pursue their claims. Then those same companies can keep violating the law at scale and hold onto the profits from those customers who haven’t figured out what happened or made the effort to pursue a claim.

CFPB scores highly in new poll — even among Republicans — Most U.S. voters, including those who identify as Republicans, support the Dodd-Frank financial reform law and the Consumer Financial Protection Bureau, according to a poll conducted in late June and commissioned by consumer advocates. The poll of 1,000 likely voters, which was roughly divided in thirds between Democrats, independents and Republicans, found that 74% supported the CFPB and its mission. That included 66% of those who identified as Republicans, 77% of those who claimed to be independents and 85% of those who identified as Democrats. Only 15% of all respondents said they opposed the CFPB.

If CFPB head won't serve full term, he should resign: Hensarling  - Rep. Jeb Hensarling on Friday continued the drumbeat of Republican attacks on the head of the Consumer Financial Protection Bureau, this time saying Richard Cordray should resign if he will not commit to serving his full term. “If Director Cordray wishes to issue midnight rules, to hire or adjust the status of CFPB employees, to obligate CFPB funds, or to accelerate agency investigations, he should first commit to serving his full term," Hensarling said in a press release. "If he will not do so, the honorable course of action would be to resign and leave such decisions to his successor.”

Judge tosses CFPB suit claiming Kentucky law firm paid kickbacks through joint-venture title firms -- A federal judge has sided with a Kentucky law firm sued by the Consumer Financial Protection Bureau for alleged kickbacks for real-estate work referrals.U.S. District Judge Charles Simpson III found no violation of the Real Estate Settlement Procedures Act and tossed the suit against the law firm, Borders & Borders of Louisville. The National Law Journal (sub. req.) covered the July 13 decision. The CFPB had claimed Borders & Borders paid kickbacks through nine title insurance companies it operated as joint ventures with local real-estate agents and mortgage brokers. The bureau claimed the split-profits arrangement violated the RESPA, which prohibits kickbacks for business referrals in connection with federally related mortgage loans. Simpson said the law firm qualified for safe harbor under RESPA because it had disclosed the affiliated business arrangement to borrowers and buyers, and its customers were not required to use the title insurance agency.

Plastic-Versus-Cash Battle Heats Up After Visa, Mastercard Deals --The dollar bill, that long-time rival of credit-card giants, is under attack once again. After years of fighting to get their cards accepted in stores, Visa Inc. and Mastercard Inc. are stepping up efforts to get merchants and consumers to move to a cashless world. The idea is simple and potentially very profitable: Get people to use their credit cards rather than cash for more purchases -- and, eventually, all transactions. In that future, card networks and other electronic payment systems would essentially get a slice of every transaction. Visa and Mastercard already have made big inroads in expanding credit-card usage. They handled $4.3 trillion in payments in the U.S. last year, more than double from a decade ago. Still, the amount of currency in circulation also has doubled in that period, and cash remains the most widely used payment instrument in the U.S. Last week, Visa upped the ante in its push to put cash out of business. The network said that it will give 50 restaurants that agree to ditch cash for good a $10,000 reward to spend on marketing and point-of-sale technology. 

New U.S. Subprime Boom, Same Old Sins: Auto Defaults Are Soaring - It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud. Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017.  A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide. Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis. But since the Great Recession, business has exploded. In 2009, $2.5 billion of new subprime auto bonds were sold. In 2016, $26 billion were, topping average pre-crisis levels, according to Wells Fargo & Co. Few things capture this phenomenon like the partnership between Fiat Chrysler Automobiles NV and Banco Santander SA. Since 2013, as U.S. car sales soared, the two have built one of the industry’s most powerful subprime machines. Details of that relationship, pieced together from court documents, regulatory filings and interviews with industry insiders, lay bare some of the excesses of today’s subprime auto boom. Wall Street has rewarded lax lending standards that let people get loans without anyone verifying incomes or job histories. For instance, Santander recently vetted incomes on fewer than one out of every 10 loans packaged into $1 billion of bonds, according to Moody’s Investors Service. The largest portion were for Chrysler vehicles. Some of their dealers, meantime, gamed the loan application process so low-income borrowers could drive off in new cars, state prosecutors said in court documents. Through it all, Wall Street’s appetite for high-yield investments has kept the loans -- and the bonds -- coming. Santander says it has cut ties with hundreds of dealerships that were pushing unsound loans, some of which defaulted as soon as the first payment. At the same time, Santander plans to increase control over its U.S. subprime auto unit, Santander Consumer USA Holdings Inc., people familiar with the matter said.

As Farmers Go Broke, John Deere Ramps Up It's Captive Financing Operation To Keep The Ag Party Going --So what do you do when your John Deere and your entire business revolves around selling really expensive equipment to farmers who have been absolutely decimated financially by low crop prices and can no longer convince commercial banks that they're worthy of additional debt needed to buy fancy new tractors?  Well, you take some plays from the automotive industry, that's what.  Here's how it works:

    • Step 1:  Setup a captive financing arm to underwrite all of the credit risk that no reasonable commercial ag bank would touch with a 10 foot pole.
    • Step 2:  Boost your tractor sales volumes by financing every farmer who walks through your door with a soybean dream and pulse.
    • Step 3:  When you run out of farmers willing to buy your brand new shiny green tractors then just start selling all your production volume to yourself and then lease it to customers at an attractive price.  This way you can still show sales growth and never have to cut production volume.
    • Step 4:  Finally, when it all goes horribly wrong because used tractor prices crash due to the flood of off-lease volume and brings down the new market with it then you take a one-time charge to write-off the losses, wall streets forgives you...it was just a 1x charge, right...and then you promptly rinse and repeat.

From the looks of the charts below, we'd say John Deere is currently on the tail end of 'Step 3' as loan and lease balances are soaring and write-offs are just starting to spike.

Bankers to get break on appraisals for CRE loans under new regulatory plan - Federal regulators issued a proposal Tuesday that would increase the threshold at which commercial real estate transactions require an appraisal, a move that could give some lenders sizable relief. “Bankers in rural parts of the country [have] expressed significant concerns with delays in completing real estate transactions due to a scarcity of appraisers in those areas,” Federal Deposit Insurance Corp. Chairman Martin Gruenberg said at a board meeting to discuss the plan on Tuesday. “I think it is fair to say that this proposal will be responsive to those concerns, raising the commercial real estate threshold from $250,000 to $400,000 as proposed, and thus increasing the overall percentage of commercial real estate transactions exempt from needing appraisals from 17% to 28%.”

Small lenders fear GSE reform would resurrect bulk discounts for big banks — The discounts that Fannie Mae and Freddie Mac used to offer large originators for selling them bulk bundles of mortgages continue to haunt small lenders, who worry a new housing finance system could revive the practice. At a Senate Banking Committee hearing on Thursday, bank and credit union executives said they frequently felt sidelined by the government-sponsored enterprises in favor of the biggest U.S. banks because of volume discounts and other practices. They also accused big banks of not passing any savings from their sweetheart deals on to consumers.

House appropriators target PACE loans in HUD budget plan — House appropriators are trying to put the brakes on the Property Assessed Clean Energy program, which finances energy upgrades on homes through Federal Housing Administration-backed loans. The House Budget Committee approved on Monday a 2018 fiscal budget for the Department of Housing and Urban Development that would prohibit the FHA from "purchasing, insuring or guaranteeing a property that has a PACE loan in the first lien position."

Black Knight: Mortgage Delinquencies mostly unchanged in June --From Black Knight: Black Knight’ First Look at June 2017 Mortgage Data: Delinquencies Hold Steady Despite Seasonal Pressure; Low Interest Rates Help Prepayments Continue to Climb

• Despite upward seasonal pressure, mortgage delinquencies held steady at 3.8 percent in June
• While total non-current inventory saw a three percent seasonal rise over Q2 2017, the inventory of serious delinquencies (loans 90 or more days past due) and active foreclosures fell by seven percent
• In total, serious delinquencies and active foreclosures have declined by 17 percent (nearly 200,000 loans) this year
• Low interest rates helped push prepayment activity up another 5.3 percent in June, following May’s 23 percent rise
According to Black Knight's First Look report for June, the percent of loans delinquent increased slightly in June compared to May, and declined 11.8% year-over-year.
The percent of loans in the foreclosure process declined 2.7% in June and were down 27.0% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.80% in June, up from 3.79% in May.The percent of loans in the foreclosure process declined in June to 0.81%.  The number of delinquent properties, but not in foreclosure, is down 246,000 properties year-over-year, and the number of properties in the foreclosure process is down 148,000 properties year-over-year.

First-mortgage defaults inch down another notch - First-lien mortgage defaults in June were down 4 basis points from the previous month and 5 basis points from where they were the previous year at 0.6%. At 0.49%, second mortgage defaults were down 5 basis points from May, but defaults on seconds were slightly higher than they were a year ago, when they were 0.48%, according to the S&P/Experian Consumer Credit Default Index in New York.

Purchases Of US Real Estate By Foreigners Hit All-Time High In 2016 --In a testament to Chinese oligarchs, criminals, money launderers and pretty much anyone who is desperate to park their cash as far away from the mainland as possible, purchases of US real estate by foreign buyers surged to an all-time high in 2016, according to data from the National Association of Realtors via CNBC.Foreign purchases of US residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume last year, with Chinese buyers leading the pack, followed by buyers from Canada, the United Kingdom, Mexico and India. Meanwhile, Russian buyers made up barely 1 percent of the purchases. Foreign buyers closed on $153 billion worth of US residential properties between April 2016 and March 2017, a 49 percent jump from the period a year earlier, according to the NAR. That surpasses the previous high, set in 2015. Foreign sales accounted for 10 percent of all existing home sales by dollar volume and 5 percent by number of properties. In total, foreign buyers purchased 284,455 homes, up 32 percent from the previous year.

MBA: Mortgage Applications Increase in Latest Weekly Survey -- From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 14, 2017. Last week’s results included an adjustment for the Fourth of July holiday.... The Refinance Index increased 13 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 27 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) remained unchanged at 4.22 percent, with points decreasing to 0.31 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.

 Rental Growth Is Rapidly Decelerating Across The US -- Single-family rents, as measured by the CoreLogic Single-Family Repeat Rent Index (SFRI), climbed steadily between 2010 and 2016. However, as CoreLogic reported last week, rent growth has seen a material decline during the last 18 months. The index shows that rent growth has been slowly decelerating (Figure 1) since February 2016 when it peaked at a 4.3% year-over-year increase. As of May 2017, single-family rents increased 2.9% year over year, a 1.4% point deceleration since the February 2016 peak. The index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. Figure 1 shows that the index’s overall growth was pulled down by the high-end rental market, defined as properties with rent amounts of 125% or more of a region’s median rent. Rents on higher-priced rental homes increased 2% year over year in May 2017, down from a gain of 3.1% in May 2016. Growth in the low-end market, defined as properties with rents less than 75% of the regional median rent, increased 4.5% in May 2017, down from a gain of 5.6% in May 2016. Rent growth varies significantly across metro areas and over time. Figure 2 shows the year-over-year change in the repeat rent index for 20 large metro areas in May 2017.

Housing Starts increased to 1.215 Million Annual Rate in June --From the Census Bureau: Permits, Starts and Completions - Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,215,000. This is 8.3 percent above the revised May estimate of 1,122,000 and is 2.1 percent above the June 2016 rate of 1,190,000. Single-family housing starts in June were at a rate of 849,000; this is 6.3 percent above the revised May figure of 799,000. The June rate for units in buildings with five units or more was 359,000.  Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,254,000. This is 7.4 percent above the revised May rate of 1,168,000 and is 5.1 percent above the June 2016 rate of 1,193,000. Single-family authorizations in June were at a rate of 811,000; this is 4.1 percent above the revised May figure of 779,000. Authorizations of units in buildings with five units or more were at a rate of 409,000 in June. The first graph shows single and multi-family housing starts for the last several years.Multi-family starts (red, 2+ units) increased in June compared to May.  Multi-family starts are down 13% year-over-year.Multi-family is volatile month-to-month, but has been mostly moving sideways over the last couple of years. Single-family starts (blue) increased in May, and are up 10.3% year-over-year.   The second graph shows total and single unit starts since 1968.  The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically low), Total housing starts in June were above expectations, and starts for May were revised up.    This was a solid report. 

New Residential Building Permits: June Bounces Back - The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for June new residential building permits. The latest reading of 1.254M was an increase from 1.168M in May and above the Investing.com forecast of 1.200M. Here is the opening of this morning's monthly report:  Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,254,000. This is 7.4 percent (±1.1 percent) above the revised May rate of 1,168,000 and is 5.1 percent (±1.4 percent) above the June 2016 rate of 1,193,000. Single-family authorizations in June were at a rate of 811,000; this is 4.1 percent (±0.8 percent) above the revised May figure of 779,000. Authorizations of units in buildings with five units or more were at a rate of 409,000 in June. Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,215,000. This is 8.3 percent (±15.8 percent)* above the revised May estimate of 1,122,000 and is 2.1 percent (±14.0 percent)* above the June 2016 rate of 1,190,000. Single-family housing starts in June were at a rate of 849,000; this is 6.3 percent (±13.5 percent)* above the revised May figure of 799,000. The June rate for units in buildings with five units or more was 359,000.[link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Housing improves, but still not positive: Last month the housing permits and starts report was poor enough for me to score it a negative. Further, because neither permits nor starts had made new highs since winter, it was sufficient to tip the scales in how I look at the long leading indicators. Today's report for June was improved, enough for me to score it a neutral, but because it is still below winter's levels, I cannot score it a positive, and it does not change my overall long term outlook. First, here's the graph. You can ignore completions, which lag, and just focus on permits and starts: It is immediately apparent that both improved, but both remain below their levels from the early months of this year. Here is the chart for starts: June's level remains below that of last October, December, January, and February. The three month moving average, which smooths out much of the volatility, is 1,164, which is an improvement from last month's 1,153, but below that of the previous 5 months. The moving average has not made a new high in 4 months. Here is the chart for permits: June;s overall level is below that of 6 of the last 12 months. For the much less volatile single family permits, the level remains below that of last December, February, and March. The two permits metrics have not set new highs in 5 and 4 months, respectively. Bottom line: June's improvement is enough to move housing from a negative to a neutral, but because we still have not had new best readings in corporate profits or interest rates in over a year, neutral housing is enough for me to continue to have a neutral long term forecast. Because of the situation with interest rates, I expect housing to remain neutral or negative for the next few months. 

Comments on June Housing Starts --The housing starts report released this morning showed starts were up 8.3% in June compared to May, and were up 2.1% year-over-year compared to June 2016.  This was a solid report and was above the consensus forecast. Note that multi-family starts are volatile month-to-month, and has seen wild swings over the last year.  This first graph shows the month to month comparison between 2016 (blue) and 2017 (red). Starts were up 2.1% in June 2017 compared to June 2016, and starts are up 6.0% year-to-date. Note that single family starts are up 10.7% year-to-date, and the weakness (as expected) has been in multi-family starts.My guess is starts will increase around 3% to 7% in 2017.Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). These graphs use a 12 month rolling total for NSA starts and completions.  The blue line is for multifamily starts and the red line is for multifamily completions.    Completions lag starts by about 12 months.I think the growth in multi-family starts is behind us - in fact, multi-family starts probably peaked in June 2015 (at 510 thousand SAAR) - although I expect solid multi-family starts for a few more years (based on demographics). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. ‘

NAHB: Builder Confidence decreased to 64 in July  --The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 64 in July, down from 66 in June. Any number above 50 indicates that more builders view sales conditions as good than poor.  From NAHB: Builder Confidence Slips Two Points in July, Remains Solid Builder confidence in the market for newly-built single-family homes slipped two points in July to a level of 64 from a downwardly revised June reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It is the lowest reading since November 2016.“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”“The HMI measure of current sales conditions has been at 70 or higher for eight straight months, indicating strong demand for new homes,” said NAHB Chief Economist Robert Dietz. “However, builders will need to manage some increasing supply-side costs to keep home prices competitive.”  All three HMI components registered losses in July but are still in solid territory. The components gauging current sales conditions fell two points to 70 while the index charting sales expectations in the next six months dropped two points to 73. Meanwhile, the component measuring buyer traffic slipped one point to 48. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 47. The West and Midwest each edged one point lower to 75 and 66, respectively. The South dropped three points to 67.

Housing and Policy -- The NAHB Builder confidence survey declined this morning (although still solid), and the NAHB blamed the rising prices, especially for lumber. As Diana Olick noted on CNBC: Builder confidence jumped 6 points from November to December (63 to 69) and then jumped again to 71 in March, following the administration's repeal of certain environmental regulations specifically involving water.Now, new tariffs on Canadian lumber of up to 24 percent announced by the Trump administration in May, as well as the expectation of additional tariffs on other homebuilding materials imported from overseas, are overtaking the benefits of deregulation. The cost of framing lumber has spiked in recent months and continues to rise today, which only exacerbates already rising prices for land and skilled labor. Those tariffs are impacting lumber prices.This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through June 2017 (via NAHB), and 2) CME framing futures. Right now Random Lengths prices are up 14% from a year ago, and CME futures are up about 18% year-over-year. And immigration policy will likely slow household formation. Housing economist Tom Lawler wrote an excellent article last month: Lawler: Reasonable Population Projections Are Important!. Here are some excepts (look at the table and see how important immigration is for household formation). From Tom Lawler:[B]elow is a table of what labor force growth and US household formations would be under each scenario if (1) labor force participation rates by age remained constant at 2016 levels; and (2) household headship rates by age remain constant at my “best guess” rates for 2016 (there are no good, reliable data on households since 2010, but that is a different story!). I realize, of course, that holding labor force participation rates and headship rates by age constant is not a “best guess” projection, but I’m just trying to show sensitivities to different population assumptions.

AIA: Architecture Billings Index positive in June --This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.   From the AIA: Architecture firms end second quarter on a strong note For the fifth consecutive month, architecture firms recorded increasing demand for design services as reflected in the June Architecture Billings Index (ABI). As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the June ABI score was 54.2, up from a score of 53.0 in the previous month. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.6, down from a reading of 62.4 the previous month, while the new design contracts index decreased from 54.8 to 53.7.
• Regional averages: South (54.8), West (53.1), Midwest (51.9), Northeast (51.5)
• Sector index breakdown: multi-family residential (57.1), mixed practice (53.8), institutional (52.6), commercial / industrial (52.1)
This graph shows the Architecture Billings Index since 1996. The index was at 54.2 in June, up from 53.0 the previous month. Anything above 50 indicates expansion in demand for architects' services.  This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

The US Retail Crisis - The New York Times has some interesting data visualisation about the growth of e-commerce jobs and the decline of retail sectors employment (Figure 1). Online shopping accounts for only 8.4 percent of all retail sales in the United States, but it has had an outsize effect on the retail workforce. The Financial Times has a graphical review of the recent stock market sell-off on retail department stores, spurred by mounting concerns about the effects of online competition. A related question would be what the implications are, not only for retailers and retail-property companies, but also for the financial firms that have given them money, from banks to life-insurance companies. The Economist argues that total amount of capital, both debt and equity, supporting American retailing (excluding Amazon) now exceeds $2.5trn. The hundreds of thousands of jobs created by new online firms have not absorbed the job losses at traditional retailers. At the same time, the new jobs are concentrated in a handful of large cities and tech hubs (Figure 2 from NYT). Examining property data from CBRE brokerage, The Economist argues that some cities with fewer shops per person, such as New York and Seattle, may fare better, but that few parts of the country will be untouched.   The Economist has calculated what might happen to retailing workers (excluding those who work in car and fuel sales), under various assumptions about the growth of e-commerce. Assuming that employment in stores rises or falls with changes in those stores’ sales, and that labour productivity improves at historical rates, retailing jobs could shrink by 12%, or 1.5m jobs, by 2022. Under the most adverse scenario, employment could fall by 17% (figure 3 below).Paul Krugman wonders why aren’t promises to save service jobs as much a staple of political posturing as promises to save mining and manufacturing jobs? One answer might be that mines and factories sometimes act as anchors of local economies, so that their closing can devastate a community in a way shutting a retail outlet won’t. A different reason mining and manufacturing have become political footballs, while services haven’t, involves the need for villains. Demagogues can tell coal miners that liberals took away their jobs with environmental regulations. They can tell industrial workers that their jobs were taken away by nasty foreigners. By contrast, it’s really hard to blame either liberals or foreigners for, say, the decline of retail service jobs. Finally, it’s hard to escape the sense that manufacturing and especially mining get special consideration because their workers are a lot more likely to be male and significantly whiter than the workforce as a whole.

An Explanation for the Low Bankruptcy Rates: Debt -- Yesterday, I noted the U.S. bankruptcy filing rate of 2.38 per 1,000 persons is at historic lows. The next question is always why. In this post, I am going to try to walk through an explanation in four graphs. The upshot is that consumer debt is low but rising. As I like to say, it takes years of study to come to the conclusion that people file bankruptcy because they are in debt. This is not to say that other factors are not contributors -- unemployment, general economic conditions -- but the primary macroeconomic driver of bankruptcy filings is the amount of debt on household balance sheets. The first graph shows total U.S. consumer credit. The consumer credit data come from the Federal Reserve's G.19 data series on consumer credit. The Fed's definition of consumer credit includes nonrevolving debt like car loans and revolving debt like credit cards. These figures do not home mortgage debt, which the Fed tracks elsewhere but also that I have found not to be predictive of bankruptcy filing rates. Even over the time periods in the graph, it is important to account for population increases and inflation. I use population data from the U.S. Census and the Consumer Price Index from the Bureau of Labor Statistics.  Thus, this first graph shows per capita consumer debt adjusted for inflation, not including mortgages. That figure currently stands at $11,471 per person -- every man, woman, and child -- in the United States. (It would be better to use the adult population as the base, but that additional complication makes data-gathering more difficult without increasing the accuracy of our conclusions.) As the graph clearly shows, after a small dip in the Great Recession total consumer credit has been climbing. That would suggest the opposite of what we have been seeing -- increasing bankruptcy filing rates.

An alarming number of Americans are worse off than their parents and we’re not talking about it enough --The sharp and steady increase in US inequality in recent decades has been well documented. Less attention has been paid to a potentially even more important and alarming trend — a decline in US social mobility. After all, this is the very essence of the American Dream, that people can succeed and prosper if they just work and try hard enough. A startling decline in the ability of Americans to climb up the social ladder is documented in a new study published by the Federal Reserve Bank of Minneapolis. The report, entitled " The Decline in Intergenerational Mobility After 1980" finds "mobility declined sharply for cohorts born between 1957 and 1964 compared to those born between 1942 and 1953."Why the distinction? "The former entered the labor market largely after the large rise in inequality that occurred around 1980 while the latter entered the labor market before this inflection point," write Jonathan Davis of the University of Chicago and Bhashkar Mazumder, a Chicago Fed economist.They find that "share of children whose income exceeds that of their parents fell by about 3 percentage points" in the period staring in 1980.   Their findings echo a study from the St. Louis Fed in March that showed US social mobility is much lower than its rich-country peers'.

Americans are hoarding money in checking accounts -- Cash — or something close to it — is king again. Enjoying a steady job market but reluctant to spend freely due to economic uncertainty, a wide swath of middle-class Americans are hoarding money in banks. Total bank deposits rose 6.6% last year to $10.7 trillion, extending steady growth seen in recent years, data from the Federal Deposit Insurance Corporation show. Deposits measured as a percentage of bank assets are 77.6% in the first quarter of 2017, the highest since 2006, according to data economic research firm Moebs Services. And Americans love liquidity. They hold about $2 trillion in checking account now, says Mike Moebs, CEO of Moebs Services, which provides research and consultancy services to financial institutions. The average U.S. checking account deposit is about $3,600, climbing from $1,000 in 2007, he says. Much of deposit growth surely has to do with the resilient U.S. economy that continues to expand from the depths of the financial crisis. Steady paychecks are the industry's best friend. "Incomes are up and people are choosing to deposit (their money) rather than increase spending," says Paul Merski, group executive vice president of congressional relations and strategy for the Independent Community Bankers of America. A dearth of investment options is also driving the hoarding behavior. Only about half of Americans are invested in the stock market, according to Gallup. And other common options, such as certificates of deposits and savings accounts, are offering interest rates that are barely above those of checking accounts. While saving is deemed a personal finance virtue, would-be shoppers holding tightly onto their budgets can also be a drag on the economy. U.S. consumer spending was relatively flat, up only 0.1% in May, the latest data from the Commerce Department show. Retail and auto sales have also been sluggish. 

US Restaurant Industry Stuck In Worst Collapse Since 2009 - One month after we reported that the "restaurant industry hasn't reported a positive month since February 2016", we can add one more month to the running total: according to the latest update from Black Box Intelligence's TDn2K research, in June both same-store sales and foot traffic "growth" declined once more, dropping by -1% and -3%, respectively, extending the longest stretch of year-over-year declines for the US restaurant industry to 16 consecutive months - the longest stretch since the financial crisis - with sales rising in 45 markets while declining in 150 with Texas, the worst region in the US, suffering a 2.2% and 4.1% decline in sales and traffic respectively.

Gas Prices Drop Below $2 in Five States - Gas prices continue to slide. They have dropped below $2 in five states. And, in several more, the price for the average gallon of regular is close to that threshold. If oil prices remain below $50 a barrel, more states may join the list.Gas prices are not just driven by oil. Refinery capacity is an important factor. Gas taxes are also a major variable. They range from $.777 a gallon in Pennsylvania, the highest, to $.307 in Alaska, the lowest. Most of the sub-$2 gas states are at the bottom of the tax list.Many of the states on the low-priced gas list are near the Gulf of Mexico and the massive refineries close to Houston. Gas is $1.97 a gallon in Alabama, $1.98 in Oklahoma, and $1.99 in Mississippi and Arkansas. The only exception to the Houston rule is South Carolina, at $1.95 according to GasBuddy. The state's very low gas tax, at $.372 a gallon, is well below the national average, according to the American Petroleum Institute. Tennessee, Virginia, Texas, and Louisiana have prices barely above $2.  All of the other low gas states on the list are also near the bottom of the tax ladder. There is a debate about where prices will go, mostly because oil has been volatile over the last month. AAA say prices have ticked higher, but the organization is not willing to forecast far into the future: For the first time in five weeks, the national average gas price is increasing. At $2.26, today’s price has been moving higher since July 6 and is three cents more than last week. The moderate price surge follows a week of solid demand growth and a third straight week of gasoline inventory drawdowns across the country.

 Average Americans Can No Longer Afford Average New Cars - Some people say capitalism and alligators have much in common — both eat their young. While the rich get richer (and will get richer still if the #FakePresident has his way), ordinary schlubs who are working one, two, or sometimes three jobs to make ends meet are finding they can no longer afford to buy average new cars. According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction.  This index was positive in 9 of the last 12 months, suggesting a further increase in CRE investment in 2017 and early 2018.  That’s according to a new study by Bankrate.com. It finds that people living in 24 of the 25 largest metropolitan areas in the US cannot afford the average price of new cars, which was $33,000 in May according to Kelly Blue Book. In six of those cities, people struggle to afford cars cost half that much. Only in Washington, DC, where the median income is over $100,000, are people able to afford a new car. But the statistics for the nation’s capitol are wildly skewed by all the millionaires in Congress and the $1,000 an hour lobbyists who grease the wheels of democracy. “Affordability” is a relative term, of course. For purposes of the Bankrate study, analysts used the so-called 20/4/10 rule. It assumes a 20 percent down payment, a 48 month loan, and a total of of insurance and loan payments that does not exceed 10 percent of a family’s gross income. “The [average] household can’t comfortably afford to buy a new vehicle,” said Claes Bell, a Bankrate.com analyst. “That means a lot of households are overextending themselves on car costs, and that can potentially crowd out other priorities such as saving for retirement.” 

Auto Defaults Soar On The Back Of "Hasty Loans And, At Times, Outright Fraud" ---In the years after its 2009 bankruptcy, Chrysler looked for a dedicated lender to help customers "finance their cars quickly"...which was code for a lender who could help the struggling OEM expand their market share by making extremely risky loans to subprime borrowers all while laying off the credit risk to unsuspecting pension funds.  As such, Chrysler ultimately picked Santander due to its expertise in “automated decisioning”...which was code for the ability to advance credit without actually performing income verification tests on borrowers.For a time, Chrysler and Santander enjoyed a perfect symbiotic relationship as it offered Santander an opportunity to aggressively expand in the U.S. subprime loan market, and Chrysler, the perennial third wheel among the “Big Three,” was able to target customers that were previously deemed untouchable by lenders.  Of course, as Bloomberg points out today, the problems surfaced almost from the start.Many of them, detailed in the settlement between Santander and authorities in Delaware and Massachusetts, recall some of the excesses of the subprime housing era.Attorneys general in both states alleged Santander enabled a group of “fraud dealers” to put buyers into cars they couldn’t afford, with loans it knew they couldn’t repay. It offloaded most of the debt, which often had rates over 15 percent, reselling them to yield-hungry ABS investors.State authorities also said an internal Santander review in 2013 found that 10 out of 11  loan applications from a Massachusetts dealer contained inflated or unverifiable incomes. (It’s not clear whether this particular case involved a Chrysler dealer.)Santander kept originating the dealer’s loans anyway, even as they continued to default “at a high rate,” the authorities said.Some dealerships even asked Santander to double-check customers’ incomes because they didn’t trust their own employees, the authorities said. They also said the lender didn’t always oblige because that would put it at a “competitive disadvantage.” At the time of the settlement, Santander said it was “totally committed to treating its customers fairly.”All of which at least partially explains why auto defaults are soaring to post-crisis highs even as equity markets continue to shrug off bad data.

U.S. Heavy Truck Sales increased following Oil Price Related Slump -- The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the June 2017 seasonally adjusted annual sales rate (SAAR).Heavy truck sales really collapsed during the great recession, falling to a low of 181 thousand in April and May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 479 thousand SAAR in June 2015. Heavy truck sales declined again - probably mostly due to the weakness in the oil sector - and bottomed at 352 thousand SAAR in October 2016.With the increase in oil prices over the last year, heavy truck sales have been increasing too. Heavy truck sales were at 402 thousand SAAR in June 2017.>

Chevy Forced To Extend Shutdown Of Bolt Plant After Realizing That Literally No One Wants A Bolt General Motors launched it's much-hyped, all electric Chevy Bolt at the end of 2016.  The Bolt was expected to make a splash as it was the first electric car in the U.S. market to offer 200 miles of driving range at an affordable price starting around $35,000.  The only problem is that pretty much no one seems to want one. Unfortunately, that lack of demand is about to earn a bunch of UAW workers at GM's Orion, Michigan plant an extended summer vacation.m As AOL Finance points out today, GM has managed to sell just over 7,500 Chevy Bolts through the first six months of 2017.  Moreover, since dealers are sitting on about 111 days worth of inventory, we're going to go out on a limb and say the Bolt launch slightly underperformed expectations.  All of which has resulted in GM's decision to extend the shutdown currently in effect at it's Orion plant for just a little while longer.  But it's not just the Chevy Bolt that GM is having a hard time selling.  Overall, the company is battling a massive inventory glut, some 126 days of supplies, in passenger cars.  As such, the company has extended summer vacation shutdowns at three other North American assembly plants. The assembly plant at Lordstown, Ohio, that makes the Chevrolet Cruze and a plant near Kansas City, Missouri, that produces the Malibu sedan both have three additional weeks of downtime. An assembly plant in Oshawa, Ontario, will be idled for two extra weeks to reduce inventories of the Chevrolet Impala large sedan.

US Import, Export Prices Tumble For 2nd Month As China Deflation Exports Accelerate -- For the second month in a row both import and export prices fell MoM (imports -0.2%; exports -0.2%)...This is the equal biggest MoM drop in import prices since Feb 2016... Petroleum prices dropped 2.2% - the biggest driver - along with Foods & Beverages (-1.6%) and Agricultural (-1.5%).Year over year, import and export price growth fell to their lowest since Nov 2016. After a modest rebound in Q1, China import prices have resumed their downward trend, falling to February lows... It appears that US companies are unable to pass through any input cost increases to the rest of the world as China exports its own brand of deflation once again.

NY Fed: Manufacturing Activity "grew modestly" in July -- From the NY Fed: Empire State Manufacturing Survey: Business activity grew modestly in New York State, according to firms responding to the July 2017 Empire State Manufacturing Survey. The headline general business conditions index fell ten points to 9.8. The new orders index moved down to 13.3, and the shipments index fell to 10.5, suggesting that orders and shipments continued to grow, though at a somewhat slower pace than in June. ... The index for number of employees fell for a third consecutive month, though it remained positive at 3.9 — a sign that employment was growing, but not as rapidly as in earlier months. The average workweek index fell to zero, indicating that hours worked remained the same. ... Indexes assessing the six-month outlook remained favorable, though firms were somewhat less optimistic about future conditions than in June.  This was below the consensus forecast of a reading of 15.0.

Empire State Manufacturing Survey: Activity Grew Modestly in July - This morning we got the latest Empire State Manufacturing Survey, which fell from the previous month. The diffusion index for General Business Conditions at 9.8 was a decrease of 10.0 from the previous month's 19.8. The Investing.com forecast was for a reading of 15.0. The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state. Here is the opening paragraph from the report. Business activity grew modestly in New York State, according to firms responding to the July 2017 Empire State Manufacturing Survey. The headline general business conditions index fell ten points to 9.8. The new orders index moved down to 13.3, and the shipments index fell to 10.5, suggesting that orders and shipments continued to grow, though at a somewhat slower pace than in June. Delivery times continued to lengthen, and inventory levels were fairly steady. Labor market indicators pointed to a small increase in employment and no change in hours worked. Input prices and selling prices rose at about the same pace as last month. Indexes assessing the six-month outlook suggested that firms remained positive about future conditions, though they were less optimistic than in June. [source] Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:

 Philly Fed Manufacturing Index: Positive but Weaker Growth in July - The Philly Fed's Manufacturing Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. While it focuses exclusively on business in this district, this regional survey gives a generally reliable clue as to the direction of the broader Chicago Fed's National Activity Index.The latest Manufacturing Index came in at 19.5, down from last month's 27.6 and has been positive for twelve consecutive months. The 3-month moving average came in at 28.6, down from 29.5 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 36.9, a decline from the previous month's 31.3.Today's 19.5 headline number came in above the 24.0 forecast at Investing.com.Here is the introduction from the survey released today:Manufacturing activity in the region continues to grow but at a slower pace, according to results from the July Manufacturing Business Outlook Survey. The diffusion indexes for general activity, new orders, shipments, employment, and work hours remained positive but fell from their readings in June. Respondents also reported a moderation of price pressures this month. Firms remained generally optimistic about future growth. More than one-third of the manufacturers expect to add to their payrolls over the next six months. (Full Report)The first chart below gives us a look at this diffusion index since 2000, which shows us how it has behaved in proximity to the two 21st century recessions. The red dots show the indicator itself, which is quite noisy, and the 3-month moving average, which is more useful as an indicator of coincident economic activity. We can see periods of contraction in 2011 and 2012, and a shallower contraction in 2013. 2015 saw a contraction with an improvement in 2016. In the next chart, we see the complete series, which dates from May 1960. For proof of the high volatility of the headline indicator, note that the average absolute monthly change across this data series is 7.7.

Weekly Initial Unemployment Claims decrease to 233,000 --The DOL reported:In the week ending July 15, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 15,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 247,000 to 248,000. The 4-week moving average was 243,750, a decrease of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 245,750 to 246,000.  The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

BLS: Unemployment Rates Lower in 10 states in June, Two States at New Series Lows--From the BLS: Regional and State Employment and Unemployment SummaryUnemployment rates were lower in June in 10 states, higher in 2 states, and stable in 38 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Twenty-seven states had jobless rate decreases from a year earlier and 23 states and the District had little or no change. The national unemployment rate, 4.4 percent, was little changed from May but was 0.5 percentage point lower than in June 2016.  Colorado and North Dakota had the lowest unemployment rates in June, 2.3 percent each. The rates in North Dakota (2.3 percent) and Tennessee (3.6 percent) set new series lows. ... Alaska had the highest jobless rate, 6.8 percent, followed by New Mexico, 6.4 percent.  This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession. The size of the blue bar indicates the amount of improvement.   The larger yellow markers indicate the states that reached the all time low since the end of the 2007 recession.  These ten states are: Arkansas, California, Colorado, Maine, Mississippi, North Dakota, Oregon, Tennessee, Washington, and Wisconsin. The states are ranked by the highest current unemployment rate. Alaska, at 6.8%, had the highest state unemployment rate.  The second graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red).  Currently no state has an unemployment rate at or above 7% (light blue); Only two states and D.C. are at or above 6% (dark blue). The states are Alaska (6.8%) and New Mexico (6.4%).  D.C. is at 6.2%.

Quit Your Job for a Better One? Not if You Live in Idaho - NYT -- Idaho achieved a notable distinction last year: It became one of the hardest places in America for someone to quit a job for a better one. The state did this by making it easier for companies to enforce noncompete agreements, which prevent employees from leaving their company for a competitor. While its economy is known for agriculture — potatoes are among the state’s biggest exports — Idaho has a long history as a technology hub. And the new law landed in the middle of the tech world, causing a clash between hungry start-ups looking to poach employees and more established companies that want to lock their people in place. “We’re trying to build the tech ecosystem in Boise,” said George Mulhern, chief executive of Cradlepoint, a company here that makes routers and other networking equipment. “And anything that would make somebody not want to move here or start a company here is going to slow down our progress.” Alex LaBeau, president of the Idaho Association of Commerce and Industry, a trade group that represents many of the state’s biggest employers, countered: “This is about companies protecting their assets in a competitive marketplace.” 

A 21st-Century Form of Indentured Servitude Has Already Penetrated Deep into the American Heartland -- Indentured servitude is back in a big way in the United States, and conservative corporatists want to make sure that labor never, ever again has the power to tell big business how to treat them. Idaho, for example, recently passed a law that recognizes and rigorously enforces non-compete agreements in employment contracts, which means that if you want to move to a different, more highly paid, or better job, you can instead get wiped out financially by lawsuits and legal costs. This type of labor system has been the dream of conservative/corporatists, particularly since the “Reagan Revolution” kicked off a major federal war on the right of workers to organize for their own protection from corporate abuse. Unions represented almost a third of American workers when Reagan came into office (and, since union jobs set local labor standards, for every union job there was typically an identically-compensated non-union job, meaning about two-thirds of America had the benefits and pay associated with union jobs pre-Reagan). Thanks to Reagan’s war on labor, today unions represent about 6 percent of the non-government workforce. Prior to the current Reaganomics era, non-compete agreements were pretty much limited to senior executives and scientists/engineers.But should a guy who digs holes with a shovel or works on a drilling rig be forced to sign a non-compete? What about a person who flips burgers or waits tables in a restaurant? Or the few factory workers we have left, since neoliberal trade policies have moved the jobs of tens of thousands of companies overseas? Turns out corporations are using non-competes to prevent even these types of employees from moving to newer or better jobs.

Labor’s Last Chance for Solidarity - In 1980, PATCO leadership infamously chose to grovel to Ronald Reagan, endorsing his presidential run. Less than a year later, Reagan smashed PATCO and helped jumpstart American labor’s precipitous decline.Unions in the Trump era face a familiar dilemma: how to grapple with powerful politicians poised to launch broad attacks on the American working class. The stakes of the dilemma are no less than those faced by PATCO under Reagan: unions that give their imprimatur to an anti-union president will soon find that president destroying them and the rest of the labor movement anyway.Too often in American history, unions have responded to attacks by narrowing rather than expanding the scope of their fight, abandoning the increasingly massive sea of unorganized workers as well as cross-sector solidarity in an attempt to curry favor with otherwise anti-worker politicians. Given the sheer ferocity of the Trump administration and the already weakened state it finds itself in, this may be organized labor’s last chance to learn from the recurring lesson of its past: when unions break solidarity with other workers — union and nonunion — out of political expedience, they too suffer in the end.

Barriers to Entry: On Bar Exams and Supreme Court Seats --naked capitalism by Jerri-lynn Scofield - The California Supreme Court is poised to reduce the passing score for the California state bar– long considered to be the toughest bar in the country, according to this Dealbook piece from last week, California Supreme Court Moves to Make Bar Exam Easier to Pass. Although the court has yet to decide what the “cut score” –passing mark–  will be, changes are expected to be in place by January. The bar exam is just one many barriers to entry originally set up to make sure people of the right class– and mindset– were licensed to practice law.  Yet as Above the Law reports in California Bar Examiners Stripped Of Authority To Determine Passing Score On State Bar Exam: …bar exam passage rates have plummeted across the nation for the past several years. In California in particular, test-takers’ performance has been outstandingly poor, prompting a chorus of critics to demand that the state’s cut score be lowered so that more law school graduates will be able to pass the exam and become practicing attorneys. As it stands, California’s required passing score of 144 is higher than that of 48 other states, with only Delaware’s cut score being higher. For decades, California’s bar exam has been referred to as the hardest in the country, but year in and year out, data has revealed that to be untrue. With the state’s mean scaled MBE scores continuing to be higher than the national average, it seems that California’s bar exam is simply the most difficult to pass thanks to its arbitrarily high cut score.  After a stunningly low overall passage rate of 34.5 percent for the most recent exam, the State Bar of California committed to study the test and examine the cut score, but it looks like the California Supreme Court thought that the process was taking too long, so the justices took it upon themselves to do something. The Deal Book account expounds on some reasons for the change:

Connecticut Sinks Deeper in Debt –   For Connecticut’s pensions, investment forecasting is the triumph of hope over experience.The state’s $17 billion teachers pension returned an average of 3.2 percentage point less than its 8.5 percent assumed annual rate of return between fiscal 2001 and 2015, the sixth-widest gap among 112 state retirement funds over the period, according to data compiled by the Center for Retirement Research at Boston College. The difference between assumed and actual returns of Connecticut’s municipal employee and state workers pensions wasn’t much better, ranking eighth and 15th-widest, respectively.The failure to meet such targets is significant because governments need to boost contributions to make up the difference. Doing so would worsen the financial squeeze on Connecticut, which was downgraded by all three major credit-rating companies this year because of its budget deficit.“Plans are aiming to hit their assumed return and so when they fall short, there’s something wrong with the system," said Jean-Pierre Aubry, associate director of state and local research at the Center for Retirement Research. “Either someone is telling them to set it too high or the investment manager isn’t hitting his goals." Connecticut’s pensions had less than half the assets needed to pay its $63.7 billion of pension promises, according to the most recent audited figures. In 2015, its retirement system was the fourth-worst among U.S. states behind New Jersey, Kentucky and Illinois, according to data compiled by Bloomberg. Public pensions from California to New York have been lowering their return goals, adopting a more modest outlook after being roiled by last decade’s booms and busts and a long period of historically low interest rates. Of almost 130 public retirement funds, about three-fourths have reduced their targets since fiscal 2010, resulting in a decline in the average return assumption to 7.5 percent from 7.9 percent, according to the National Association of State Retirement Administrators.

Decaying infrastructure taking a toll on America - Deutsche Welle - The summer of hell began for New Yorkers last Monday. Beginning at four o'clock in the afternoon people hurried home from work, clogging midtown Manhattan's Pennsylvania Station. Over 600,000 people trek to Manhattan daily from faraway places like New Jersey and Long Island, entering the city via Penn Station. More people transit through Penn Station than all three of New York's airports: JFK, LaGuardia and Newark. Yet on Monday many tracks were shut down for the summer so the city can begin tackling urgently needed repairs.  "We are now beginning to see what happens when mass transit systems break down. We have a painful precursor, a series of breakdowns with Amtrak and Pennsylvania Station," said New York state Governor Andrew Cuomo, "When you close down the tracks there is a series of dominoes that fall, that puts the entire system near collapse." This was during the press conference where Cuomo declared a state of emergency for the transit system. And it is not only the subway that needs repair: Streets are littered with potholes, dilapidated tunnels are increasingly dangerous and the sewage systems need maintenance. Electricity grids, gas and oil pipelines, ports, freight rail and internet broadband are all infrastructure that require constant maintenance, yet they are privately owned and well kept.  It is the infrastructure that falls under government watch that is failing. "Everyone wants the benefits of good infrastructure and nobody wants to pay, so things are allowed to deteriorate," says Ingo Walter, Professor Emeritus of Finance at New York University, "Transportation is the lynchpin. Fixing our roads, bridges, tunnels and transportation hubs are a must and will have the biggest impact."

How Andrew Cuomo broke the New York subway -  New York Gov. Andrew Cuomo (D) declared a "state of emergency" on Thursday and ordered the Metropolitan Transportation Authority (MTA) to produce a reorganization plan to fix the problem. Don't fall for his shtick. Cuomo has been directly responsible for the subway for over six years. It has been obvious since he took power that something like this would happen and he's done nothing but make it worse. The crisis is a clear result of his incompetence, his abysmal politics, and his odious personality. So what's behind the crisis? Probably the biggest proximate problem is overcrowding. As this New York Times analysis details, subway ridership has nearly doubled since 1990, as the city has begun to grow again — with much of that growth consisting of young people specifically seeking out the urban car-free lifestyle. But the number of subway cars has barely budged, and the miles of track have actually decreased slightly. Congestion problems tend to snowball as the system reaches full capacity, and additional riders make it run slower — delays due to technological problems have roughly doubled since 2012, but those due to overcrowding have jumped by over fivefold. A secondary problem is the aging technology, which has been in dire need of repairs and upgrades for decades. Much of the system is so outdated that the MTA has to keep up custom manufacturing and repair facilities to make and fix parts that haven't been mass-produced for 50 years or more. (Efforts to replace the ancient fixed-block signaling technology with a more modern version have been plugging along for years, but are nowhere near complete.) A third problem is that of the larger American problem of hideously overpriced infrastructure. One recently completed minor subway expansion up New York's Second Avenue (the tunnels for which were already half-dug back in the 1970s) was something like two to 20 times more expensive than similar European projects. Inefficient maintenance and capital spending are also a major factor behind the MTA's consistent deficit problem — and outrageous prices push desperately needed upgrades further out of reach.

San Francisco's Dirty Little Secret  --It's one of the most racially segregated cities in North America... Three years ago, FT had an article praising Tokyo’s laissez-faire zoning laws. Landowners can build and demolish as they see fit; the rules are set at the national level, so local governments have no say in the matter.The article suggests that San Francisco could learn a thing or two from relaxed development rules. Ha. Hahahahaha. Why on earth would San Francisco residents want to liberate housing development??In Japan, a housing development is the developer’s business. In San Francisco, it’s everyone’sbusiness. Neighbors appeal building permits based on traffic considerations, shadow effects, environmental impact, historic preservation, and all manner of other stuff. Here’s what they really want to preserve: The upper blue area is North Beach and Little Italy. The red cluster to the right of that is Chinatown, port of entry for Chinese immigrants during the railroad and Gold Rush years. The red blocks on the west are the second, third, and fourth Chinatowns, formed after 1965. The orange area is the Latino Mission District; the dense blue spot down south is the Jewish retirement community. Source: DotmapSan Francisco is culturally diverse, but the diversity is strictly segregated. We call thishistorical character, and character can only be maintained by keeping outsiders out. Neighborhoods can’t exactly come out and impose cultural segregation, but they can enforce zoning laws. By blocking new buildings and preventing the renovation of old ones, residents ensure that the demographic makeup stays the same year after year.

Los Angeles' homeless crisis goes from bad to worse - BBC News: Homelessness in Los Angeles County soared by 23% in the past year and it shows. The problem has become tangible and inescapable, with makeshift tent encampments cropping up across the sprawling metropolis. Tourists are shocked to find themselves stepping over people draped in filthy blankets and begging on Hollywood's Walk of Fame. Shop owners routinely swill the pavements to wash away urine and the accompanying stench. "For the 31 years that I've been involved with homelessness... it has gotten worse far worse than I've ever seen before," says Ted Hayes, a long-time activist. Hayes says gentrification of the downtown area has begun to scatter a previously concentrated homeless population across the city. The yearly homeless count in Los Angeles County rose to 58,000 in 2017, up from 46,874 in 2016. Neighbouring areas, such as Orange County, are also experiencing the same upwards trend. The count was compiled by a team of 7,700 volunteers over three days and three nights in January. Young people - aged 18-24 - are the fastest growing group of homeless people, up 64%. And children without a home increased 41% With an office on a seedy stretch of Hollywood Boulevard, Kerry Morrison says local business owners - along with city officials and myriad charitable organisations - have been working on the issue for years. But they appear to be losing the battle. "Something is shifting right now, we're all noticing it," she says. "We could viscerally feel that something was changing maybe about two years ago." Morrison believes the problem has worsened because of combination of factors, with rising housing costs in the city at the top of that list. 

Outrageous Massachusetts Drug Bill Would Send You to Prison and Steal Your Car—No Drugs Needed -- With the support of state law enforcement, a Massachusetts Democratic state representative has filed a drug war bill that would send violators to prison for a mandatory minimum two years (five years for a second offense) and allow police to seize their vehicles—all without the presence of any actual drugs.Sponsored by Rep. Stephan Hay (D-Fitchburg), the measure, House Bill 1266, makes it a crime to have a hidden compartment in one's vehicle or to try to add one—and it presumes that any hidden compartment in a vehicle is for "for the purpose of transporting or distributing controlled substances" and related contraband, such as cash or weapons. As the bill specifies in its asset forfeiture section: Proof that a conveyance contains a hidden compartment as defined in this section shall be prima facie evidence that the conveyance was used intended for use in and for the business of unlawfully manufacturing, dispensing, or distributing controlled substances.

Shootings by Police Officers: Self-Control and More - Mike Kimel - I stumbled on a recent paper in the Police Quarterly entitled “Quick on the Draw: Assessing the Relationship Between Low Self-Control and Officer-Involved Police Shootings.” Quoting from the paper:While the extant literature on police use of deadly force is voluminous, it is fairly limited with regard to the influence of officer characteristics. Moreover, this is the first known study to explore an individual-level criminological theory(i.e., self-control) in the context of police officer-involved shootings. In building on previous studies linking low self-control to negative police behavior more generally (Donner et al., 2016; Donner & Jennings, 2014), this study uses data from a sample of 1,935 Philadelphia police officers to investigate the extent to which Gottfredson and Hirschi’s (1990) general theory can predict officer-involved shootings specifically.Based on theory and related research, it is hypothesized that officers with lower levels of self-control will be more likely to have used deadly force because police shooting incidents would provide low self-control officers (those who are more impulsive, self-centered, short-sighted, thrill-seeking, and easily provoked) with an opportunity to engage in a behavior that it is often spontaneous, can provide immediate gratification, is adrenaline-inducing, and can provide an outlet for frustration.

Shocking Federal Report Details Continued Use of Solitary Confinement for Mentally-Ill Inmates -- naked capitalism by Jerri-lynn Scofield -  The Office of the Inspector General  (OIG) of the Department of Justice (DoJ) issued a shocking report last week, detailing the continued use of solitary confinement to house mentally-ill inmates– despite a 2014 policy change that was touted as getting such prisoners access to appropriate mental health care.Prisoners are being held in solitary confinement for too long– in contravention of the Bureau of Prison’s (BOP) own guidelines– denied medical treatment, and in some prisons, held in confinement cells of 58.5 square feet (well below the American Correctional Association’s minimum recommendation of 80 square feet), according to a Jurist report, Federal report criticizes harsh treatment of mentally ill inmates. The conclusions the 96-page report– Review of the Federal Bureau of Prisons’ Use of Restrictive Housing for Inmates with Mental Illness –were stinging. So much so that the Marshall Project reported in Federal Watchdog Finds Mentally Ill Are Stuck in Solitary: A Bureau of Prisons spokesman declined to comment on the report. In a response to a draft, Thomas Kane, the agency’s acting director, said the BOP would adopt all 15 of the Inspector General’s recommendations. The previous administration received significant kudos last August when then deputy attorney-general Sally Q. Yates issued a memo directing the BOP  o cease housing inmates in private, for-profit prisons,  as The New York Times reported in U.S. to Phase Out Use of Private Prisons for Federal Inmates. This policy change followed release of a critical OIG report, Review of the Federal Bureau of Prisons’ Monitoring of Contract Prisons— issued the very same month– which described and criticised conditions at such prisons. I should emphasise  that the appalling conditions that exist in U.S. prisons– whether public (federal and state) or private– are well and widely-known to those who care to notice. That’s not to say that the Trump administration can’t find a way to worsen the situation. In February, Attorney General Jeff Sessions reversed the Yates phase-out policy, and directed the BOP  to continue to use private, for-profit facilities, as reported in The New York Times in Justice Department Keeps For-Profit Prisons, Scrapping an Obama Plan.

What's in the Shopping Carts of Food Stamp Recipients? - Last November, the USDA published a report that provides some insight into the kinds of food and drink items that recipients of its Supplemental Nutrition Assistance Program (SNAP), which used to be called "Food Stamps", are buying up with their government-issued EBT cards.  In the chart below, we've taken the Top 10 items from Exhibit 6 of the report, which lists the millions of dollars of eligible food and drink commodities that SNAP recipients were determined to have bought in transactions using their EBT cards, and shown how the spending for those items compares to the total amount of spending that was counted in the study.  Together, SNAP benefit recipients purchases of the Top 10 food and drink categories accounted for over one-quarter of all the spending on eligible food and drink items captured in the report. The most popular category, soft drinks, alone accounted for over 5.4% of all purchases, or about $1 of every $18.38 spent. It's important to recognize that SNAP recipients will often use a combination of their regular income and their SNAP benefits to purchase groceries. For example, a single individual in New York City who has $825 in income per month can augment that income with a monthly SNAP benefit of $194 per month (a lower amount of SNAP benefits can be obtained for such single, childless, working-age individuals with incomes of as much as $1,285 per month).  Since these benefits are exempt from federal, state and local income taxes, and are also exempt from state and local sales taxes, SNAP recipients can maximize their benefits by using them to buy items that would otherwise be subject to state and local sales taxes. For example, in New York once again, items like carbonated soft drinks, candy and grocer-prepared food like sandwiches, are subject to the state's sales tax rate of 4%, where the city of New York would pile on an additional local sales tax rate of 4.49%, which makes it possible for SNAP benefit recipients to buy 8.49% more of these kinds of groceries in New York City with their benefits than they can with their regular income.

Electronic monitoring isn’t kid-friendly -- Across California, young people in the juvenile justice system are routinely tracked 24/7 with GPS ankle monitors that are often touted as “better than jail.” That’s too low a standard for a technology used on children.A new report issued by UC Berkeley School of Law and the East Bay Community Law Center, which we helped draft, suggests that electronic monitoring may worsen the very problems that juvenile courts try to remedy. Rather than further rehabilitation, it often leads to jail for technical rule violations and traps young people in the system longer.Electronic monitoring is harsh and a poor fit for youth, is disproportionately used for youth of color and should be reserved only for certain serious cases.We wrote this report because we regularly saw clients sent back to jail for violating inflexible monitoring rules. One client, a 13 year-old boy, was arrested for stealing a backpack, his first offense, and was put on an electronic monitor for three months. This meant staying inside his house except when going to school. He wound up going to jail for violating monitoring rules seven times during the roughly two years on probation. Every time he went to jail, he fell behind in school, missed counseling appointments and lost job and mentoring opportunities.  Most other California counties have similarly stringent rules. Not surprisingly, rule violations are frequent, and young people cycle in and out of jail for technical violations.  Their families also struggle to pay daily monitoring fees of $3.50 to $30 per day. Some counties charge additional fees for applying to the program or moving, on top of fees for probation, juvenile hall and drug testing. The costs add up and are often impossible to pay.

Should the real debate be about robots in education? - Tyler Cowen --That is the topic of my latest Bloomberg column, here is one bit from it:In a recent Financial Times interview, Sherry Turkle, a professor of social psychology at MIT, and a leading expert on cyber interactions, criticized robot education. “The robot can never be in an authentic relationship,” she said. “Why should we normalize what is false and in the realm of [a] pretend relationship from the start?” She’s opposed to robot companions more generally, again for their artificiality.Yet K-12 education itself is a highly artificial creation, from the chalk to the schoolhouses to the standardized achievement tests, not to mention the internet learning and the classroom TV. Thinking back on my own experience, I didn’t especially care if my teachers were “authentic” (in fact, I suspected quite a few were running a kind of personality con), provided they communicated their knowledge and radiated some charisma.And:My biggest concern about robot education, by the way, involves humans. Children sometimes trust robots too much. Teachers and administrators could use robots to gather confidential information about children and their families, as the children may think they are talking to a robot only, rather than creating a database for future scrutiny. This could be addressed by comprehensive privacy standards, probably a good idea in any case. Do read the whole thing.

Generation Z Nothing like Millennials, Warns Professor -- A political science professor in Pennsylvania says Democrats need to worry, because the generation replacing their millennial allies on college campuses has a distinct libertarian streak.Jeff Brauer, a professor at Keystone College, has been gathering data on “Generation Z,” and recently told The New York Post that he expects the rising generation of college students to differ markedly from those currently dominating campus culture.“Politically, Generation Z is liberal-moderate with social issues, like support for marriage equality and civil rights, and moderate-conservative with fiscal and security issues,” Brauer said. “While many are not connected to the two major parties and lean independent, Gen Z’s inclinations generally fit moderate Republicans.”Notably, Brauer’s research has indicated that growing up in an age of constant terror threats, school shootings, and economic instability has led Gen Z to prize economic stability and security more highly than millennials.“Pollsters need to pay attention to Gen Z. People and politicians need to recognize that they aren’t millennials and shouldn't be lumped in,” Brauer told Campus Reform, noting that “there was virtually no attention paid to this demographic” in 2016, even though it was the first presidential election in which Gen Z had the ability to vote. “Democratic candidates lost five percent of the youth vote nationally (down from 60 percent to 55 percent),” Brauer pointed out. “In Florida, Democrats’ margin of victory among the young dropped 16 percentage points. In both Ohio and Pennsylvania, the drop was 19 points. In Wisconsin, 20 points.” Brauer believes that this is indicative of more than a one-time phenomenon, saying “it is much more likely the precipitous drops were due to the more conservative Generation Z being able, for the first time, to express their political inclinations, especially in the economically hard-hit swing states.”

 An overdose, a young companion, drug-fueled parties: The secret life of USC med school dean -- In USC’s lecture halls, labs and executive offices, Dr. Carmen A. Puliafito was a towering figure. The dean of the Keck School of Medicine was a renowned eye surgeon whose skill in the operating room was matched by a gift for attracting money and talent to the university. There was another side to the Harvard-educated physician. During his tenure as dean, Puliafito kept company with a circle of criminals and drug users who said he used methamphetamine and other drugs with them, a Los Angeles Times investigation found. Puliafito, 66, and these much younger acquaintances captured their exploits in photos and videos. The Times reviewed dozens of the images. Shot in 2015 and 2016, they show Puliafito and the others partying in hotel rooms, cars, apartments and the dean’s office at USC. In one video, a tuxedo-clad Puliafito displays an orange pill on his tongue and says into the camera, “Thought I’d take an ecstasy before the ball.” Then he swallows the pill.In another, Puliafito uses a butane torch to heat a large glass pipe outfitted for methamphetamine use. He inhales and then unleashes a thick plume of white smoke. Seated next to him on a sofa, a young woman smokes heroin from a piece of heated foil.  As dean, Puliafito oversaw hundreds of medical students, thousands of professors and clinicians, and research grants totaling more than $200 million. He was a key fundraiser for USC, bringing in more than $1 billion in donations, by his estimation. Puliafito resigned his $1.1-million-a-year post in March 2016, in the middle of the spring term, saying he wanted to explore outside opportunities. Three weeks earlier, a 21-year-old woman had overdosed in his presence in a Pasadena hotel room.

the mass defunding of higher education that’s yet to come -- I am increasingly convinced that a mass defunding of public higher education is coming to an unprecedented degree and at an unprecedented scale. People enjoy telling me that this has already occurred, as if I am not sufficiently informed about higher education to know that state support of our public universities has declined precipitously. But things can always get worse, much worse. And given the endless controversies on college campuses of conservative speakers getting shut out and conservative students feeling silenced, and given how little the average academic seems to care about appealing to the conservative half of this country, the PR work is being done for the enemies of public education by those within the institutions themselves. And the GOP has already shown a great knack for using claims of bias against academia, particularly given the American yen for austerity. Meanwhile, in my very large network of professional academics, almost no one recognizes any threat at all. Many, I can say with great confidence, would reply to the poll above with glee. They would tell you that they don’t want the support of Republicans. There’s little attempt to grapple with the simple, pragmatic realities of political power and how it threatens vulnerable institutions whose funding is in doubt. That’s because there is no professional or social incentive in the academy to think strategically or to understand that there is a world beyond campus. Instead, all of the incentives point towards constantly affirming one’s position in the moral aristocracy that the academy has imagined itself as. The less one spends on concerns about how the university and its subsidiary departments function in our broader society, the greater one’s performed fealty to the presumed righteousness of the communal values. I cannot imagine a professional culture less equipped to deal with a crisis than that of academics in the humanities and social sciences and the current threats of today. The Iron Law of Institutions defines the modern university, and what moves someone up the professional ranks within a given field is precisely the type of studied indifference to any concerns that originate outside of the campus walls.

MBAs Shouldn’t Have to Apologize for Going into Finance - When I ask students graduating from Harvard Business School what they’re doing next, I often get some version of “I’m going into finance but…” Then they quickly explain that finance is just a way station on the route to nobler goals. I seldom, if ever, hear that apologetic tone from students choosing technology companies or consulting. Recently, I asked a few students how people react to their choice to go into finance, and I was greeted with nervous laughter. When pressed, they explained that most people conclude that someone choosing finance cares only about money — and cares little for others or for society. As graduates explain their career choices to family and friends, they will confront the idea that our best and brightest are wasting their talent in an industry that doesn’t do anything worthwhile. This reflects a historic bias against finance, as well as current anxieties on the loss of “real” jobs and justifiable concerns over widening income inequality. But this anti-finance sentiment is detached from the reality of the profession and obscures the promise and peril of a career in finance. The typical hand-wringing about young people going into finance also obscures the reality of how rewarding those jobs can be. I know many people who find finance intellectually rich and a source of lifelong learning. They often start a finance career not for the money but because they know that many other bright people go into the profession, and they want to be surrounded by them. Or, in later years, many migrate toward finance — even doctors and lawyers — as they discover that thinking hard about the value created by a business is fascinating. And it is truly fascinating. The questions in finance can be as intriguing and as challenging as the diagnostic problems facing doctors, the logical puzzles facing lawyers, the unresolved questions facing scientists, and the strategic challenges facing executives.

 More Than Two in Every Five Student Borrowers Aren't Making Payments -- A huge amount of Americans with student debt are finding it hard to keep up with their loans.More than 40% of Americans with federal student loans are behind in their payments or aren't making them at all. The data comes from a quarterly snapshot of the government's $1.2 trillion student-loan portfolio put out by the Department of Education. That means only 12.5 million Americans are current on their federal loan repayments of the 22 million who are out of school and took out loans.It's a slight improvement from last year, when the Education Department reported a non-payment rate of 46%, but much of the difference is due to more borrowers entering programs that lower their monthly obligations by tying them to borrowers' incomes. The number of borrowers in these programs jumped nearly 50% over the past year. Of the group that is behind on their student debt, 3.6 million haven't made payments in over a year, placing them in default. Another 3 million are at least a month behind. In a recent blog post published earlier this week, the Education Department wrote that those who don't pay back their federal student loans won't be arrested—but "it’s bad for your credit and your financial future, for starters." The department has trumpeted income-driven repayment plans as a way of responsibly addressing large student loans.

 As Paperwork Goes Missing, Private Student Loan Debts May Be Wiped Away -  NYT -- Tens of thousands of people who took out private loans to pay for college but have not been able to keep up payments may get their debts wiped away because critical paperwork is missing. The troubled loans, which total at least $5 billion, are at the center of a protracted legal dispute between the student borrowers and a group of creditors who have aggressively pursued them in court after they fell behind on payments.  Judges have already dismissed dozens of lawsuits against former students, essentially wiping out their debt, because documents proving who owns the loans are missing. A review of court records by The New York Times shows that many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.  Some of the problems playing out now in the $108 billion private student loan market are reminiscent of those that arose from the subprime mortgage crisis a decade ago, when billions of dollars in subprime mortgage loans were ruled uncollectible by courts because of missing or fake documentation. And like those troubled mortgages, private student loans — which come with higher interest rates and fewer consumer protections than federal loans — are often targeted at the most vulnerable borrowers, like those attending for-profit schools. At the center of the storm is one of the nation’s largest owners of private student loans, the National Collegiate Student Loan Trusts. It is struggling to prove in court that it has the legal paperwork showing ownership of its loans, which were originally made by banks and then sold to investors. National Collegiate’s lawyers warned in a recent legal filing, “As news of the servicing issues and the trusts’ inability to produce the documents needed to foreclose on loans spreads, the likelihood of more defaults rises.”

 How 1,000s Of Student Loans Worth Billions Are Getting Erased On A Technicality - National Collegiate Funding (NCF) is an umbrella name for 15 trusts that collectively hold 800,000 private student loans, totaling some $12 billion in outstanding obligations.  The only problem is that roughly $5 billion worth of those loans, or over 40%, are currently in default (and you thought auto delinquencies were bad).  Now, ordinarily when a student defaults on their loan, NCF simply files a lawsuit in local or state court as a means for negotiating a settlement or payment plan with the borrower.  Often times, NCF wins these cases automatically as the borrowers don't even bother to show up for their court date.  In cases like that, NCF can use their court victory to garnish wages and/or federal benefits from entitlement programs like Social Security which can haunt borrowers for decades (we actually wrote about it here:  Baby Boomers Increasingly Having Social Security Checks Garnished To Cover Student Loan Payments). That said, NCF is increasingly finding that, much like the subprime mortgage debacle from 10 years ago, student lending institutions apparently had a really hard time keeping tracking of paperwork over the years and/or processed deeply flawed contracts with incomplete ownership records and mass-produced documentation (who can forget that whole robo-signing catastrophe).  As the New York Times points out today, student loans, much like mortgages, are often originated at large commercial banks before being sold to numerous other financial institutions and ultimately ending up in a securitization owned by some unsuspecting European pension funds.  And while pooling these student loans in such a complicated way into securitizations apparently magically eradicates all default risk associated with the underlying loans (just ask any 22 year old on the JPM securitization desk and he/she will confirm the same), it also makes it extremely difficult to prove ownership.

Another blow for heartland workers: Slashed pensions - February was a bad month for Larry Burruel and thousands of other retired Ohio iron workers. His monthly take-home pension was cut by more than half from $3,700 to $1,600.Things have been rough in the Rust Belt, but this was a particularly powerful punch in the pocketbook for Burruel, who started in the trade at 19 and worked 36 years before opting for early retirement to make way for younger workers. Unfortunately, this sagging industry doesn't have enough younger workers to pay for retirees like Burruel, whose pension plan is in what the U.S. Treasury Department calls "critical and declining status."Burruel and the 4,000 members of his Cleveland Iron Workers Local 17 pension plan are the canaries in the coal mine as far as pension cutbacks go. At least 50 Midwestern pension plans -- mostly the kind jointly administered by trustees for a labor union and a group of employers -- are in this decrepit condition. Several plan sponsors have already applied to the Treasury Department to cut back retirees' allotments. This cross-section of America includes more than a million former truck drivers, office and factory employees, bricklayers and construction workers who are threatened with cutbacks that could last the rest of their lives. The Cleveland iron workers was the first to actually be approved for this triage under a 2014 law known as the Multiemployer Pension Fund Reform Act (MPFRA). Many pension advocates call it unfair.   "It was run through Congress in the dead of night, and President Obama -- who was supposed to be for the working class -- signed it," complained Burruel. The MPFRA is overseen by attorney Kenneth Feinberg, known for dividing up huge settlements in cases such as the 9/11 terrorist attack and the BP (BP) oil spill in the Gulf.

Here Are America's Most Underfunded Corporate Pensions --We spend a lot of time talking about the public pension crisis because, well, it's a massive $5 - $8 trillion dollar overhang on the economy and one which will undoubtedly result in some heartache for investors at some point in the future.  Unfortunately, there are some problems that are too large for even U.S. taxpayers to fix and, with an underfunding of $52,000 (mid-point) per household, somehow we suspect this is one of them.  Of course, our nation's various governmental institutions aren't the only ones to have unwittingly created massive ponzi schemes from which there is no escape.  In fact, as Bloomberg points out today, as of the end of 2016 over 90% of the top 200 corporate pensions in the S&P were unfunded to the tune of $382 billion. Here's a look at the funded status of the top 20:  Meanwhile, just the top 20 corporate pension funds are underfunded by over $100 billion.  So what happens when these massive corporate obligations become so underfunded that they can't possibly ever be fixed?  As the 400,000 pensioners in the Central States Pension Plans are all too familiar, the obligations get handed over the Pension Benefit Guaranty Corporation (PBGC), an entity which is nearly bankrupt itself, at which point payouts are slashed leaving retirees with about half of the monthly income they expected in retirement.

Social Security Will Be Paying Out More Than It Receives In Just Five Years --  When social security was first implemented in the 1930’s, America was a very different country.   The average life expectancy was roughly 18 years younger than it is now, and birth rates were a bit higher than they are now. By the 1950’s, the fertility rate was twice as high as it is in the 21st century. In other words, for the first few decades, social security seemed very sustainable. Most people would only live long enough to benefit from it for a few years, and there was an abundance of young workers who could pay into the system. Those days are long gone. As birth rates plummet and people live longer, (which otherwise should be considered a positive development) social security’s future is looking more and more bleak. No matter how you slice it, it doesn’t seem possible to keep social security funded. In fact, social security is going to start paying out more money than it receives in just a few short years. It may even be insolvent before the baby boomer generation dies off.According to the Social Security Board of Trustees, the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be depleted in 2034.When this happens, only 77 percent of benefits will be payable. That estimate is no change from last year’s estimate.In addition, the Disability Insurance trust fund will be depleted in 2028, which is an improvement from last year’s estimate of 2023. Once that fund is depleted, 93 percent of benefits will be paid.Right now, Social Security continues to take in through revenue more than it pays it through benefits, which is expected to continue until 2022. Once Social Security begins to pay out more than it takes in, it will be forced to liquidate the assets held by the trust funds. In 2016, Social Security generated $957 billion in income. It only paid out $922 billion including $911 billion in benefits to 61 million beneficiaries

‘Extreme’ Use of Painkillers and Doctor Shopping Plague Medicare, New Report Says - In Washington, D.C., a Medicare beneficiary filled prescriptions for 2,330 pills of oxycodone, hydromorphone and morphine in a single month last year — written by just one of the 42 health providers who prescribed the person such drugs.In Illinois, a different Medicare enrollee received 73 prescriptions for opioid drugs from 11 prescribers and filled them at 20 different pharmacies. He sometimes filled prescriptions at multiple pharmacies on the same day.These are among the examples cited in a sobering new report released today by the inspector general of the U.S. Department of Health and Human Services. The IG found that heavy painkiller use and abuse remains a serious problem in Medicare’s prescription drug program, known as Part D, which serves more than 43 million seniors and disabled people. Among the findings:

  • Of the one-third of Medicare beneficiaries in Part D (or roughly 14.4 million people) who filled at least one prescription for an opioid in 2016, some 3.6 million received the painkillers for at least six months.
  • Consistent with data released last week by the Centers for Disease Control and Prevention, there were wide geographic differences in prescribing patterns. Alabama and Mississippi had the highest proportions of patients taking prescription painkillers — more than 45 percent each — while Hawaii and New York had the lowest — 22 percent or less.
  • More than half a million beneficiaries received high doses of opioids for at least three months, meaning they took the equivalent of 12 tablets a day of 10-milligram Vicodin. The figure does not include patients who have cancer or those who are in hospice care, for whom such doses may be appropriate.
  • Almost 70,000 beneficiaries received what the inspector general labeled as extreme amounts of the drugs — an average daily consumption for the year that was more than 2 1/2 times the level the CDC recommends avoiding. Such doses put patients at an increased risk of overdose death. Extreme prescribing could also indicate that a patient’s identity has been stolen, or that the patient is diverting medications for resale.
  • Some 22,000 beneficiaries seem to be doctor shopping — obtaining large amounts of the drugs prescribed by four or more doctors and filled at four or more pharmacies. All states except for Missouri operate Prescription Drug Monitoring Program databases that allow doctors to check whether their patients have received drugs from other doctors before writing their own prescriptions.
  • More than 400 doctors, nurse practitioners and physician assistants had questionable prescribing patterns for the beneficiaries most at risk (meaning those that took extreme doses of the drugs or showed signs of doctor shopping). One Missouri prescriber wrote an average of 31 opioid prescriptions each for 112 patients on Medicare. And four doctors in the same Texas practice ordered opioids for more than 56 beneficiaries who seemed to be doctor shopping. “The patterns of these 401 prescribers are far outside the norm and warrant further scrutiny,” the inspector general said.

CDC: Half of Americans have diabetes or are at risk for it -- The Centers for Disease Control is reporting that nearly half of Americans have diabetes or are at risk of developing it.A new report out from the Centers for Disease Control indicates that nearly half of all Americans either have diabetes or are at high risk for developing the condition.Diabetes is a disease that hinders the body’s ability to produse and respond to insulun resulting in an abnormal metabolism. Prediabetes is a condition in which a person’s blood sugar is high but not high enough to be considered full-blown diabetes. If left untreated, prediabetes can eventually become type 2 diabetes. The CDC report shows that 30.4 million people in the U.S. have diabetes. Click HERE to see more of the statistics from the CDC report.

The Myth of Drug Expiration Dates -- The box of prescription drugs had been forgotten in a back closet of a retail pharmacy for so long that some of the pills predated the 1969 moon landing. Most were 30 to 40 years past their expiration dates — possibly toxic, probably worthless. But to Lee Cantrell, who helps run the California Poison Control System, the cache was an opportunity to answer an enduring question about the actual shelf life of drugs: Could these drugs from the bell-bottom era still be potent? . “Who gets the chance of analyzing drugs that have been in storage for more than 30 years?” The age of the drugs might have been bizarre, but the question the researchers wanted to answer wasn’t. Pharmacies across the country — in major medical centers and in neighborhood strip malls — routinely toss out tons of scarce and potentially valuable prescription drugs when they hit their expiration dates.Gerona and Cantrell, a pharmacist and toxicologist, knew that the term “expiration date” was a misnomer. The dates on drug labels are simply the point up to which the Food and Drug Administration and pharmaceutical companies guarantee their effectiveness, typically at two or three years. But the dates don’t necessarily mean they’re ineffective immediately after they “expire” — just that there’s no incentive for drugmakers to study whether they could still be usable. ProPublica has been researching why the U.S. health care system is the most expensive in the world. One answer, broadly, is waste — some of it buried in practices that the medical establishment and the rest of us take for granted.  We’ve documented how hospitals often discard pricey new supplies, how nursing homes trash valuable medications after patients pass away or move out, and how drug companies create expensive combinations of cheap drugs. Experts estimate such squandering eats up about $765 billion a year — as much as a quarter of all the country’s health care spending.

"It's Raining Needles" Locals Frustrated As Opioid Addicts Litter Ground With Syringes Drug-overdose deaths rose 19% in 2016 to 52,000, making drugs the leading killer of American adults under 50. And all evidence suggests these totals have continued to climb in 2017, propelled by the worsening opioid epidemic or the fact that more dangerous opioid analogues like fentanyl and carfentanil are findng their way into the drug supply. Indeed, the US has a higher rate of drug related deaths than any other developed country in the world. As we’ve reported previously, the epidemic is straining public resources like hospitals, local police departments, and child services which in many states have seen a surge in cases where the parents are addicted to opioids. To that list, we can now add local public health department in areas hit hard by the epidemic, which are struggling to clean up a flood of used and possibly infected needles discarded by addicts.  “They hide in weeds along hiking trails and in playground grass. They wash into rivers and float downstream to land on beaches. They pepper baseball dugouts, sidewalks and streets. Syringes left by drug users amid the heroin crisis are turning up everywhere.In Portland, Maine, officials have collected more than 700 needles so far this year, putting them on track to handily exceed the nearly 900 gathered in all of 2016. In March alone, San Francisco collected more than 13,000 syringes, compared with only about 2,900 the same month in 2016.” People, often children, risk getting stuck by discarded needles, raising the prospect they could contract blood-borne diseases such as hepatitis or HIV or be exposed to remnants of heroin or other drugs. .

As opioid overdoses exact a higher price, communities ponder who should be saved — The coroner here in the outer suburbs of Cincinnati gets the call almost every day. Man “slumped over the dining room table.” Woman “found in the garage.” Man “found face down on the kitchen floor of his sister’s residence.” Man “on his bedroom floor — there was a syringe beneath the body.” Coroner Lisa K. Mannix chronicles them all in autopsy reports. With 96 fatal overdoses in just the first four months of this year, Mannix said the opioid epidemic ravaging western Ohio and scores of other communities along the Appalachian Mountains and the rivers that flow from it continues to worsen. Hospitals are overwhelmed with overdoses, small-town morgues are running out of space for the bodies, and local officials from Kentucky to Maine are struggling to pay for attempting to revive, rehabilitate or bury the victims. As their budgets strain, communities have begun questioning how much money and effort they should be spending to deal with overdoses, especially in cases involving people who have taken near-fatal overdoses multiple times. State and local officials say it might be time for “tough love”: pushing soaring medical costs onto drug abusers or even limiting how many times first responders can save an individual’s life. “It’s not that I don’t want to treat overdose victims, it’s that the city cannot afford to treat overdose victims,” said Middletown Council Member Daniel Picard, noting this industrial town in northern Butler County might have to raise taxes in response to the crisis. The debate comes as demand for opioid antidote medication surges, creating new challenges for police and emergency crews already emotionally drained as they watch their communities — and, in some cases, families — torn apart by opioid addiction. Often, the only thing separating whether an overdose victim goes to the hospital instead of the morgue is a dose of naloxone, also known by the brand name Narcan, a medication that can reverse the effects of opioid overdoses. Two doses of an injectable form of naloxone, Evzio, cost $4,500, up from $690 in 2014. 

CRISPR Gene Editing Can Cause Hundreds of Unintended Mutations - Columbia University Medical Center —As CRISPR-Cas9 starts to move into clinical trials, a new study published in Nature Methods has found that the gene-editing technology can introduce hundreds of unintended mutations into the genome.“We feel it’s critical that the scientific community consider the potential hazards of all off-target mutations caused by CRISPR, including single nucleotide mutations and mutations in non-coding regions of the genome,” says co-author Stephen Tsang, MD, PhD, the Laszlo T. Bito Associate Professor of Ophthalmology and associate professor of pathology & cell biology in the Institute of Genomic Medicine and the Institute of Human Nutrition at Columbia University Medical Center.CRISPR-Cas9 editing technology—by virtue of its speed and unprecedented precision—has been a boon for scientists trying to understand the role of genes in disease. The technique also has raised hope for more powerful gene therapies that can delete or repair flawed genes, not just add new genes.The first clinical trial to deploy CRISPR is now underway in China, and a U.S. trial is slated to start next year. But even though CRISPR can precisely target specific stretches of DNA, it sometimes hits other parts of the genome. Most studies that search for these off-target mutations use computer algorithms to identify areas most likely to be affected and then examine those areas for deletions and insertions.“These predictive algorithms seem to do a good job when CRISPR is performed in cells or tissues in a dish, but whole genome sequencing has not been employed to look for all off-target effects in living animals,” says co-author Alexander Bassuk, MD, PhD, professor of pediatrics at the University of Iowa.

Chemotherapy may spread cancer and trigger more aggressive tumours, warn scientists --Chemotherapy could allow cancer to spread, and trigger more aggressive tumours, a new study suggests.   Researchers in the US studied the impact of drugs on patients with breast cancer and found medication increases the chance of cancer cells migrating to other parts of the body, where they are almost always lethal.  Around 55,000 women are diagnosed with breast cancer in Britain every year and 11,000 will die from their illness. Many are given chemotherapy before surgery, but the new research suggests that, although it shrinks tumours in the short term, it could trigger the spread of cancer cells around the body. It is thought the toxic medication switches on a repair mechanism in the body which ultimately allows tumours to grow back stronger. It also increases the number of ‘doorways’ on blood vessels which allow cancer to spread throughout the body.   Dr George Karagiannis, of the Albert Einstein College of Medicine of Yeshiva University, New York, found the number of doorways was increased in 20 patients receiving two common chemotherapy drugs. He also discovered that in mice, breast cancer chemotherapy increased the number of cancer cells circulating the body and in the lungs.  Dr Karagiannis said women could be monitored during chemotherapy to check if cancer was starting to circulate and doorways were emerging. 

The Chemicals in Your Mac and Cheese - Potentially harmful chemicals that were banned from children’s teething rings and rubber duck toys a decade ago may still be present in high concentrations in your child’s favorite meal: macaroni and cheese mixes made with powdered cheese.The chemicals, called phthalates, can disrupt male hormones like testosterone and have been linked to genital birth defects in infant boys and learning and behavior problems in older children. The chemicals migrate into food from packaging and equipment used in manufacturing and may pose special risks to pregnant women and young children.  The Food and Drug Administration has not banned their presence in foods, though a 2014 report to the Consumer Product Safety Commission urged federal agencies to assess risks “with a view to supporting risk management steps.” The report concluded that food, drugs and beverages, and not toys, were the primary source of exposure to phthalates. Now a new study of 30 cheese products has detected phthalates in all but one of the samples tested, with the highest concentrations found in the highly processed cheese powder in boxed mac and cheese mixes. The report, which was conducted by an independent laboratory and paid for by environmental advocacy groups, has not been published in a peer-reviewed journal. “The phthalate concentrations in powder from mac and cheese mixes were more than four times higher than in block cheese and other natural cheeses like shredded cheese, string cheese and cottage cheese,” said Mike Belliveau, executive director of the Environmental Health Strategy Center, one of four advocacy groups that funded the report. Others were the Ecology Center, Healthy Babies Bright Futures and Safer States.

Why this adorable mouse is to blame for the spread of Lyme disease -   White-footed mice — known for their wide eyes and ears, long tails and snow-white bellies and the feet from which they get their name — are often overlooked by humans, hiding out by the billions in U.S. forests, shrubby thickets and even wooded wetlands. But there's one creature that knows them well: the tick.Scientists say white-footed mice, which are primary carriers of the Lyme bacterium Borrelia burgdorferi, are a highly popular host of black-legged ticks — which consequently makes them a key culprit in the spread of Lyme disease. For Lyme disease transmission, “essentially, the only way people can get infected is through a tick bite,” said Richard Ostfeld, senior scientist at Cary Institute of Ecosystem Studies.  Scientists say that white-footed mice are posing a particularly high risk to humans this year. A bountiful acorn harvest a couple of years ago gave them the sustenance needed to reproduce in greater numbers and climate change may be pushing them to expand their range toward the north. “That's something of a worry because where the mice go, so too go the infected ticks,”  Ostfeld said there are areas in the United States where Lyme disease is rare and, in those places, few or none of the white-footed mice are infected. But in an endemic area such as one that extends from Virginia to Maine, at least half and sometimes up to 90 percent of the mice are infected with Lyme bacteria.There are about 30,000 reported cases of Lyme disease in the United States each year, according to the Centers for Disease Control and Prevention. However, because many cases are never reported, studies suggest that the number may be closer to 300,000, according to the health protection agency. Clive Jones, who has studied the connection between acorn production and Lyme disease in oak forests in the eastern United States, said that the more acorns there are in the fall, the greater the risk of Lyme disease to humans two years later. Because 2015 was a good year for acorns, 2017 could be a bad year for humans.

Brazil risks rodent-borne Hantavirus rise due to sugarcane, climate change - scientists | Reuters: TEPIC, Mexico, July 20 (Thomson Reuters Foundation) - The risk of being infected by the potentially fatal, rodent-borne Hantavirus could jump in Brazil's Sao Paulo state as climate change sends temperatures higher and farmers grow more sugarcane, said scientists. "Studies that concern this disease look at the virus aspect and not the landscape and climate aspect which is very important as it defines the species that transmits the disease and how people get infected," one of the study's authors, Paula Ribeiro Prist of the University of Sao Paulo, told the Thomson Reuters Foundation. The virus, which can be inhaled or caught via contact with rodent droppings or urine, causes Hantavirus Cardiopulmonary Syndrome (HCPS), which is fatal in more than half of cases. No vaccine is available for HCPS and while the likelihood of catching it is rare, any potential rise in cases is significant given how deadly the disease is, said the report. Warmer temperatures related to climate change and more land set aside for sugarcane, that rodents find nutritious, could boost rodent numbers and increase the time the virus is active in the environment, said scientists. Increased sugarcane production alone could expose 20 percent more people to the risk of the disease in Brazil's wealthiest state, and this could rise to up to 34 percent by 2050 once temperature hikes are added to the mix, said the report. 

A Google Company Is Unleashing 20 Million Mosquitoes in California to Fight Zika - Verily is releasing millions of male mosquitoes treated with a naturally occurring bacteria that renders them sterile in Fresno. This is the largest such field trial in US history and part of a major effort to fight Zika virus and dengue fever.Verily, the life sciences arm of Google's parent company, Alphabet, has created a robot that raises about one million mosquitoes every week in an automated lab.It uses them to produce infertile male insects treated with naturally occurring Wolbachia bacteria, and has used its custom-built machines and algorithms to increase its production of mosquitoes. The first groups of 20 million sterilised mosquitoes have already been released in Fresno County, California.Last October, Verily announced its initiative to fight mosquito-borne diseases such as dengue fever and Zika virus. Verily's effort makes use of an automated sex-sorting procedure to ensure that only males are released, as males do not bite humans. When they mate with females in the wild, the eggs cannot develop or hatch.  The release of the treated male insects in Fresno is the largest such field trial in the US to date. While other release projects have been managed by hand, Verily's automated system allows for the release of far more mosquitoes in a short period of time. This in turn may offer a faster response; a critical factor when serious diseases are potentially being spread. Adding that a field trial in Australia is planned for later this year, Upson said, "We want to show this can work in different kinds of environments."

Bee Study Author Fights Back Against Bayer and Syngenta Accusations -- The lead author of a major study which found that neonicotinoid pesticides harm honey bees has hit back against criticism from the chemical companies that part-funded the work.  Dr. Ben Woodcock from the Centre for Ecology and Hydrology (CEH) , said Bayer and Syngenta, which produce the controversial pesticides , had looked to undermine his work after it was published, despite providing $3 million in funding.  Speaking exclusively to Energydesk , he said:  "From a personal perspective, I don't really appreciate having them accuse me of being a liar. And accusing me of falsifying results by cherry-picking data. That's not what we've done. I've got little to gain from this and it's been a major headache. We just present the results we get."  Both companies have accused the scientists of overstating the threat posed by neonicotinoids to both honey and wild bees, adding that the data, as they saw it, did not reflect the conclusions from CEH. After the study was published a Bayer spokesperson told Energydesk: "This study is one of a number of landscape studies carried out recently. The results of the CEH study are inconsistent and therefore inconclusive with variability of effects over both the bee species and the countries in which they were studied." The company's head of UK government media relations, Dr. Julian Little, told Energydesk: "We're quite frustrated about how these results have been portrayed. The reality seems to be a long way away from the headline." Syngenta's environmental specialist Peter Campbell told the press that CEH had misrepresented the study and argued that full results of the experiments showed neonicotinoids had no effect in the vast majority (238 of the 258) of the 258 potential effects measured.  Quoted in The Times , Campbell also suggested the results had been talked up in order to get published in a prestigious journal.

Why Dicamba-Tolerant Soybean Technology Is in Trouble - Off-target movement was one of the concerns when Monsanto unveiled its Roundup Ready Xtend System featuring a soybean and cotton trait that tolerates dicamba and glyphosate. “Dicamba appears to be moving miles,”  So far, the soybean dicamba damage tally in Missouri is 203,045 acres. Total Missouri soybean acreage planted for 2017 is 6 million acres, according to USDA. Other dicamba-damaged crops MDA identified as of late last week include:

  • 6,400 tomato plants
  • 73 acres of watermelons
  • 18 acres of cantaloupes
  • 5 acres of a vineyard
  • 2 acres of pumpkins
  • 24 acres of certified organic vegetables
  • Several residential gardens, trees, and shrubs

Damage from off-target movement led the Missouri Department of Agriculture (MDA) to temporarily suspend sale and application of dicamba last Friday. The order applies to all dicamba formulations, including Xtendimax, FeXapan, and Engenia. Arkansas also has temporarily suspended sale and application of dicamba. This only applies to Engenia, the only formulation that the state approved for over-the-top use this growing season.    Damage also has emerged in other states. There have been around 55 complaints so far in Mississippi, and around 77 so far in Tennessee. Last Thursday, Aaron Hager, University of Illinois Extension weed specialist, tweeted he had more calls and questions and interviews related to dicamba than he’d had for the past 15 years combined.

Cane Toad Glyphosate Based Mutations Destroying Australian Ecosystem - Sustainable Pulse - Scientists in Hungary have discovered that toad tadpoles, which have come into contact with the globally–used weedkiller Glyphogan, produce much more of the toxic chemicals used to ward off predators. The findings, published by The Royal Society on Wednesday, are particularly relevant to Australia’s cane toad population. Scientists say they fear Australian feral cane toads could become even more toxic, due to the wide variety of habitats on offer, and the amount of pollutants and pesticides our cane toads are exposed to.“Our results indicate that pesticide pollution might exacerbate the problem of invasive toxic species,” author of the study Veronika Bokony said.“For example, in Australia, the survival of native tadpoles is reduced by poisoning from ingestion of toxic cane toad eggs, and predators suffer drastic mortality due to ingesting or mouthing cane toads.” The study involves testing the effects of the glyphosate-based weedkiller Glyphogan on a vast amount of common tadpoles in a laboratory and a pond at an experiment station near Budapest.Results showed that all of the exposed tadpoles produced significantly more amounts of bufadienolides (the toxic steroids used by as toads, snakes, and certain plants) after being exposed to Glyphogan for between nine days and three weeks. The developments spell bad news for our native ecosystems, with scientists opining that the more toxic toads become, the more their predators may switch to other prey.

'Uncertainty and dysfunction' have overtaken USDA program for organic foods, lawmaker says - Chicago Tribune: The far-reaching difficulties that the U.S. Department of Agriculture has in determining whether imported "organic" food meets standards or is fraudulent means that it's hard to know what products can be trusted, a grain industry executive told a Senate committee on Thursday, as lawmakers prepare the next farm bill. The testimony comes after news that millions of pounds of shipments of questionable "organic" products have reached U.S. ports.The Senate Agriculture, Nutrition and Forestry Committee is collecting information as lawmakers prepare the next major agriculture legislation, and it appears that one key lawmaker is ready to shake up the way the USDA regulates what can be sold as "organic.""It seems that uncertainty and dysfunction have overtaken the National Organic Standards Board and the regulations associated with the National Organic Program," Sen. Pat Roberts, R-Kan., chairman of the committee, said in his opening remarks. "These problem create an unreliable regulatory environment and prevent farmers that choose organic from utilizing advancements in technology and operating their business in an efficient and effective manner. Simply put, this hurts our producers and economies in rural America." It was not clear what new technology he was referring to, however, though whether to classify "hydroponics" as organic has become a contentious question among organic farmers. Roberts also expressed frustration with fraudulent organic imports. After hearing a year ago from constituents concerned about import fraud, Roberts said, he pushed for USDA action. It appears he didn't get what he was looking for. Then, last month, The Washington Post reported on three major shipments of corn and soybeans that were sold as "organic" despite evidence to the contrary. The three shipments, each involving millions of pounds of "organic" corn or soybeans, were large enough to constitute a meaningful proportion of the U.S. supply of those commodities. 

What counts as USDA organic? - The Gazette: — Of all the cartons of organic eggs sold in the United States, more than 1 in 10 originates from a complex here that houses more than 1.6 million hens.They’re sold under the Eggland’s Best label.“The entire process is organic,” Greg Herbruck, president of Herbruck’s Poultry Ranch says in a promotional video.Details of the operation are not publicly available, however, and he declined a Washington Post reporter’s request for a visit, citing the possibility that it could infect the flock with disease, such as avian flu.But according to people familiar with the operation, as well as a building plan, each of the nine long rectangular barns at Herbruck’s holds about 180,000 birds, or more than three hens per square foot of floor space, according to sources, who spoke on the condition of anonymity because they had not been authorized to speak for the company.None of the birds is allowed to set foot outside, sources said.Under USDA requirements, organic livestock are supposed to have access to the “outdoors,” get “direct sunlight” and “fresh air.” The rules prohibit “continuous total confinement of any animal indoors.” Organic livestock are supposed to be able to engage in their “natural behavior,” and for chickens, that means foraging on the ground for food, dust-bathing and even short flights.Katherine Paul of the Organic Consumers Association said the Herbruck’s operation betrays consumer expectations.“This is not at all what consumers expect of an organic farm,”

Degeneration Nation: Connecting the Dots Between Factory Farms, Roundup, GMOs, and Fake 'Natural' Foods -- After decades of trying to reform public policy on food and farming, including an intense four-year battle to force mandatory labeling of GMOs (rudely terminated in 2016 when Congress and the Obama administration rammed through the outrageous DARK Act), food activists and conscious consumers find ourselves wondering “what’s the use of lobbying the government?” Do we really think the Trump administration, the Republican Congress, and farm state and Establishment Democrats care about the toxicity, exploitation and environmental destruction of our food system?The culinary directive from Congress and the White House this summer goes something like this: Don’t worry. Shut up and eat your Frankenfoods, cheap junk foods, and factory-farmed meat, dairy and poultry. Don’t worry about Monsanto’s Roundup or Dow’s neonic residues in your food and water. Don’t worry about the dubious fare at your local supermarkets, including thousands of products fraudulently labeled or advertised as “natural.” Don’t worry about cancer, diabetes, heart attacks or supersizing yourself and your kids with chemical and GMO-tainted food, we’re told. Don’t worry about contaminated food pouring in from China and Brazil. Don’t worry about mutant genes, pesticide residues, antibiotics, hormone disruptors, BPA and other carcinogens and hormone disruptors. And don’t worry about global warming, or the precarious state of bees, birds and the environment. Put your trust in America’s industrial food system and factory farms and Monsanto’s minions--indentured scientists, politicians, regulatory agencies and the mass media.

China tightens grip on world seeds sector with $1.1bn purchase from Dow: China's growth as a force in the global seeds industry took another step forward as the country's Citic Agri Fund paid $1.1bn for Brazilian assets sold by Dow Chemical to meet anti-trust concerns over its merger with DuPont. Dow Chemical said that it had signed a "definitive agreement" to sell Citic Agri Fund Brazilian corn seed operations including processing plants, research centre, the Morgan seed brands and a copy of the US group's Brazilian germplasm bank for the grain. The assets sold generated revenues of $257m last year, out of total Dow agriculture division sales of $6.17bn. And it represents a further strengthening by China of its position in the world seeds market – a grip strengthened signally by Chemchina's $43bn purchase of Swiss-based Syngenta, the largest foreign takeover by a Chinese group. At a smaller level, Origin Agritech revealed in December it had become the first Chinese biotech seed company to export genetically modified corn seeds to the US, for field tests taking place this summer. The purchase by Citic Agri Fund comes a year after the fund - which is aimed at investing "in the core value of agriculture" - was established by the farm arm of Citic, the state-backed congolomerate, along with three listed Chinese agricultural companies.

Here's Who's Getting Paid to Destroy the Endangered Species Act - A small yet vocal group of congressmen are gearing up this summer to dismantle the Endangered Species Act (ESA). Campaign finance records of these lawmakers reveal that they have all taken significant money from extractive industries frustrated by the law's protection of critical habitat for endangered species .  The ESA has proven to be a powerful, effective conservation safeguard. More than 99 percent of species that have been designated for federal protection continue to exist in the wild today, including the bald eagle, grizzly bear, the leatherback sea turtle and the Florida manatee. But the work of the ESA has only grown more urgent as many scientists agree that the planet is either on the cusp of or already experiencing a sixth mass wave of extinction. A study last week by Stanford scientists found that a significant number of plant and wildlife populations are growing dangerously thin. The assault on the ESA comes in the form of dozens of legislative proposals and amendments tacked onto spending bills. One bill that's expected to be introduced in a matter of weeks is the handiwork of Sen. John Barrasso (R-WY), chair of the Senate Environment and Public Works Committee.   A Republican from Wyoming, Barrasso shares something in common with other politicians who have made it a legislative priority to weaken or undermine this conservation law. He's received substantial campaign contributions from extractive industries that wish to exploit public lands for mining, drilling and other environmentally destructive operations.  Sen. James Inhofe, a Republican senator from Oklahoma who also serves on the Environment and Public Works Committee, has also garnered substantial support from the fossil fuel industry, collecting $465,950 from the oil and gas industry and $111,275 from the mining industry in campaign donations from 2011 to 2016. Rep. Rob Bishop, a Republican congressman from Utah who has gone on the record saying he'd like to "repeal and replace" the Endangered Species Act, received $150,516 in total campaign contributions from the oil and gas industry in the 2015-16 cycle alone.

One of worst droughts in decades devastates South Europe crops | Reuters: Drought in southern Europe threatens to reduce cereal production in Italy and parts of Spain to its lowest level in at least 20 years, and hit other regional crops including olives and almonds. Castile and Leon, the largest cereal growing region in Spain, has been particularly badly affected, with crop losses estimated at around 60 to 70 percent. "This year was not bad, it was catastrophic. I can't remember a year like this since 1992 when I was a little child," said Joaquin Antonio Pino, a cereal farmer in Sinlabajos, Avila. Pino said many of his fields had not even been harvested, because crop revenues would not cover the wages of labourers who gathered them. While the EU is collectively a major wheat exporter, Spain and Italy both rely on imports from countries including France, Britain and Ukraine. Spanish soft wheat imports are expected to rise by more than 40 percent to 5.6 million tonnes in the 2017-2018 marketing year, according to Agroinfomarket. The drought has helped support EU wheat futures, which have risen around 6 percent since the beginning of June, although the prospect of a larger harvest in France this year should ensure adequate overall supplies in the trading bloc.Spain and Italy are also among the world's top producers of olive oil. Production in both countries is expected to fall, but the decline is likely to be particularly steep in Italy, where drought is the latest headache for olive growers already plagued by insects and a bacterial disease in recent years. A 60 percent drop in Italian output is forecast by the International Olive Council. 

Drought in High Plains the worst some farmers have ever seen - ABC News: 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. "We're just trying to make it through and work it out," she said. "There are a lot of people in the same boat. I don't know what the answer is." 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," Goehring said, though he didn't put a figure on how much costs might go up for shoppers. "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.

Maize, rice, wheat: alarm at rising climate risk to vital crops  -  Governments may be seriously underestimating the risks of crop disasters occurring in major farming regions around the world, a study by British researchers has found. The newly published research, by Met Office scientists, used advanced climate modelling to show that extreme weather events could devastate food production if they occurred in several key areas at the same time. Such an outcome could trigger widespread famine. The scientists, led by Chris Kent, of the Met Office, focused their initial efforts on how extreme weather would affect maize, one of the world’s most widely grown crops. Heat and drought were the prime risks, although flooding was also included in the analysis. The group found there is a 6% chance every decade that a simultaneous failure in maize production could occur in China and the US – the world’s main growers – which would result in widespread misery, particularly in Africa and south Asia, where maize is consumed directly as food. “The impact would be felt at a global scale,” Kent told the Observer. “This is the first time we have been able to quantify the risk. It hasn’t been observed in the last 30 years, but the indications are that it is possible in the current climate.” An example of the kind of disaster that could occur is provided by the maize harvests that failed last year in Africa. Communities in Zambia, Congo, Zimbabwe, Mozambique and Madagascar were affected and six million people were left on the brink of starvation. A joint failure of China and America’s maize harvest would have a far greater impact. 

California farm region plagued by dirty air looks to Trump  (AP) — California's vast San Joaquin Valley, the country's most productive farming region, is engulfed by some of the nation's dirtiest skies, forcing the state's largest air district to spend more than $40 billion in the past quarter-century to enforce hundreds of stringent pollution rules. The investment has steadily driven down the number of days with unhealthy air — but on hot, windless days, a brown haze still hangs overhead, sending wheezing people with tight chests to emergency rooms and hundreds each year to an early grave.Despite the air district's efforts, the valley's air still violates federal standards for sooty pollution that comes from industry, businesses and vehicles. In California, where Democratic Gov. Jerry Brown is an outspoken leader in the global fight against climate change, the San Joaquin Valley Air Pollution Control District now is waging a very public campaign against enforcement of the landmark U.S. Clean Air Act that includes ever-tightening air quality standards the district says it cannot meet. Officials in the relatively conservative region have seized upon the election of Donald Trump, who won the popular vote in half of the district's eight counties in November — a far stronger performance than in most of California.The district's website prominently displays a report titled "Presidential Transition White Paper" that the director provided to the incoming Trump administration in calling for the elimination of the federal Air Act's "costly bureaucratic red tape." District Executive Director Seyed Sadredin also reached out to Bakersfield Republican Kevin McCarthy, the GOP's U.S. House majority leader. And he testified in Washington for a bill co-authored by McCarthy that would limit new air standards under the Air Act to once every 10 years, instead of five. "Regulators in Washington have issued blanket regulations that would unfairly impact the Central Valley's unique air challenges," McCarthy said 

Trump Nominates Climate-Denying, Conservative Talk Show Host as USDA's Top Scientist - President Trump on Wednesday nominated Sam Clovis , a former economics professor and conservative talk show radio host, to the U.S. Department of Agriculture's (USDA) top scientific position.  Clovis, an early advisor to the Trump campaign, has a master's in business administration and a doctoral degree in public administration, and appears to have no published scientific or academic work to his name. The position he is nominated for, which is tasked to provide scientific direction and uphold "scientific integrity" at the USDA, has previously been held by distinguished scientists with deep expertise in certain issue areas.  In a 2014 interview, Clovis called evidence of climate change "junk science," claiming that he has "enough of a science background to know when I'm being boofed."

Trump just nominated a climate change skeptic to USDA’s top science post -  President Trump on Wednesday nominated Sam Clovis, a former college professor and talk radio host who has challenged the scientific consensus that human activity has been the primary driver of climate change, to serve in the Agriculture Department’s top scientific post.“Dr. Clovis was one of the first people through the door at USDA in January and has become a trusted advisor and steady hand as we continue to work for the people of agriculture,” Agriculture Secretary Sonny Perdue said in a statement Wednesday evening. “He looks at every problem with a critical eye, relying on sound science and data, and will be the facilitator and integrator we need. Dr. Clovis has served this nation proudly since he was a very young man, and I am happy he is continuing to serve.”Clovis, whose expected nomination has been previously reported by The Washington Post and several other outlets, is a former economics professor at Morningside College in Sioux City, Iowa, who served as one of Trump’s first campaign policy advisers. In a 2014 interview with Iowa Public Radio, he said he was “extremely skeptical” about climate change and added that “a lot of the science is junk science.”“It’s not proven; I don’t think there’s any substantive information available to me that doesn’t raise as many questions as it does answers,” Clovis said in the interview. “So I’m a skeptic.”  This position represents a departure from the scientific consensus. In its most recent report, the U.N. Intergovernmental Panel on Climate Change concluded that it is “extremely likely” that, since the 1950s, humans and their greenhouse gas emissions have been the “dominant cause” of the planet’s warming trend. Neither USDA nor Clovis responded to inquiries earlier this week about the prospect of his appointment, and his views on climate science.

China's air quality deteriorates due to winter pollution: official | Reuters: (Reuters) - Air quality in China worsened in the first half of 2017, with 338 cities including the capital Beijing on average reporting fewer clean air days due to winter pollution in January and February, an official at the Ministry of Environmental Protection said. Between April and June, air quality improved as the government stepped up pollution inspections, Liu Youbin, inspector at the ministry's department of publicity and communications, said at a media briefing in Beijing on Thursday. Air pollution often worsens during China's winter months due to a rise in heating demand by residents dependent on coal-fired power stations for power. Air quality in 338 of China's largest cities on average deteriorated in the first six months, the ministry said on Wednesday, with 74.1 percent of all days during the period experiencing clean air, down 2.6 percentage points from a year earlier. Levels of PM 2.5 - dangerous tiny pollutants in the air - averaged 49 micrograms per cubic meter during the period, unchanged from a year earlier. In Beijing, 55.3 percent of the January-to-June period were good days, down 5.8 percentage points. Concentrations of PM 2.5 in the Chinese capital rose 3.1 percent to 66 micrograms per cubic meter. Beijing has set a target of 60 micrograms per cubic meter for the whole year.

'Extreme And Aggressive' California Wildfires Force Thousands to Evacuate - A wildfire in the foothills near Yosemite National Park has consumed eight structures — and is threatening 1,500 more in tiny Mariposa, Calif. The town's 2,000 residents have been ordered to evacuate because of the blaze known as the Detwiler Fire, and Gov. Jerry Brown has issued a state of emergency for Mariposa County. The California Department of Forestry and Fire Protection, known as Cal Fire, posted on its website that "firefighters experienced extreme and aggressive fire behavior" on Tuesday. "Firefighters on the ground as well as aircraft are actively working to contain and suppress the fire." The Detwiler Fire has burned more than 45,000 acres and is just 7 percent contained, and it threatens "culturally and historically sensitive areas," the agency says. "I haven't seen these conditions in a long time, it's a wind driven, slope-driven, fuel-driven fire," Cal Fire's Jerry Fernandez told Fresno's ABC affiliate. Mariposa is about 150 miles east of San Jose, Calif.  About 4,000 people have had to flee their homes because of the fire, The Los Angeles Times reports; temperatures are expected to drop a few degrees on Wednesday, but humidity and winds will likely continue. Cal Fire spokesman Koby Johns says that the cause of the fire is unknown but that its speed is due to the region's drought being followed by heavy rains.

'An insane amount of heat' as fire near Yosemite National Park moves with frightening speed -- It has destroyed 29 structures, temporarily cut off power to Yosemite National Park and threatened the historic gold-mining town of Mariposa, sending its residents fleeing. It’s sent its smoke as far away as Idaho, and it burned so hot that it created its own weather system. If the Detwiler fire, which has moved with frightening speed this week through the rugged terrain of rural Mariposa County, was looking to make a dramatic statement, it succeeded. The blaze — which has forced 4,000 people from their homes — nearly doubled in size overnight Tuesday, exploding from 25,000 acres to 45,724 acres, the California Department of Forestry and Fire Protection said Wednesday. By Wednesday evening, the fire was only 7% contained and had burned about 48,000 acres, according to Cal Fire. It was burning about 35 miles west of Yosemite National Park and had gotten within a mile of central Mariposa, officials said. The flames are being fed by tall grass and overgrown shrubs that sprouted along the central Sierra Nevada foothills during the winter rains, said Jordan Motta, a fire captain and Cal Fire spokesman. The rich fuel source has created fire activity that “we haven’t seen in the last seven or eight years,” he said. Officials said the fire also was burning in an area where there are many dead trees, killed by bark beetles and years of drought. As the conflagration snaked through hills and canyons, conditions on the ground and around the blaze became so intense that a large pyrocumulus cloud formed. So-called fire clouds develop when a blaze is so hot that it can create its own environment, said Jim Andersen, a meteorologist with the National Weather Service in Hanford. “Any time you see a fire with a pyrocumulus, you know the fire is really roaring,” he said. “It takes an insane amount of heat.”

No Respite For Tens Of Thousands Of Canadians Fleeing Wildfires: Tens of thousands of people who fled wildfires in western Canada were unable to return home Tuesday as the massive blazes raged on. Officials said that 155 fires were still burning in British Columbia province, where the flames have already consumed more than 327,000 hectares (808,000 acres) of forest and uncultivated land. Of the active blazes, 15 present a "real threat to communities," said British Columbia fire spokesman Kevin Skrepnek. Although small numbers of people have been able to return to their homes, around 46,000 people remain displaced by the inferno. Some 1,000 residents of Cache Creek, around 100 kilometers (60 miles) west of Kamloops, were able to return home 11 days after they were first evacuated, but under warning they may have to flee again at short notice.Families who returned home were set to receive about Can$ 600 ($475 US) in aid from the Red Cross, said Transport Canada official Robert Turner. In Kamloops itself, a town of some 100,000 people 350 kilometers northeast of Vancouver, volunteers and emergency services were preparing to receive thousands of evacuees. Food and water were being handed out underneath canvas awnings, while evacuees were offered counseling or help filling out compensation forms. 

Adriatic fires prompt evacuations in Montenegro and Croatia - BBC News: Montenegro has appealed for international help to fight forest fires as neighbouring Croatia battles to stop flames reaching its second city, Split. Fires have raged along the Adriatic coast for days, prompting dozens of tourists and residents to flee the Lustica peninsula in Montenegro. A shopping centre in Split had to be evacuated as the flames grew nearer. Government ministers have headed to Split for an emergency meeting. President Kolinda Grabar Kitarevic cut short a visit to Austria because of the crisis. Strong northerly winds and weeks of hot temperatures have made the situation more acute. The flames were whipped up by a storm late on Monday and some areas on the outskirts of Split were evacuated. Roads to the south of the city were reportedly cut off by the fires. A waste dump was set alight and the army were called in to prevent a village from going up in flames. By late on Monday evening, the mayor said the worst was over but some suburbs to the south still appeared to be at risk. Tourism officials in Croatia said no visitors to the region had been harmed and they expected the fires to be brought under full control as the winds decreased. Further to the south on the Adriatic coast, in Montenegro, fires threatened the northern towns of Tivat and Herceg Novi and the flames had already reached the village of Durasevici. Other countries in southern Europe are battling fierce fires too. Fire broke out in a pine forest at Castelfusano, on the Italian coast south-west of Rome, and the smoke was visible from the beaches at Ostia. In Portugal, a state of emergency was declared in an area in the east, a month after 64 people died in fires in the Pedrógão Grande region further north. 

 Wildfires Roar Across Southern Europe - Strong winds, dry weather and high temperatures: The fire season is in full swing across the Mediterranean. In France, fires raged on Tuesday less than 10 miles from the resort city of Nice. In Croatia, fires have damaged homes in the historic city of Split. And in Montenegro, the authorities have asked NATO for assistance in dealing with fires that had forced evacuations along the coast. Firefighters, backed by planes spraying fire-retardant materials, were trying to contain a blaze in the southern French town of Castagniers, just north of Nice. Significant fires were also reported in the Provence region of southeastern France, and on the French island of Corsica. The fire near Nice began Monday evening but was “under control” by midday Tuesday, Jean-Gabriel Delacroy of the Alpes-Maritimes administrative department told The Associated Press, adding that no homes had been damaged.  The fires that threatened Split, the second largest city in Croatia, were also largely under control after a dozen houses burned along the coast, The A.P. reported, citing Prime Minister Andrej Plenkovic. The Continent got a taste of what was to come last month, when a blaze tore through central Portugal, leaving more than 60 people dead; Prime Minister António Costa said the fire had brought “a dimension of human tragedy that we cannot remember.” Portugal hasn’t been spared from the latest devastation, with fires now burning in the Mangualde district, about 75 miles north of where the blazes spread last month.

 Public Lands and Waters 'For Sale' at U.S. Dept. of the Interior -- Greenpeace placed a giant sign reading "For Sale: By the US Department of Interior, Public Lands and Waters, Inquiries From Oil and Gas Companies Encouraged" outside of the Interior Department Tuesday as Sec. Zinke held an event outside the building. Sec. Zinke and the Interior Department are currently reviewing the status of national monuments , marine sanctuaries, and protections from offshore oil and gas drilling , potentially opening up new drilling activity in the Arctic , Atlantic and Pacific Oceans. Public records highlight that Zinke's personal schedule includes several meetings with oil and gas companies and lobbying firms including BP America, Chevron and ExxonMobil, the American Petroleum Institute, the Western Energy Alliance and Continental Resources. "The Trump administration and Secretary Zinke want to sell our public lands and waters away to desperate fossil fuel companies," said Greenpeace USA Climate Campaigner Mary Sweeters. "Secretary Zinke is meeting almost exclusively with fossil fuel lobbyists, ignoring the voices of people in this country who want to see our public lands, national monuments, and waters protected, not exploited. It's clear that unless you are an executive at Exxon or the company building the Dakota Access Pipeline, Zinke's Interior Department will most likely not listen to you."

Robert Redford, Ed Harris, Elle Fanning to Congress: Oppose Mass Slaughter of Wild Horses - Robert Redford, Ed Harris, Elle Fanning, Ian Somerhalder and countless other equine enthusiasts joined The Humane Society of the United States , Humane Society Legislative Fund , Return to Freedom and the American Society for the Prevention of Cruelty to Animals to draw attention to the threat posed to wild horses and burros. Since the implementation of the Wild and Free-Roaming Horses and Burros Act, the Bureau of Land Management (BLM) has attempted to maintain stable populations by rounding up and removing thousands of horses and burros from the wild, despite repeated directives that this was leading the program to financial instability. The Humane Society of the United States, Humane Society Legislative Fund, Return to Freedom and the American Society for the Prevention of Cruelty to Animals have long called for the agency to cease these actions and instead redirect money spent on capturing and holding wild horses toward available solutions, including judicious use of safe, proven fertility control on the range. The BLM did not listen, and now they want to fix their mistakes by slaughtering wild horses. Provisions in the budget proposed by the administration would allow the BLM to kill captured wild horses or sell them without restriction—a change that would enable buyers to purchase wild horses on the cheap and haul them to Canada or Mexico for slaughter. If Congress approves provisions in the president's budget, then tens of thousands of horses will die. 

Mass dolphin deaths off France, UK likely due to trawling  - British and French researchers say the number of dead dolphins washing up on their shores is at its highest level in more than 14 years. In the first six months of this year, more than a thousand dolphin carcasses have been spotted on beaches in southwest England and along France's Atlantic coast. While local media have described the deaths as a mystery, many scientists blame large-scale fishing trawlers for the harm to humankind's closest intellectual rivals. Although dolphins, like all other sea mammals, die for a whole range of reasons - including pollution, disease and starvation - the sudden spike in deaths has researchers concerned that aggressive, profit-seeking fishing trawlers may also have a large part to play.   Dolphins wash up on beaches like Newquay in Cornwall, which are used by thousands of surfers and sunseekers More than a decade ago, Hingley and other researchers noticed a sudden increase in the number of dolphins turning up dead on nearby beaches. After months of research and numerous autopsies, scientists attributed much of the increase to so-called pair trawling in the English Channel - where two fishing trawlers set out to sea pulling a gigantic net between them through the water and along the sea bed. The dolphins would feast on the huge shoal of sea bass at the mouth of the trawl - not realizing that they, too, were about to get caught up in a kilometer-long net.   In their attempts to escape the trawl, she said they would often break their own backs or beaks in the process, experiencing "terrible pain and suffering - with their organs literally exploding because they've been held down so long." 

Record number of environmental activists killed around the world - BBC News: Growing competition for land and natural resources saw a record number of environmental activists killed in 2016, says Global Witness. The green group's report details at least 200 murders across 24 countries, up significantly from 2015. Disputes over mining were the cause of the greatest number of killings, followed by logging and agribusiness.  Brazil saw the most deaths overall, but there were big increases in Colombia and India.Global Witness has been publishing annual reports on the threats to activists since 2012, although it has data going back to 2002. The organisation compiles its analysis from media sources, information from other non-governmental organisations and from the UN. It also verifies the data with monitoring groups in priority countries, such as Brazil, Colombia, Honduras and the Philippines. Some 60% of the killings last year took place in Latin America, with a significant number of victims from indigenous communities. According to those who compiled the report, those doing the killing have become bolder in recent years."We've always thought of these cases taking place in remote isolated areas but we are seeing attacks becoming more brazen, and that's because so few of these cases result in successful prosecutions," said Billy Kyte from Global Witness."Indigenous people are massively over represented in the figures and that's because many of their lands overlap with lands rich in minerals and timber and also because they have less access to justice or communications."

Half of All Plastic That Has Ever Existed Was Made in the Past 13 Years -- Now, for the first time, researchers have published a sweeping, public, and in-depth accounting of all plastic that has ever been made in the entire world. The number is so big as to defy human comprehension: 8,300 million metric tons since 1950. Of this, 6,400 million metric tons has outlived its usefulness and become waste; 79 percent of that waste is sitting in landfills or the natural environment, 12 percent has been incinerated, and just 9 percent has been recycled. Perhaps the most eye-popping statistic in the study is how quickly plastic production has been accelerating in just this millennium. The world has made as much plastic in the past 13 years it did in the previous half-century. “I think [that’s] the number that captures it best,” says Roland Geyer, an industrial ecologist at the University of California, Santa Barbara and an author on the study. We’re still rushing headlong into the plastic age. It’s worth considering how much the rise of plastic is tied to the rise of oil and gas. Around this time, the United States began using a lot more oil. Oil is easy to make into plastic, and and it is cheap to do so. These economic forces helped create a new category of product: the disposable, single-use plastic packaging. Packaging is now the largest plastic market, and it’s still tied to fossil fuels. In June, The Wall Street Journal reported on how the United States’ natural gas boom was translating into cheaper plastic pellets. The Dow Chemical Company wants to send its plastic pellet to places like Brazil, where it’s betting that a rising middle class will want the convenience of single-use plastic baby-food containers. Developing countries in South America and Asia account for much of the recent growth in plastics consumption. These economic forces also govern how plastic gets recycled—or doesn’t. It’s often cheaper just to make virgin plastics, especially if you need plastic of a certain hardness or durability. Plus, there are so many different types of plastics that need to be sorted. “Plastic recycling just suffers from poor economics,” says Geyer.

June 2017 was fourth-warmest on record  - NASA –- June 2017 was the fourth warmest June in 137 years of modern record-keeping, according to a monthly analysis of global temperatures by scientists at NASA's Goddard Institute for Space Studies (GISS) in New York. Last month was 0.69 degrees Celsius warmer than the mean June temperature from 1951-1980. It is surpassed by June 2016 (+0.79 °C) and June 2015 and 1998 (+0.78 °C) and only insignificantly warmer than June 2005 (+0.68 °C). Except for June 1998, the 10 warmest months of June occurred between 2005 and 2017.The monthly analysis by the GISS team is assembled from publicly available data acquired by about 6,300 meteorological stations around the world, ship- and buoy-based instruments measuring sea surface temperature, and Antarctic research stations. The modern global temperature record begins around 1880 because previous observations didn't cover enough of the planet. Monthly analyses are sometimes updated when additional data becomes available, and the results are subject to change.

NOAA: Earth had its Third Warmest June on Record - June 2017 was the planet's third warmest June since record keeping began in 1880, said the National Oceanic and Atmospheric Administration's (NOAA) National Centers for Environmental Information on Monday. The National Aeronautics and Space Administration (NASA) rated June 2017 as the fourth warmest June on record. The only warmer Junes came in El Niño years: 1998, 2015 and 2016. Minor differences can occur between the NASA and NOAA rankings because of their different techniques for analyzing data-sparse regions such as the Arctic . Global ocean temperatures last month were the third warmest on record for any June, according to NOAA, and global land temperatures were the fourth warmest on record. Global satellite-measured temperatures for the lowest 8 km of the atmosphere were the 12th warmest or 7th warmest for any June in the 39-year record, according to the University of Alabama Huntsville and Remote Sensing Systems , respectively.  Each of the first six months of 2017 have ranked among the top three warmest months on record, giving 2017 the second highest January—June period in the 138-year record: 0.91°C (1.64°F) above the 20th century average of 13.5°C (56.3°F). This is behind the record year of 2016 by 0.16°C (0.29°F), but beats third-place 2015 by 0.05°C (0.09°F). This near-record warmth is especially remarkable given the lack of an El Niño event this year. Global temperatures tend to be warmer during El Niño years, when the ocean releases more heat to the atmosphere.

Globe had 2nd warmest year to date and 3rd warmest June on record -- The average global temperature set in June 2017 was 1.48 degrees F above the 20th-century average of 59.9 degrees, according to scientists from NOAA’s National Centers for Environmental Information. This average temperature was the third highest for June in the 1880-2017 record, behind June 2015 (second) and a record-breaking June 2016. June 2017 marks the 41st consecutive June and the 390th consecutive month with temperatures at least nominally above the 20th-century average. The year-to-date average temperature was 1.64 degrees F above the 20th-century average of 56.3 degrees. This was the second-warmest for this period, 0.29 of a degree behind the record set in 2016.  Other notable climate events and facts around the world last month included:

  • The average Arctic sea ice extent (coverage) for June was 7.5 percent below the 1981-2010 average, the sixth smallest for the month since satellite records began in 1979. The average Antarctic sea ice extent was 6.3 percent below average, the second smallest on record for June behind 2002.
  • The globally averaged land-surface temperature (fourth warmest for the month of June) and the sea-surface temperature (third warmest) ranked second highest on record for the year to date.
  • Africa had its warmest June on record; Europe, its second (tied with 2007); South America, its third (tied with 2005); Asia, it’s eighth; North America, its 10th; and Oceania, its 50th (tied with 1927). 

July 2017 ENSO update: Holding steady --- The latest ENSO forecast by CPC/IRI is holding steady since last month and favoring ENSO-neutral conditions (50-55% chance) into the winter of 2017-18. Although not favored, El Niño development has an elevated chance of occurring (~35-45%) relative to the long-term average (~25-35%), so we still need to keep our eyes on this possibility.   The ocean temperatures in the Niño3.4 region have remained nearly steady over the past three months. The temperature in June was about 0.4°C (0.7°F) above the long-term average in one of our most historically consistent SST datasets.  Average sea surface temperature (SST) during June 2017, shown as departure from the long-term (1981-2010) average. Red shading shows where SSTs were above average and blue shading shows where they were below average.  Climate.gov figure from CPC data. In fact, this persistent warmth means that the latest three-month average (April–June) Niño3.4 temperature has reached 0.5°C above the long-term average, which is one condition necessary to declare El Niño. This is the first time we’ve hit this threshold since April–June of last year. Does that mean we can declare that El Niño has awoken from its yearlong slumber? Let’s not get too excited just yet!

Destruction of wetlands linked to algal blooms in Great Lakes - Canada's current wetland protection efforts have overlooked how the environment naturally protects fresh-water resources from agricultural fertilizer contaminants, researchers from the University of Waterloo have found. In a recent study, engineering researchers at Waterloo found that small wetlands have a more significant role to play than larger ones in preventing excess nutrients like nitrogen and phosphorus from fertilizer from reaching waterbodies such as the Great Lakes. Excess nutrients are a primary cause of algal blooms, which have a number of impacts, including impairing drinking water quality, robbing aquatic life of needed oxygen and closing beaches to swimming. "With agriculture and urbanization, Canada has lost a huge portion of its wetlands, which have had a number of environmental impacts," "While we have made some progress in protecting larger wetlands that act as habitat for wildlife, we have been less successful in protecting smaller ones that continue to be removed to make way for things such as new housing subdivisions. "What is often not appreciated is that different wetlands serve different purposes." Researchers examined data from hundreds of studies that quantified the impact of wetlands from across the world on filtering environmental contaminants. In reviewing the data, they found that small wetlands act as a better nutrient sink than larger ones because a greater percentage of their water touches soil either on the bottom or on the shoreline, which is key in removing excess nutrients and preventing them from making their way to downstream water bodies.

EPA chief Pruitt backs federal funding for Great Lakes cleanup - StarTribune.com: Scott Pruitt, the nation’s top environmental officer, said Wednesday he endorses continued federal funding for a landmark cleanup of the Great Lakes — a departure from the Trump administration’s budget proposal, which would essentially kill the project. “I understand the investment that’s been made historically,” said Pruitt, administrator of the U.S. Environmental Protection Agency (EPA), during an interview with the Star Tribune. “It’s a continuing need, and we have to see that it’s adequately funded.” Pruitt’s support follows a vote in the U.S. House Appropriations Committee, which passed legislation this week that would preserve the $300 million annual funding for the Great Lakes Restoration Initiative, while cutting the EPA’s overall budget by 6.5 percent. Pruitt, the former Oklahoma attorney general appointed by President Donald Trump to head the EPA, visited Minnesota as part of a multistate listening tour on many of the controversial issues he inherited at the agency — and some he’s initiated since taking office in February. Pruitt’s appointment prompted harsh criticism from environmental organizations because while in Oklahoma he routinely battled the EPA, over climate change regulations in particular. Many have accused him of packing his staff with representatives from the industries the agency is charged with regulating and say he’s gutting environmental protections on air quality and climate change.But he’s been lauded by conservatives and many business executives, who see the EPA as the embodiment of federal overregulation. 

How Dams Deprive the World’s Rivers of Sediment - Vast amounts of river-borne sediment are trapped behind the world’s large dams, depriving areas downstream of material that is badly needed to build up the marshes and wetlands that act as a buffer against rising seas. In September 2011, after 20 years of planning, workers began dismantling the Elwha and Glines dams on the Elwha River in northwestern Washington state. At the time, it was the largest dam removal project in US history, and it took nearly three years for both barriers to be dismantled and for the river to once again flow freely.Over the course of their nearly century-long lives, the two dams collected more than 24 million cubic yards of sediment behind them, enough to fill the Seattle Seahawks football stadium eight times. And since their removal, the Elwha has taken back the trapped sediment and distributed it downstream, causing the riverine ecosystem to be rebuilt and transformed. Massive quantities of silt, sand, and gravel have been carried to the coast, resurrecting a wetlands ecosystem long deprived of sediment.“We’ve seen a big expansion of coast landforms,” says Jonathan Warrick, a research geologist with the US Geological Survey who studies the after-effects of the dam removal. “The beach is 500 feet offshore from where it used to be and there is this brand new wetland complex that has developed behind the beach.” Scientists are now beginning to fully appreciate the life-giving effects of sediment, which some researchers, as well as people who live along waterways, once viewed as a malevolent force that choked the life out of rivers, streams, and wetlands. Now, as global warming steadily melts glaciers and polar ice sheets, quickening the pace of sea level rise, scientists say that a severe shortage of river-borne sediment – most of it trapped behind dams – will increasingly be felt along the world’s coasts.

National study puts timeline on impact of sea-level rise in Maryland and Virginia - On Maryland’s Eastern Shore, rising seawater levels and chronic flooding threaten to disrupt daily life, damage homes and businesses, and swallow land in the relatively near future, according to a new study. For some parts of the Eastern Shore, there soon may be no more there there. That’s the takeaway from a report released Wednesday by the Union of Concerned Scientists. The study, “When Rising Seas Hit Home: Hard Choices Ahead for Hundreds of U.S. Coastal Communities,” looks at the impact rising sea levels caused by global warming will have on coastal regions across the country. Maryland, with 3,100 miles of tidal shore along the Atlantic Ocean and Chesapeake Bay, will be particularly hard hit, according to the study. Only Louisiana has more locations that will be affected as severely. The study identifies 167 communities in 13 states that by 2035 will face chronic inundation — which it defines as when high tides flood 10 percent or more of the community’s usable, non-wetland area at least 26 times per year. Twenty-two of those communities are in Maryland, most on the Eastern Shore, which is coping with sinking land and rising sea levels. The study also points to three Virginia communities facing chronic inundation by 2035.  In some places, the predictions are ominous. The town of Crisfield, Md., on the lower Eastern Shore, will face chronic flooding of more than half its land area within roughly 20 years, the study said.

Satellite snafu masked true sea-level rise for decades - Nature --The numbers didn’t add up. Even as Earth grew warmer and glaciers and ice sheets thawed, decades of satellite data seemed to show that the rate of sea-level rise was holding steady — or even declining.Now, after puzzling over this discrepancy for years, scientists have identified its source: a problem with the calibration of a sensor on the first of several satellites launched to measure the height of the sea surface using radar. Adjusting the data to remove that error suggests that sea levels are indeed rising at faster rates each year.“The rate of sea-level rise is increasing, and that increase is basically what we expected,” says Steven Nerem, a remote-sensing expert at the University of Colorado Boulder who is leading the reanalysis. He presented the as-yet-unpublished analysis on 13 July in New York City at a conference sponsored by the World Climate Research Programme and the International Oceanographic Commission, among others. Nerem's team calculated that the rate of sea-level rise increased from around 1.8 millimetres per year in 1993 to roughly 3.9 millimetres per year today as a result of global warming. In addition to the satellite calibration error, his analysis also takes into account other factors that have influenced sea-level rise in the last several decades, such as the eruption of Mount Pinatubo in the Philippines in 1991 and the recent El Niño weather pattern.

'When corals die off, we die off' -- In 1998, the cruel heat of El Nino hit Seychelles hard. Sea surface temperatures rose around the Indian Ocean, bleaching 90% of coral reefs in the archipelago. Widespread flooding caused significant economic losses -- fishing and agriculture accounting for more than half of the total figure according to the International Monetary Fund (IMF).The meteorological event, a combination of ocean heat redistribution and wind reversal in the Pacific, occurs approximately every two to seven years and has far-reaching consequences. The last El Nino in 2016 was similarly dreadful, reducing coral coverage on Seychelles' reefs from 50% to 5%, say local researchers.El Nino is a phenomenon: a devastating, uncontrollable exception to the norm. With carefully managed conservation, Seychelles can survive its wild fluctuations. But not if global warming continues. As baseline temperatures creep up, the ecosystem loses its ability to recover. Eventually El Nino could prove terminal. Climate change has become the day-to-day struggle for this tiny nation -- an island nation that faces erasure should the problem remain uncurbed.  Headlines refer to the "slow creep" of climate change. In pockets of the world not yet on its frontlines, there is still doubt or ambivalence -- even from the highest offices in the land. Seychellois, however, can measure the effects with a yardstick along their coastline."People that don't believe in climate change, maybe they need to come to the Seychelles," says Lisa Laporte Booyse, who runs a guesthouse on the southeast tip of Mahe, the largest island in the chain. "We can show them photos of things that were very different before ... coastal erosion. We can see flooding that we never experienced, the higher temperatures that we've never experienced before. The season(al) changes that have had an effect."

The stubbornly persistent idea about climate change that just won’t go away -- As if melting glaciers, thawing permafrost and starving polar bears weren’t enough, scientists are finding that the effects of climate change in the Arctic are even more complex — and far-reaching — than we thought. New research suggests that warm spells at the top of the world can, surprisingly, cause unusually cold weather in parts of North America — and that could be hurting plants, damaging agriculture and even affecting the amount of carbon dioxide that goes into our atmosphere. Plus, it further reinforces a controversial but persistent theory suggesting that the fast-warming of the Arctic could be causing weather extremes in the heavily populated mid-latitudes as well.The new study in the journal Nature Geoscience by a team of researchers from South Korea, China and the United States, finds that warmer-than-usual springtime temperatures in the Arctic Ocean are followed by colder-than-usual temperatures across much of North America, as well as a reduction in precipitation in some parts of the southern United States. And these conditions are also associated with a reduction in plant growth and development, in some cases even leading to reduced crop yields.“This study adds to the growing pile of evidence that the indirect effects of Arctic meltdown will affect us all in surprising ways,” said Arctic climate expert Jennifer Francis of Rutgers University, who was not involved with the new research, in an email to The Washington Post. The new study builds on a previous paper, published by some of the same authors two years ago, which explored the link between unusually warm conditions in the Arctic Ocean and unusually cold winters in both East Asia and North America. This study, along with other similar research conducted in the past few years, suggests that warming ocean temperatures and declines in Arctic sea ice can cause atmospheric changes that significantly affect weather patterns in other parts of the world.

After 2000-era plateau, global methane levels hitting new highs  - NOAA - When it comes to global warming, carbon dioxide is the 800-pound gorilla: it’s the most abundant of the long-lived greenhouse gases that human activities generate. But ounce for ounce, methane (CH4) traps more heat, and it accounts for about 20% of the greenhouse gases produced by human activities. Strangely, though, global methane levels “flat lined” from 1999 to 2006. (NOAA Climate.gov graph, based on data from NOAA ESRL. )The plateau didn’t last, however, and in recent years, global methane levels have been hitting new highs. Figuring out what’s going on with methane is a high priority for carbon cycle experts at NOAA and other institutions around the world.  Possibly the most important clue: air samples collected at different latitudes around the world show that the amount of methane carrying carbon-13—a rare, heavy isotope of carbon—has dropped significantly since 2007.That drop casts doubt on one of the first explanations experts considered for the post-2007 rise: an increase in methane emitted from fossil fuels, including "fugitive" methane gas escaping during oil and natural gas drilling. Instead, the chemical fingerprints point toward agricultural and wetland emissions from the tropics.  Scientists have long recognized the possibility—small, but not zero—that global warming could ignite a “methane bomb” in the Arctic: the rapid release of huge amounts of methane from thawing permafrost and underwater methane hydrates. Such a release could trigger extinction-level warming.

Thawing permafrost poses even greater global warming threat than previously thought, suggests study | The Independent: As the world warms, methane trapped underneath the frozen tundra could be released, increasing the rate of warming in a vicious circle. Runaway global warming is, without a doubt, a nightmare scenario for humanity.As the temperature rises, it has knock-on effects that drive the mercury higher still in a vicious circle that the likes of Professor Stephen Hawking have warned could turn the Earth into a planet like Venus, where it’s a balmy 250 degrees Celsius and the rain is made of sulphuric acid.One of the most feared of these feedback loops is the vast amount of organic material currently trapped in permafrost, which would release methane and other greenhouse gases in large amounts given the right conditions. And now a team of researchers has discovered another significant source of emissions that would result from the thawing of the tundra. For the frozen ground acts as a cap on much more ancient gas deposits, preventing them from escaping into the atmosphere.These seeps were known about, but just how important they would be was poorly understood. The new study, of 10,000 square kilometres of the Mackenzie Delta in Canada, found that the seeps there were responsible for 17 per cent of the total emissions from the land even though they were only found in about one per cent of the area, according to a paper in the journal Scientific Reports.

Thawing Permafrost Poses Even Greater Climate Threat Than Previously Thought, Study Finds - Thawing tundra may be allowing long-buried pockets of methane to be released into the atmosphere, new research suggests. A study surveying the Mackenzie Delta in Canada, published Wednesday in the journal Scientific Reports, suggested that these methane "seeps" on the tundra may be more problematic than previously thought.  The study finds that 17 percent of methane emissions in the area came from these seeps, despite emissions hotspots only covering one percent of the tundra's surface area. The authors wrote that warming will "increase emissions of geologic methane that is currently still trapped under thick, continuous permafrost , as new emission pathways open due to thawing permafrost."  "We were a bit surprised … we saw these very strong emissions. It means a very tiny fraction of the area produces quite a big share of the estimated annual emissions," professor Torsten Sachs, one of the researchers, told The Independent . As reported by Inside Climate News :   "This is another methane source that has not been included so much in the models," said the study's lead author, Katrin Kohnert, a climate scientist at the GFZ German Research Centre for Geosciences in Potsdam, Germany. "If, in other regions, the permafrost becomes discontinuous, more areas will contribute geologic methane."

Methane Seeps Out as Arctic Permafrost Starts to Resemble Swiss Cheese - Global warming may be unleashing new sources of heat-trapping methane from layers of oil and gas that have been buried deep beneath Arctic permafrost for millennia. As the Earth's frozen crust thaws, some of that gas appears to be finding new paths to the surface through permafrost that's starting to resemble Swiss cheese in some areas, scientists said.In a study released today, the scientists used aerial sampling of the atmosphere to locate methane sources from permafrost along a 10,000 square-kilometer swath of the Mackenzie River Delta in northwestern Canada, an area known to have oil and gas desposits.Deeply thawed pockets of permafrost, the research suggests, are releasing 17 percent of all the methane measured in the region, even though the emissions hotspots only make up 1 percent of the surface area, the scientists found.In those areas, the peak concentrations of methane emissions were found to be 13 times higher than levels usually caused by bacterial decomposition—a well-known source of methane emissions from permafrost—which suggests the methane is likely also coming from geological sources, seeping up along faults and cracks in the permafrost, and from beneath lakes.The findings suggest that global warming will "increase emissions of geologic methane that is currently still trapped under thick, continuous permafrost, as new emission pathways open due to thawing permafrost," the authors wrote in the journal Scientific Reports. Along with triggering bacterial decomposition in permafrost soils, global warming can also trigger stronger emissions of methane from fossil gas, contributing to the carbon-climate feedback loop, they concluded.  "This is another methane source that has not been included so much in the models," said the study's lead author, Katrin Kohnert, a climate scientist at the GFZ German Research Centre for Geosciences in Potsdam, Germany. "If, in other regions, the permafrost becomes discontinuous, more areas will contribute geologic methane," she said.

All hell breaks loose as the tundra thaws -- Strange things have been happening in the frozen tundra of northern Siberia. Last August a boy died of anthrax in the remote Yamal Peninsula, and 20 other infected people were treated and survived. Long dormant spores of the highly infectious anthrax bacteria frozen in the carcass of an infected reindeer rejuvenated themselves and infected herds of reindeer and eventually local people.  More recently, a huge explosion was heard in June in the Yamal Peninsula. Reindeer herders camped nearby saw flames shooting up with pillars of smoke and found a large crater left in the ground. Melting permafrost was again suspected, thawing out dead vegetation and erupting in a blowout of highly flammable methane gas.  Over the past three years, 14 other giant craters have been found in the region, some of them truly massive – the first one discovered was around 50m (160ft) wide and about 70m (230ft) deep, with steep sides and debris spread all around.There have also been cases of the ground trembling in Siberia as bubbles of methane trapped below the surface set the ground wobbling like an airbed. Even more dramatic, setting fire to methane released from frozen lakes in both Siberia and Alaska causes some impressive flames to erupt.  Methane is of huge concern. It is more than 20 times more potent a greenhouse gas than carbon dioxide, and a massive release of methane in the Arctic could pose a significant threat to the global climate, driving worldwide temperatures even higher.

Antarctica's new 1.1-trillion-ton iceberg is already breaking into enormous pieces --Earlier this week, a crack in Antarctica's Larsen C ice shelf caused a 1.1-trillion-ton block of ice to calve, forming a colossal iceberg roughly the area of Delaware. Just days after breaking off the continent, the iceberg, now dubbed A68, has broken into two pieces. "A68 is starting to lose some chunks already! Still an enormous berg though," Martin O'Leary a glaciologist at Swansea University, wrote in a tweet early Friday morning for the Antarctic research program Project MIDAS. After years of lengthening and widening, the rift in the Larsen C ice shelf grew rapidly in the past year, and birthed the iceberg sometime between July 10 and July 12. When it calved, the iceberg was the third largest ever recorded.  The US National Ice Center tracks and unceremoniously assigns icebergs their names based on location and order of discovery. When sizable icebergs break off a main iceberg, they take the same name with added letters.  "Just as A68 gets its official name, Suomi ... shows that it has broken into two pieces — A68a and A68b I guess?" Adrian Luckman, also a glaciologist at Swansea University and member of Project MIDAS, said in a tweet. Luckman also posted the recent Suomi satellite image of the new fragment shown on the right. When it calved, iceberg A68 had more than double the volume of Lake Erie in the Great Lakes.  Where A68 goes from here — and when it melts — is anyone's guess at this point. However, the process could take years, as it has for similarly large icebergs.

If climate change were a scam, scientists would be hyping up the Antarctic iceberg -- On Wednesday morning, researchers reported that the massive Larsen C ice shelf had finally ruptured, releasing an iceberg the size of Delaware into the Antarctic Ocean. Rather than ringing the alarm on man-made climate change, glaciologist Martin O’Leary called the massive calving “natural,” and stated his team was “not aware of any link to human induced climate change.” Before climate change skeptics reach for some Larsen C ice cubes to chill their Champagne, let’s reflect: A dramatic ice event went down and scientists did not seize the opportunity to evangelize for man-made climate change. Could that mean that maybe they are concerned with just the facts?    But if we are going to listen to scientists when they tell us we are not to blame for certain climate events, we also need to listen to them when they say we are.  Believe it or not, scientists aren’t out to hoodwink you when it comes to climate change. Despise politicians and loathe the media, if you must. If there is one source of information you still trust — let it be the scientists.

Are We as Doomed as That New York Magazine Article Says? --No one knows how to talk about climate change right now. I don’t have an idea about where to begin, and I write about it professionally. On the one hand, the natural consequences of climate change seem increasingly severe and devastating. Just in the past two years, I’ve written about how global warming will probably cause more mega-droughts in Arizona and New Mexico; how dangerously sweltering summer days are three times likelier to occur today than they were in 1900; and how even slightly warmer oceans will destroy the Great Barrier Reef.On the other hand, a strategy for addressing climate change is coming together. The cost of solar and wind energy are plunging worldwide; carmakers are promising to take more of their fleet electric, and the amount of carbon released into the atmosphere from human activity has stabilized over the past three years. Decarbonizing will be an arduous and difficult global project—but technological development and government policy are finally bringing it into the realm of the possible. But on the other, other hand, the Trump administration is methodically and successfully undermining the substance of American climate policy. It has spread untruths about climate science, abandoned the Paris Agreement, and stricken dozens of climate-focused EPA rules from the law books. Michael Oppenheimer, a Princeton professor who has observed climate diplomacy for 30 years, told me that this is one of the most dispiriting moments he can remember—and that he believes Earth is now doomed to warm by more than two degrees Celsius. That’s the state of the world right now. There are three ongoing shifts and no easy way to synthesize them. The facts don’t lend themselves to an overwhelming vision. Instead, they suggest that the planet’s economic system is in the middle of a difficult and supremely important political battle with itself. As Brad Plumer, a New York Times climate reporter, tweeted last week: There are “two radically opposed visions of the future; [it’s] not yet clear which one will win out.” It’s into that morass that this week’s New York magazine walks. In a widely shared article, David Wallace-Wells sketches the bleakest possible scenario for global warming. He warns of a planet so awash in greenhouse gas that Brooklyn’s heat waves will rival Bahrain’s. The breadbaskets of China and the United States will enter a debilitating and everlasting drought, he says. And millions of brains will so lack oxygen that they’ll slip into a carbon-induced confusion.

Telling the Climate Truth -- The recent, major New York Magazine article on the coming “uninhabitable earth” stirred quite a response, both positive and negative. The positive response was, in general, “Finally, someone telling the truth.” The negative response was, in general, “But it contains these errors,” and “Does it really help to scare people this much?” The errors are secondary to the article’s main point, but the question about climate communication strategy is both long-standing in the climate activism community and important. If we tell this much truth, are we scaring people into inaction? Or does telling this much truth motivate people more effectively than the message that “we’ve got until 2050 to get fully in gear” currently does? (Is it even moral not to tell this much truth?) My own thoughts below (click to go directly to them). First, here’s one person’s unique perspective on this question. The following is from Margaret Klein Salamon, a clinical psychologist and also the founder of the climate action group The Climate Mobilization (TCM), which advocates for starting a “World War II-scale” emergency mobilization to convert from fossil fuels, and starting it now. The following is Ms. Klein Salamon’s recent letter to her mailing list, also published here. Please read it through as she considers this critical issue — Does telling the climate truth hurt or help? I’ve highlighted a few key ideas and reformatted the piece just slightly. As you read, please keep the terms affect tolerance and affect phobia in mind. She’ll clarify the definitions. I’ll offer closing comments at the end.

Worried about the planet? Avoid that extra kid -- Enough with the cloth bags, LED light bulbs, and recycling bins! It’s time for some straight-talk on which actions really make a difference when it comes to mitigating climate change. Canadian researchers have delved into this question, compiling a list of the most commonly suggested “green” behavior changes, as found in high school science textbooks and government documents. After measuring the CO2-equivalent emission reductions that each of these changes would bring, the researchers made an interesting discovery – that the most effective actions are not the ones being promoted publicly. In fact, the most effective actions are hardly mentioned at all. If you want to reduce your carbon footprint, there are four key “high-impact” actions to take, according to the Canadian study just published in Environmental News Letters:
#1 – Do not have an additional child (58.6 tonnes CO2-equiv. emission reductions per year)
#2 – Live car-free (2.4 tonnes CO2)
#3 – Avoid one round-trip transatlantic flight (1.6 tonnes)
#4 – Eat a plant-based diet (0.8 tonnes)
These differ significantly from the popular advice for “greening” one’s lifestyle, which fall squarely into the “low-impact” category:
- Replace typical car with hybrid (0.52 tonnes)
- Wash clothes in cold water (0.25 tonnes)
- Recycle (0.21 tonnes)
- Upgrade light bulbs (0.10 tonnes)
The researchers found that public discourse on reducing one’s carbon footprint overwhelmingly focuses on low-impact behaviors. Worse yet, mention of the high-impact behaviors is virtually non-existent. Out of 216 mentions of green behaviors in textbooks, only eight (4 percent) spoke to high-impact behaviors. From the study:

Climate Change Is Here. It’s Time to Talk About Geoengineering - pretend that the US didn't recently pull out of the Paris Climate Agreement. Let's also pretend that all the other countries that scolded it for withdrawing also met their Paris pledges on deadline. Heck, let's pretend that that everyone in the whole world did their very best to cut emissions, starting today. Even if all that make-believing came true, the world would still get very hot. Fact is, if you add up all the emissions cuts every country promised in their Paris pledges, it still wouldn't keep the planet's temperature from rising beyond the agreement's goals—to keep global temperatures from rising more than 2˚ C higher than they were before the Industrial Revolution, and as close to 1.5˚ C as possible. If Earthlings want to avoid a heat-soaked, tide-swamped, and war-clouded future, they need to do more. This raises the specter of geoengineering: things like seeding the stratosphere with sulfur, or using ice crystals to dissolve heat-trapping clouds. But geoengineering is a dirty word many climate scientists and climate policy experts avoid, because humans meddling with nature doesn't have the best track record. Which is why they say world leaders need to come up with some rules about geoengineering ASAP, before desperation over the coming climate catastrophe forces humanity to do something it might well regret. Geoengineering strategies generally fall into two categories: removing carbon dioxide and reducing heat. The former problem has vexed researchers for years. Sure, they can do it on small scales—carbon scrubbers are essential life support aboard closed systems like the International Space Station and submarines. But installing systems large enough make a dent in all those parts per million is functionally impossible. It would be expensive, energy-intensive, and also nobody really knows how to do it. Doing the same with reforestation would require covering nearly half of all world’s landmass with trees. Not likely to happen. And despite the hype, carbon capture and storage—sucking the stuff up before it leaves the smokestack and pumping it underground—is still in its infancy.

White Liberal Guilt, Black Opportunism and the Green Party - Black Agenda Report - The Green Party held its annual national meeting in Newark last weekend. Amid the workshops, smaller meetings and committeefying, Greens use this meeting to elect people to their 9 member steering committee, the body that conducts the week to week management of the organization. Steering committee members are chosen by and from the 150 member national committee, which is named by state parties and national caucuses, and votes are counted according to a ranked choice scheme. I’ve been on the national committee for several years now. I wasn’t at this year’s meeting due to some health issues, but I know plenty of people who were.  A meeting of the black caucus was in progress when the results of the steering committee election were announced. A Latina delegate observed to the black caucus members present that it was a shame no black candidates for steering committee had won the election. She offered, in solidarity with the black caucus to resign her newly elected seat so that one of the black candidates could replace her, either through an applicable rule if one could be found, or in a new election.There was already a lot of discontent in the room. Caucus members were already considering how to respond to what they perceived as an unacceptable level of racist insults and slights over the course of the weekend, and they were keenly aware that some members of the national committee had been unable to login and properly cast their votes, though the number of these was not clear. So the caucus members present decided to leave their meeting and walk in on a fundraiser a short distance away which was being livestreamed on Facebook. On arrival they seized the mic and launched into a series of outraged speeches about how the Green party could not be allowed to continue slighting and insulting and ignoring its black constituencies. They demanded that the entire steering committee, not just those newly elected, resign and be replaced. Another Latina elected to the steering committee also volunteered to resign, and a chorus erupted on social media of Greens mostly congratulating each other for addressing racism inside the organization and acceding to the wishes of the black caucus. Some did balk at having the entire steering committee resign, because then there would be nobody with the power to call new elections, and a few – me among them – found a lot to disagree with in the entire spectacle.

Ozone bill gets House vote today - House lawmakers today take up legislation H.R. 806 (115) delaying implementation of requirements from EPA’s 2015 tightened ozone standard until 2026 and extending the agency's review cycle for certain pollutants from five years to 10. The Ozone Standards Implementation Act from Rep. Pete Olson is nearly identical to legislation that cleared the House last June on a heavily party-line vote of 234-177. Expect a similar result this time around and a familiar uphill slog toward the 60 votes needed for passage in the Senate. The CBO estimates the measure would cost $2 million to implement between 2018 and 2020.   A collection of public health and medical groups, including the American Lung Association, Children’s Environmental Health Network and National Medical Association, urged lawmakers in a letter Monday to reject a bill they say “permanently weakens the Clean Air Act” and endangers health. “This bill is an extreme attempt to undermine our nation’s proven clean air health protections,” they wrote. But a collection of industry groups, including the American Chemistry Council, American Fuel & Petrochemical Manufacturers and National Mining Association, backed what they called “a common-sense plan that maintains continued air quality improvement without unnecessarily straining state and local economic resources” in their own letter out this morning.

House votes to roll back Obama-era ozone standards | TheHill: Lawmakers voted Tuesday to delay an Obama administration rule on ozone pollution and limit future regulations that crackdown on the pollutant. The House voted 229-119 to pass a bill from Rep. Pete Olson (R-Texas) slowing down the regulatory timeline for surface-level ozone pollution. The bill would delay implementation of the Obama administration’s 2015 rule lowering the acceptable level of ozone and would require the Environmental Protection Agency (EPA) to reconsider the ozone rule every 10 years, rather than on the current timetable of every five years. Republicans, businesses and manufacturing groups backed the bill, saying it would help localities come into compliance with ozone regulations without facing consequences from the federal government or having a string of quickly-issued pollution rules. “We’ve learned that timelines and procedures established almost 30 years ago can be counterproductive today, resulting in unnecessary costs, regulatory delay and economic uncertainty,” Rep. John Shimkus (R-Ill.) said. “There is more work to be done to modernize environmental laws, but ensuring orderly implementation of air quality standards is an important place to start and essential for our environment and our economy.”

A vote on California’s landmark climate legislation is coming down to the wire - Vox - California has the most reliably progressive climate policy of any state in America. And a lot has happened under Gov. Jerry Brown’s leadership. In September, he signed SB 32, a bill committing the state to far more drastic emission cuts to prevent severe global warming than any other state in the country. After President Donald Trump announced in early June that he was pulling the US out of the Paris climate accord, Brown became the unofficial climate ambassador, meeting with Chinese leaders to talk emissions reductions and alternative energy. But this Monday, the California Senate will vote on AB 398, a bill to extend the state’s centerpiece cap-and-trade program, currently set to expire in 2020. The program’s future is in question, and the fight surrounding it has put Brown’s climate legacy on the line. For months, Brown, legislators, and a wide range of stakeholders have been tussling over the program, which originally passed with a simple majority in 2006. In 2012, the Chamber of Commerce tried to allege its carbon pricing mechanism was an illegal tax. (New taxes in California require a two-thirds majority vote.) The Supreme Court recently knocked down that challenge.Earlier this week, Brown and both House leaders proposed a compromise package of AB 398 and AB 617, a separate bill meant to address the local air quality concerns of environmental justice advocates who had qualms with AB 398. Brown wants a supermajority (two-thirds) of the Senate to pass the modified extension to protect it from future legal threats. Democrats hold exactly that many seats. But the party’s caucus is fractured, making that supermajority potentially out of reach.

California Legislature extends state’s cap-and-trade program in rare bipartisan effort to address climate change - LA Times: alifornia lawmakers voted Monday evening to extend the state’s premiere program on climate change, a victory for Gov. Jerry Brown that included unprecedented Republican support for fighting global warming. In a break with party leaders and activists in California and Washington, eight Republicans joined with Democrats to continue the cap-and-trade program, which requires companies to buy permits to release greenhouse gases into the atmosphere.The legislation would keep the 5-year-old program operating until 2030, providing a key tool for meeting the state’s ambitious goal for slashing emissions. Cap and trade also generates important revenue for building the bullet train from Los Angeles to San Francisco, another priority for the governor. California’s program is the only one of its kind in the U.S. and has been considered an international model for using financial pressure to prod industry to reduce emissions. Bipartisan support for the system comes as Republicans in Washington, including President Trump, have blocked, resisted or undermined national efforts to fight global warming. “California Republicans are different than national Republicans,” said Assembly Republican leader Chad Mayes (R-Yucca Valley), who pushed members of his caucus to work with Democrats on the issue. “Many of us believe that climate change is real, and that it’s a responsibility we have to work to address it.” The legislation to extend cap and trade, Assembly Bill 398, passed 55 to 21 in the Assembly and 28 to 12 in the Senate. 

California communities are suing 37 fossil fuel companies over climate damages - Two California counties and one California city have filed a lawsuit against 37 of the world’s biggest fossil fuel producers, seeking payment for damages brought by climate change.The three localities are all located along California’s coast, and could see as much as 3 feet of sea level rise by the end of the century, according to a 2012 report commissioned by governors from California, Oregon, and Washington. In San Mateo county alone — the most at-risk county in California for sea level rise, according to a Climate Central report, and one of the counties involved in the lawsuit — sea level rise threatens more than $21 billion dollars worth of property. Alongside San Mateo, Marin County and the city of Imperial Beach filed separate complaints with the California Superior Court, arguing that 37 coal, oil, and gas companies knew about the harm their products posed to the planet and continued to undermine and obfuscate the dangers of climate change.The localities suing the fossil fuel companies hope to hold them accountable for their carbon emissions, and the subsequent damage that those emissions have caused — and will cause — to the communities.“The environmental harm these companies knowingly caused to our precious shorelines, and the entire world, and their deliberate efforts to conceal those frightening truths, jeopardizes the public’s health and places the financial burden of those consequences on the taxpayers,” San Mateo County Board of Supervisors President Don Horsley said in a statement. The complaint alleges that the 37 companies named as defendants — through extraction, promotion, and marketing of fossil fuels — have accounted for approximately 20 percent of all industrial carbon dioxide and methane pollution released between 1965 and 2015. Specific companies named include Chevron, ExxonMobil, BP, Shell, ConocoPhillips, and Peabody Energy, among others.

This could be the next big strategy for suing over climate change - WaPo - Two California coastal counties and one beach-side city touched off a possible new legal front in the climate change battle this week, suing dozens of major oil, coal, and other fossil fuel companies for the damages they say they will incur due to rising seas. The three cases, which target firms such as Chevron, ExxonMobil, BP and Royal Dutch Shell, assert that the fossil fuel producers are collectively responsible for about 20 percent of global carbon dioxide emissions between 1965 and 2015. They claim that industry “knew or should have known” decades ago about the threat of climate change, and want companies to pay the costs of communities forced to adapt to rising seas. “We’re already living the impact of sea level rise,” said Marin County Supervisor Kate Sears. She said a county vulnerability study found hundreds of county businesses and other assets could be at risk in coming years. “This lawsuit is a natural next step in how we address the expense we’ve already had in planning for and trying to remediate the impacts of sea level rise, but also in addressing the impacts we expect in the future.”The suits represent a variation on several largely unsuccessful attempts to hold individual companies responsible for their contribution to climate change. The California cases are also proceeding under a legal doctrine called “public nuisance” (among other claims), which charges that under California common law, the companies have injured the counties and city by contributing to rising seas, and more frequent and severe flooding as a result. But the difference is that this time, they are making state level nuisance claims rather than federal ones, which have already failed as courts pointed out that those worried about climate change had other recourses, such as EPA action. 

Trump may reverse decision on climate accord, France’s Macron says: (Reuters) - French President Emmanuel Macron said he was hopeful that U.S. President Donald Trump would reverse his decision to pull the United States out of the Paris climate accord, according to weekly newspaper Le Journal du Dimanche (JDD) on Sunday. "(Trump) told me that he would try to find a solution in the coming months," Macron told the paper, referring to meetings the two leaders had this week in Paris. "We spoke in detail about the things that could make him come back to the Paris accord," he added. Trump has said the Paris accord is soft on leading polluters like China and India, putting U.S. industry at risk. Trump on Friday appeared to hold the door open to a change of position on the 2015 Paris climate change agreement which he pulled the United States out of earlier this year. The accord, reached by nearly 200 countries in 2015, was meant to limit global warming to 2 degrees or less by 2100, mainly through pledges to cut carbon dioxide and other emissions from the burning of fossil fuels. Trump has repeatedly said he would be open to a better deal for the United States.

Trump regrets 'bizarre mistake' of Paris climate pullout, Richard Branson claims -  Donald Trump regrets the “bizarre mistake” of withdrawing the US from the Paris climate agreement, Sir Richard Branson has said. The British billionaire also urged the president to help phase out the ailing US coal industry. Speaking in Brooklyn on Friday, the Virgin Group founder said businesses and cities were firmly behind a transition to low-carbon energy, which made Trump’s decision to exit the Paris deal “very, very strange”.“With climate change, it’s America first and our beautiful globe last, and that seems incredibly sad,” said Branson. “I’ve got a feeling that the president is regretting what he did. Maybe his children and son in law [adviser Jared Kushner] are saying, ‘Look, I told you so.’ Hopefully there is a positive change of mind.”On Sunday, French president Emmanuel Macron said he was hopeful that Trump would reverse his decision, according to the newspaper Dimanche.  “(Trump) told me that he would try to find a solution in the coming months,” Macron told the paper, referring to meetings the two leaders had this week in Paris. “We spoke in detail about the things that could make him come back to the Paris accord.” The US is set to become one of only three sovereign nations in the world not to be part of the Paris accord, which aims to stem dangerous global warming. Of the other two, Nicaragua feels the agreement does not go far enough, and Syria is mired in a disastrous civil war. Branson said his companies would join the “We are still in” campaign – a coalition of hundreds of businesses, cities and universities committed to keeping to the US’s emissions reduction goals. Companies from Apple and Facebook to oil giants Exxon and BP urged Trump to stick with the Paris agreement, only for the president to fulfill his election pledge to jettison the pact.

Trump plan would 'reduce or eliminate' important data access, federal science official warns - A U.S. Geological Survey program coordinator has sent an alert to colleagues around the world, warning that the Trump administration's proposed 2018 budget cuts, if approved, will undermine important data-gathering programs and cooperative studies in areas including forests, volcanoes, flooding, wildfires, extreme precipitation and climate change.The email went to 500 researchers on June 19 to give them time to comment on the proposed changes and prepare. In it, Debra Willard, coordinator for the USGS Climate Research and Development Program, wrote that the cuts "would reduce or eliminate the availability of current data and collaborations between the USGS, other agencies and universities."The reductions threaten as many as 40 programs involved in monitoring the speed and severity of climate change impacts and the effects of other land use changes, Willard said.So far, the agency has received responses from dozens of scientists in Europe, Asia, and North America."There was a consensus that suspension of the USGS projects would impede ongoing activities in the international research and policy communities," Willard said of the responses. Science advocacy groups say the proposed budget threatens U.S. leadership in important scientific fields and could leave American researchers isolated from the rest of the world.

Trump Wants to Steer UN Climate Cash Toward Building Coal Plants -- The U.S. will seek to use a United Nations fund designed to aid nations hard hit by climate change to promote the construction of coal-fired power plants around the world. The U.S. already donated $1 billion to the so-called Green Climate Fund, and it can now use its seat on that board to advance American-energy interests globally, a White House official said. The U.S. wants to encourage developing countries to build high-efficiency plants that produce fewer greenhouse gas emissions than earlier facilities and construct “clean coal” plants that employ carbon-capture technology to strip out even more, the White House official said. The U.S. will also use its position as a board member administering the fund to lobby for spending money on natural gas infrastructure abroad, the official said.The U.S. will also use its position as a board member administering the fund to lobby for spending money on natural gas infrastructure abroad, the official said. The fund is supposed to help developing countries reduce greenhouse gas emissions and aid those on the front lines of climate change that are dealing with intense droughts, raging storms and other consequences of the phenomenon.

President Trump Tries to Take Development Banks Backwards - The Trump Administration has weakened guidance on how the U.S. will vote at the multilateral development banks—such as the World Bank and Asian Development Bank. The new guidance tries to weaken existing U.S. restrictions on funding for coal power plants and tries to influence future investment decisions by these institutions in support of the fossil fuel industry. These institutions have largely gotten out of direct funding of coal power plants as they realized that they are bad economics and bad for the environment.  The Trump Administration quietly revoked the previous guidance from 2013 which significantly restricted the use of public resources from these development banks to support coal projects. The new language—“Treasury Guidance for U.S. Positions on Multilateral Development Banks Engaging on Energy Projects and Policies”—directs the U.S. representative to: “Help countries access and use fossil fuels more cleanly and efficiently.” The most direct impact of this policy is likely to be U.S. support for building more coal plants abroad.  Pretending that what the world needs is more fossil fuels is the wrong direction in efforts to tackle climate change and should raise concerns by the bankers at these development banks as these projects don’t make economic sense. The last major coal project funded by the World Bank and the African Development Bank, the Medupi plant in South Africa, was originally budgeted at $5 billion USD.  Medupi will end up costing $15 billion in terms of total capital expenditures, plus a write-off loss of at least $700 million because of a take-or-pay coal supply agreement that the utility must pay anyway because of the massive delays. Now, a decade after the project started, the project is still not completed. The Trump Administration's attempt to take the multilateral development banks backwards on their policies is willfully ignorant of the economic realities of fossil fuel projects around the world.

Combustion engine ban puts 600,000 German jobs at risk: Ifo  : (Reuters) - More than 600,000 jobs could be at risk in Germany from a potential ban on combustion engine cars by 2030, the Ifo economic institute said in a study commissioned by Germany's VDA car industry lobby. Pollution from cars, including those with diesel engines, has become a sensitive subject in Germany since Volkswagen (VOWG_p.DE) admitted to systematic cheating of emissions tests to mask levels of health threatening nitrogen oxides. Cities such as Munich and Stuttgart are looking at banning older diesel cars, whose emissions they blame for causing an increase in respiratory diseases. The Ifo study, published on Tuesday, said a switch to sales of zero-emission cars would threaten 426,000 car manufacturing jobs, with the rest coming from related industries, such as suppliers. Two months before Germany's national elections, the government faces growing pressure to reduce emissions or face complete bans on diesel cars in some cities. Representatives of federal and regional governments will meet with carmakers on Aug. 2 to find ways to curb diesel-related pollution. The VDA, representing carmakers such as Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE), has already been talking to the government on steps to curb pollution from diesel cars that the industry hopes will avert driving bans which have already hit sales of diesel models. "Industry groups are deliberately pushing the worst-case scenario to safeguard their vested interests," NordLB analyst Frank Schwope said. For every 2-3 jobs that will be lost from phasing out combustion engines, one new position will be created in R&D, IT and other sectors related to zero-emission technology, Schwope said, dismissing Ifo's findings as incomprehensible. 

Environment at risk from clean energy switch, says World Bank -- A transition from fossil fuels to mitigate the impacts of climate change will require large amounts of metals and rare earth elements that could create environmental challenges, the World Bank has warned.   Technologies needed to meet the Paris climate agreement from wind, solar, and electricity systems are “more material-intensive” than our current fossil-fuel supply systems, a report by the bank said.  The mining or extraction of metals and rare earth elements could create environmental problems in terms of energy, water and land use, the report said.  Metals demand could double due to growth in wind turbines and solar panels and there could be a more than 1,000 per cent increase in lithium demand for batteries, the bank said.  But little attention has been paid to the environmental challenges of meeting a rapid deployment of batteries for electric vehicles and storage of intermittent renewable energy to meet the Paris accord to limit global temperature rises to 2C this century.

Electric cars will fuel huge demand for power, says National Grid - A dramatic growth in electric vehicles on Britain’s roads could see peak electricity demand jump by more than the capacity of the Hinkley Point C nuclear power station by 2030, according to National Grid. The number of plug-in cars and vans could reach 9m by 2030, up from around 90,000 today, said the company, which runs the UK’s national transmission networks for electricity and gas. The impact of charging so many cars’ batteries would be to reverse the trend in recent years of falling electricity demand, driven by energy efficiency measures such as better refrigerators and LED lighting. If electric vehicles were not charged smartly to avoid peaks and troughs in power demand, such as when people return home between 5pm and 6pm, peak demand could be as much as 8GW higher in 2030, National Grid said. Shifting the charging of cars to times when demand is lower would reduce the extra peak demand to 3.5GW, a smaller amount but still a similar capacity to the new reactors being built at Hinkley Point in Somerset.

Pro-fossil Fuel Group's Video, 'The Dirty Secrets of Electric Cars,' Debunked Again and Again - Just last week, we fact-checked and debunked every line of “The Dirty Secrets of Electric Cars,” a video produced by FuelingU.S. Forward (FUSF), a Koch-funded campaign to push fossil fuels. That video represents the group's first public pivot from fossil fuel boosterism to electric vehicle (EV) attacks. More electric vehicle experts are also picking the video apart. One effort is this video highlighting many of the same falsehoods we wrote about, and which adds key context about some of the video footage. Like, for instance, the fact that the photo that Fueling U.S. Forward claims is a lithium, cobalt, or cerium mining operation is actually a copper mine. Check it out:Another notable response is on HybridCars.com, where editor-in-chief Jeff Cobb has a lengthy and fact-filled take down of the “Dirty Secrets” video. Cobb writes:“If a disinformation and error-filled video co-sponsored by a front group for oil merchants the Koch Brothers has its way, people will want to think twice about 'dirty' electric cars.Making the rounds by a coordinated effort including sponsored Facebook posts widely disseminated, and being picked up here and there by media, the video decries their toxicity and makes them complicit with the exploitation of children in poor nations.The product of Fueling U.S. Forward, a pro-fossil fuel advocacy founded August 2016, and presently focusing its message on lower income Americans, the video titled 'Dirty Secrets of Electric Cars' has clean-car advocates on the alert.” Getting into the meat of the video, Cobb explains:“Regarding the FUSF’s second paragraph, they were able to squeeze in no less than six outright factual inaccuracies. 1) None of the metals in modern electric car batteries are classified as being a human or plant toxicity concern; (2) None are considered particularly rare in occurrence or hard to extract; (3) None are classified as “rare earths;” (4) Lithium is not a rare earth metal; (5) Cobalt is not a rare earth metal; (6) Only cobalt is mined primarily in China and DRC, and the rest of battery metals (which make up the majority of the battery) are extracted elsewhere. And many other countries produce cobalt, including Canada which produces almost the same amount as China. And hand mining only makes up a very small portion of extraction and is already being banned by Apple and others. So the notion that electric cars depend on the mining shown in the video is misleading.”

Electric cars may stall without a battery revolution  --  All around the world, countries are sounding the death knell for the internal combustion engine. Earlier this month, France announced that it wanted to end the sale of petrol and diesel cars by 2040, joining India (2030) and Norway (2025) in envisioning an all-electric future.Car-makers are racing to meet demand, with Volvo promising that from 2019, all of its new models will feature an electric motor. Modern electric motors are compact, extremely efficient and emissions-free at the point of use but each one requires a battery to store and deliver power, and that is where electric vehicles (EVs) stumble.Most EVs today use lithium ion battery packs, the same technology that powers smartphones, tablets and laptops. Lithium ion packs for electric cars have fallen in price by about 80% since 2010, according to consulting firm McKinsey, but they remain expensive. A replacement battery pack for GM’s Chevrolet Bolt is priced at more than $15,700 (£12,150) – representing over 40% of the cost of the entire vehicle. It could take a decade or more for EVs to drop to the price of petrol car, says McKinsey.  While electric motors are much more efficient than internal combustion engines, batteries can store only a small fraction of the energy in fossil fuels. Some of today’s EVs can run out of juice in as little as 100 miles.   Finally, while lithium ion batteries are not as explosive as petrol, they do have safety issues. They require cooling to keep from over-heating and contain flammable liquid electrolytes that readily ignite if the battery is damaged.

Lithium supply pipeline is filling but will it be enough? - Andy Home -- The electric vehicle revolution is gathering momentum. Barely a week goes by without a fresh, starting revelation, whether it be Sweden's Volvo promising to phase out traditional internal combustion engines from 2019 or France aiming to end the sale of gasoline and diesel vehicles by 2040. And, of course, leading the electric charge is the poster child of the green technology revolution, Tesla, which is gearing up to roll out its Model 3, the long-awaited break-out from niche to mass market. The ambition is to be producing 20,000 per month by the end of the year. Whether reality matches such lofty goals remains to be seen. Tesla delivered around 47,000 vehicles in the first half of the year, at the lower end of its own forecasts, due to a "severe shortfall" of battery packs. Tesla shareholders are used to this sort of thing but the battery pack delays are a reminder that this accelerating technology revolution rests on a long, complex and still-evolving materials supply chain. We don't know at which precise point of that chain Tesla's battery bottle-neck appeared, but questions over the reliability of battery materials supply go all the way up the chain to the brine lakes of the Atacama Desert in South America. Simply put, will there be enough lithium, and lithium in the right chemical composition, to support exponentially growing demand for batteries?

South Miami passes law requiring solar panels in new homes - first in state | Miami Herald: Anyone building a new house in South Miami — or in some cases renovating existing ones — will have to install solar panels after the city commission approved a groundbreaking law Tuesday night. The measure, the first of its kind in Florida, will go into effect in two months on Sept 18. The ordinance passed 4-1 Tuesday night, with commissioner Josh Liebman dissenting. Under the rules, new residential construction would require 175 square feet of solar panel to be installed per 1,000 square feet of sunlit roof area, or 2.75 kw per 1,000 square feet of living space, whichever is less. If the house is built under existing trees, the shade may exempt it. Home renovations that replace more than 75 percent of the structure or extend the structure by more than 75 percent would also have to follow the new ordinance. South Miami Mayor Philip Stoddard, a biology professor at Florida International University, has championed this measure. His entire home runs on solar and he drives an electric car. His monthly electric bill is about $10. “Solar reduces the cost of home ownership, it makes houses sell faster, it returns more to a builder, it makes local jobs, and most importantly, it reduces carbon emissions today to help our children and grandchildren have a better future tomorrow,” he said Tuesday night.

Renewable Energy Not a Threat to Grid, Draft of U.S. Study Finds --Wind and solar power don’t pose a significant threat to the reliability of the U.S. power grid, Energy Department staff members said in a draft report, contradicting statements by their leader Rick Perry. "The power system is more reliable today due to better planning, market discipline, and better operating rules and standards," according to a July draft of the study obtained by Bloomberg. The findings -- which are still under review by the department’s leadership -- contrast with Perry’s arguments that "baseload" sources such as coal and nuclear power that provide constant power are jeopardized by Obama-era incentives for renewable energy, making the grid unreliable. “I’ve asked the staff of the Department of Energy to undertake a critical review of regulatory burdens placed by the previous administration on baseload generators,” Perry said last month. “Over the last several years, grid experts have expressed concern about the erosion of critical baseload resources.”Two people familiar with the report, who asked not to be identified discussing internal deliberations, confirmed the early conclusions though cautioned they were subject to change. It is customary for administration officials to put their own stamp on reports prepared by career staff at federal agencies. 

Grid Batteries Are Poised to Become Cheaper Than Natural-Gas Plants in Minnesota -- A new report on the future of energy in the state should turn some heads (PDF). According to the University of Minnesota’s Energy Transition Lab, starting in 2019 and for the foreseeable future, the overall cost of building grid-scale storage there will be less than that of building natural-gas plants to meet future energy demand.Minnesota currently gets about 21 percent of its energy from renewables. That’s not bad, but current plans also call for bringing an additional 1,800 megawatts of gas-fired “peaker” plants online by 2028 to meet growing demand. As the moniker suggests, these plants are meant to spin up quickly to meet daily peaks in energy demand—something renewables tend to be bad at because the wind doesn’t always blow and the sun doesn’t always shine. Storing energy from renewables could solve that problem, but it’s traditionally been thought of as too expensive compared with other forms of energy. The new report suggests otherwise. According to the analysis, bringing lithium-ion batteries online for grid storage would be a good way to stockpile energy for when it’s needed, and it would prove less costly than building and operating new natural-gas plants.

Draft DOE study blames low demand, not regs, for power plant closures | TheHill - A draft version of a Department of Energy study into the electric grid blames decreasing demand and low gas prices — but not renewable power or government regulations — for the retirement of traditional power plants.The study says renewable power and regulations “played minor roles” in the retirement of baseload power plants, traditionally coal and nuclear facilities that supply large amounts of electricity.Instead, electricity grid changes have been driven by a “long-standing drop in electricity demand relative to previous expectations and years of low electric prices driven by high natural gas availability," according to a June 26 draft version of the report released Monday by ThinkProgress.The study is expected to change before the Energy Department formally issues its final version, which may become public this month. E&E News reported Monday that the current version of the study pulls out its conclusions about cheap gas and electricity demand, and a spokeswoman told the paper the draft report is not current. An Energy Department spokeswoman did not immediately respond to a request for comment from The Hill.Energy Secretary Rick Perry mandated the study in April and has said its goal is to ensure the grid provides reliable electricity despite government incentives for renewable power. The draft study’s conclusions would, in a way, undercut Trump administration rhetoric about the impact of regulations and renewable power on electricity availability. The conclusions would be a victory for renewable energy supporters, who have worried the study could serve as a pretext for a Trump administration push to support traditional fuel sources over the growing wind, solar and renewable sectors.

Canadian tribe opposes proposed powerline project in US - Supporters of a controversial project that would bring Canadian hydro power to markets in southern New England like to talk about how this would use much cleaner energy than the coal-fired power plants that once dominated the region. But don’t tell that to members of a Canadian tribe, whose traditional territory is dotted with some the dams, reservoirs and power stations that would provide the energy. Rather than green energy, they contend the infrastructure built by Hydro Quebec for power that will go through the proposed Northern Pass project has decimated a salmon fishery they depend on and harmed their traditional hunting grounds. The Pessamit Innu took their case Thursday to New Hampshire’s Site Evaluation Committee, which is hearing public comment on the project and later this year will vote on whether to approve it. Plans call for building a 192-mile transmission line in New Hampshire — from Pittsburg to Deerfield — carrying enough Hydro-Quebec energy to southern New England markets to power about 1.1 million homes. “This salmon is currently on the verge of extinction,” said Pessamit Innu Chief René Simon in a statement read during the hearing. The tribe contends the annual salmon catch has fallen from more than 1,100 in1948 to less than 100 last year. “Pessamit’s right to fish for traditional purposes, although recognized by the Supreme Court of Canada, is simply no longer applicable,” said the statement from Simon, who couldn’t join other tribal leaders due to illness. Hydro Quebec denies the tribe’s allegation, saying the fishery’s decline has more to do with climate change and the tribe’s fishing practices. 

Big oil's electric fight against coal and nuclear - The American Petroleum Institute, the nation's biggest and most influential lobbying group for the oil and natural gas industry, is fighting nuclear power subsidies across the U.S., poised to oppose any efforts to expand renewable electricity, and telling the Trump administration that its study on the power grid better not hurt natural gas in an effort to help coal and nuclear energy.energy. The entry of API into the debate over power generation is a turning point in an industry long dominated by coal and nuclear energy. It's also a shift at an organization traditionally known for focusing on drilling and the transportation sector. API's members, including Exxon Mobil Corp., and Royal Dutch Shell, are increasingly producing natural gas, and now the group is fighting to make sure that fuel becomes America's dominant source of electricity. A decade ago, coal powered almost 50% of U.S. electricity. By last year, that figure had dropped to 30%, and natural gas has made up most of the difference. Fueled by the oil and natural gas boom over the last decade, API began moving into the electricity business in late 2015, when it acquired another trade group, America's Natural Gas Alliance, whose sole mission was to pump up demand for natural gas. API's broader mission has come into clearer focus over the last few months in three ways. The Energy Department is set to issue as soon as this week a study looking at the electric grid, with a focus on what the government could do to stop coal and nuclear plants from shutting down. Energy Secretary Rick Perry talks a lot about how environmental rules and renewable subsidies are hurting coal and nuclear, but the biggest driver is the bounty of cheap natural gas in stagnant electricity markets. That puts API, a typical ally of the new administration, in an ironic position. 

US coal exports have increased over the past six months – EIA - Coal exports for the first quarter of 2017 were 58% higher than in the same quarter last year, with steam coal exports increasing by 6 million short tons (MMst) and metallurgical coal exports increasing by 2 MMst. Most of these exports were shipped from Atlantic Coast and Gulf of Mexico ports. In EIA’s most recent Short-Term Energy Outlook (STEO), EIA expects growth in coal exports to slow in the coming months, with total 2017 exports forecast at 72 MMst, 11 MMst (19%) higher than the 2016 level.  With coal exports running well below export capacity, no significant expansions of coal export facilities in the United States are currently under construction. Coal export capacity in 2016 totaled 257 MMst, compared with total coal exports of 61 MMst. Facilities in the Norfolk, Virginia, area alone have the capacity to export approximately 84 MMst annually—more than the total amount of coal exported from all U.S. ports in 2016.  Baltimore, Maryland, is the other significant coal export location on the Atlantic Coast, and two facilities in Baltimore have the capacity to export 29 MMst annually: CNX Marine Terminal (15 MMst annually) and CSX terminal (14 MMst). A port expansion at the former Sparrows Point steel plant, by Tradepoint Atlantic, calls for possible coal export facilities, but the size has not yet been specified.  Coal export facilities in the New Orleans area have the capacity to export nearly 60 MMst annually, but planned increases that would more than double the area’s coal export capacity have been canceled, stalled, or gone unpermitted. The Mobile, Alabama, McDuffie coal terminal, which has a capacity of 30 MMst, mainly ships metallurgical coal, and it is also the nation’s largest coal import facility. Smaller export facilities in Texas on the Gulf of Mexico include port facilities in Houston, Galveston, Corpus Christi, and Texas City.

Powder River Basin coal production drops in Q2: US MSHA -- Powder River Basin coal production totaled 75.86 million st in the second quarter, down 9.6% from Q1 but up 21.7% from the year-ago quarter, according to the US Mine Safety and Health Administration. It was the third lowest production total in the last five years; only Q1 and Q2 2016 were lower, at 69.1 million st and 62.4 million st, respectively. Last year, production was down due to historically low natural gas prices, as the NYMEX Henry Hub natural gas futures contract hit a record bottom of $1.639/MMBtu on March 3, 2016. Natural gas prices have been stronger this year, averaging $3.10/MMBtu through June 30. In addition, stockpiles this year are trending lower, though some PRB-burning utilities have reported above-normal inventories. The drop in production could also be the result of increased producer discipline, partly to help support pricing. The over-the-counter price for PRB 8,800 Btu/lb coal for delivery in January-March of this year averaged $12.03/st, while the average for delivery from April-June was $11.70/st. By contract, those prices a year ago were $10.03/st and $9.15/st, respectively, which were generally at or below the cost of production. In the last five years, quarterly PRB coal production peaked at 110.9 million st in the third quarter of 2013. The PRB in Wyoming and Montana is the nation's largest coal production basin, and virtually all of the 330 million st produced last year was consumed by the nation's power sector. Coal from the basin makes up roughly half of US power sector coal consumption.

Is energy 'dominance' the right goal for US policy? --In recent weeks, a new energy buzzword has taken flight from Washington, D.C., making stops in Alaska, North Dakota, Texas, Utah and more: “American energy dominance.” Taking a cue from a 2016 speech by then-candidate Donald Trump, top federal officials including Energy Secretary Rick Perry and Interior Secretary Ryan Zinke have begun to trumpet the notion of energy “dominance.”  Although no Cabinet official has offered a precise definition, it’s a recurring theme in a set of administration events organized around energy policy, including a planned speech by Trump emphasizing exports of coal, natural gas and oil. So what does this new energy catchphrase mean, and how should we think about it?  For consumers, access to international markets ensures energy supplies at more stable prices. For instance, consider what would happen if a hurricane shut down production and refining along the Gulf Coast, the hub of the U.S. oil and gas industry. Without access to global markets, prices for motor fuels, home heating fuels and other products would be far more volatile.  As for producers, they have argued strongly for opening up, rather than sealing off, access to international energy markets. They’ve lobbied to lift restrictions on crude oil exports and encouraged exports of natural gas via new pipelines and liquefied natural gas (LNG) terminals.  Spurred by increased oil and gas production as a result of the shale revolution, these policy changes have resulted in dramatic growth in U.S. energy exports. In fact, net energy exports (energy exports minus energy imports) have risen to their highest level in decades. The United States could even be a net energy exporter by 2020 under one optimistic scenario.

Toxins in water under Tennessee power plant causing alarm  (AP) — Memphis water — drawn from the Memphis Sand aquifer beneath this Tennessee city — is so revered that a city utility called it a "community treasure" in an online report on its cleanliness. So alarms went off after state environmental officials and the Tennessee Valley Authority revealed this week that high levels of arsenic and lead had been found in groundwater beneath the coal-fired Allen Fossil Plant in southwest Memphis. The toxins were detected in wells where pollution is monitored from ponds that hold coal ash — the dirty byproduct left from burning coal to generate electricity. One well had arsenic at levels more than 300 times the federal drinking-water standard. The monitoring wells run about 50 feet (15 meters) deep and are about a half-mile (.8 kilometer) from far deeper wells drilled by the TVA directly into the Memphis Sand aquifer. Next year, the TVA plans to pump 3.5 million gallons (13.2 million liters) of water out of the aquifer per day to cool a natural gas power plant that is replacing the aging Allen coal plant. A layer of clay lies between the groundwater and the aquifer. This prompted the Tennessee Department of Environment and Conservation, through spokesman Eric Ward, to state that it is "confident the contaminants found in TVA wells at the Allen Fossil Plant are not impacting drinking water."Nonetheless, the department has asked Memphis Light, Gas & Water — the city's water utility — to test treated drinking water. It also told the TVA, which has a history of difficulties handling coal ash, to pinpoint where the toxins came from. 

Congressman wants answers on toxins at TVA coal-fired plant  (AP) — U.S. Rep. Steve Cohen is pressing the Tennessee Valley Authority and state regulators for more information about the discovery of excessive levels of arsenic and lead in groundwater under a coal-fired power plant. Cohen's office said in a statement Monday that the Memphis Democrat sent a letter to the Tennessee Department of Environment and Conservation asking the agency why it believes toxins found under the TVA's Allen Fossil Plant in Memphis are not affecting drinking water. Department officials said last week that the TVA has measured excessive levels of arsenic and lead in shallow wells that monitor pollution from coal ash ponds at the aging Allen plant. Coal ash is the dirty byproduct of burning coal. One well had arsenic at levels more than 300 times the federal drinking-water standard. The monitoring wells run about 50 feet (15 meters) deep and are about a half-mile (four-fifths of a kilometer) from far deeper wells drilled by the TVA directly into the Memphis Sand aquifer, which provides the city's drinking water. The TVA plans to pump 3.5 million gallons (13.2 million liters) of fresh water out of the aquifer per day to cool a natural gas power plant that is replacing the coal plant next year. Cohen and environmental groups have raised concerns about the strategy.A layer of clay lies between the groundwater and the aquifer. Still, the monitoring wells' proximity to the deeper wells dug into the aquifer has raised concerns among officials and Memphis residents about the safety of the city's drinking water. 

Coal Plan Sparks Ire as Myanmar Struggles to Keep Lights On (Reuters) - Opposition to a planned $3 billion coal-fired power plant in eastern Myanmar is highlighting the challenges facing Aung San Suu Kyi's government in crafting a coherent energy policy in one of Asia's poorest and most electricity-starved countries. With only a third of the country's 60 million people connected to the grid and major cities experiencing blackouts, finding investors is tough for Myanmar and it is now looking at options, from coal to deep-sea gas, to boost its power supply. Myanmar has reserves of natural gas, but most existing offshore production is exported under agreements struck during the junta era, while new blocks will not come on stream for some years. Coal would be one of the quickest ways to ramp up power generation but, as protests against the proposed 1,280 megawatts (MW) project in the eastern Kayin state show, the option is unpopular in Myanmar. More than 100 activist groups across the country have signed a joint statement calling for the project to be canceled and urging the government to look at renewable energy instead. "They are worried about their land and water, which would be affected by the coal-fired plant," said Kayin-based activist Nan Myint Aung, referring to residents in the area who mostly depend on agriculture. Myanmar aims a more than fourfold increase in its electricity generation of over 23,500 MW by 2030 to meet rising demand, a target experts said will be difficult to achieve - particularly, they say, if policy remains confused. 

Seven charts show why the IEA thinks coal investment has already peaked - Global investment in coal-fired power plants is set to decline “dramatically” after passing an all-time high during the past several years, says the International Energy Agency (IEA).That’s one of the most striking messages from World Energy Investment 2017, published today. The report, now in its second year, offers a comprehensive picture of energy investment from fossil-fuel extraction through to transport, energy efficiency and power networks. The IEA report is not only backwards looking, reporting money already invested. It also offers a glimpse of forthcoming trends, by reporting the value of decisions taken to invest in future. Overall, investment fell again last year, as the oil-and-gas sector continued to cut back in response to low prices. Steady investment in renewables, along with falling costs, saw 50% more capacity being added in 2016 than in 2011. But gains for low-carbon wind and solar are being offset by declines in hydro and nuclear.Carbon Brief has seven charts with the key messages from this year’s energy investment report.

Brexit will cause an ‘alarming mess’ for UK nuclear power, scientists warn --Brexit will create “an alarming mess” for nuclear power stations in the UK, experts have warned, saying it could even cause major power cuts. Scientists say leaving the Euratom agency that oversees nuclear safety in Europe will cause widespread confusion and have a potentially devastating impact on the industry in Britain. Possible consequences include a reduction in foreign investment in UK nuclear power facilities, the loss of thousands of jobs and Britain losing its place as a world leader in new nuclear technologies. Professor Roger Cashmore, chair of the UK Atomic Energy Agency, told Buzzfeed News the current situation was “alarming” and “a mess”. “You could be doing your writing by candlelight on a typewriter” by 2025, Professor Cashmore said. Although the treaties relating to Euratom are separate to those keeping Britain in the EU, the agency requires members to be under the jurisdiction of the European Court of Justice (ECJ), which Theresa May has insisted the UK must withdraw from as part of Brexit.It is unclear how the UK will replace the procedures and regulations currently managed by Euratom. These cover the transportation of nuclear materials around Europe. Britain is a major producer of enriched uranium, which is used in nuclear fuel, and exports much of the material to other EU countries. The UK Government also owns a third of Urenco, the European uranium-enrichment company.Unless new treaties relating to the transportation of nuclear materials between Britain and the EU are agreed quickl y, the UK could run out of nuclear fuel within two years, meaning nuclear power stations would be unable to produce energy.

Fukushima's Nuclear Waste Will Be Dumped Into the Ocean, Japanese Plant Owner Says --  Toxic waste produced by one of the world's worst nuclear disasters will be dumped into the sea, according to the head of the Japanese company tasked with cleaning up the radioactive mess, despite protests from local fishermen.Takashi Kawamura, chairman of Tokyo Electric Power Company (TEPCO), told foreign media that nearly 777,000 tons of water tainted with tritium, a byproduct of the nuclear process that is notoriously difficult to filter out of water, will be dumped into the Pacific Ocean as part of a multibillion-dollar recovery effort following the Fukushima nuclear disaster in 2011. That year, an earthquake and tsunami struck Japan, killing more than 15,000 people and leading to a series of meltdowns at the TEPCO-owned Fukushima No. 1, or Daiichi, nuclear power plant, causing it to spew radiation that has plagued the region ever since.While much progress has been made to clean the area, the company has yet to deal with the water that was used to cool the plant's damaged reactors, causing it to become tainted with tritium. "The decision has already been made," Kawamura claimed, according to The Japan Times.Tepco wants to release the contaminated water that is being stored in hundreds of tanks at the plant into the ocean. According to Reuters, this is a common practice at functioning nuclear plants.Kawamura said that he would urge a government task force responsible for the cleanup of the Fukushima site to disclose when its decision on what to do with the water will be made. "We could have decided much earlier, and that is TEPCO's responsibility," he added, according to Reuters.

Fukushima Radiation and the 2020 Tokyo Olympics ---Former nuclear industry senior vice president Arnie Gunderson, who managed and coordinated projects at 70 U.S. atomic power plants, is appalled at how the Japanese government is handling the Fukushima nuclear crisis. "The inhumanity of the Japanese government toward the Fukushima disaster refugees is appalling," Gunderson, a licensed reactor operator with 45 years of nuclear power engineering experience and the author of a bestselling book in Japan about the Fukushima Daiichi disaster, told Truthout.  He explains that both the Japanese government and the atomic power industry are trying to force almost all of the people who evacuated their homes in the wake of the Fukushima nuclear disaster to return "home" before the 2020 Tokyo Olympics. This March Japan's federal government announced the subsidies that have, up until now, been provided to Fukushima evacuees who were mandated to leave their homes are being withdrawn, which will force many of them to return to their contaminated prefecture out of financial necessity. And it's not just the Japanese government. The International Olympic Commission is working overtime to normalize the situation as well, even though conditions at Fukushima are anything but normal. The commission even has plans for the 2020 Tokyo Olympics to have baseball and softball games played at Fukushima.  And it's not as if the danger is decreasing. In fact, it is quite the contrary. Earlier this year, radiation levels at the Fukushima plant were at their highest levels since the disaster began.  Gundersen thinks it simply makes no sense to hold the Olympics in Japan.  "Holding the 2020 Olympics in Japan is an effort by the current Japanese government to make these ongoing atomic reactor meltdowns disappear from the public eye," he said.

Chechnya's Leader Claims "Russian Doomsday Device" Is Activated --Ramzan Kadyrov, the leader of Chechnya, gave a rare interview to a media outlet in the United States that aired Tuesday, and what he said is taking many aback... While speaking to HBO’s Real Sports, Kadyrov denied that gay people are humans, that they exist in his region, and that his government regularly detains or tortures them, despite ample reports to the contrary. But that isn’t the news that’s riling up the masses,even though it is concerning that Kadyrov is more than likely committing human rights violations. He also made a troubling comment about his country’s nuclear arsenal and a Russian doomsday device. Kadyrov said,“America is not really a strong enough state for us to regard it as an enemy of Russia. We have a strong government and are a nuclear state.Even if our government was completely destroyed, our nuclear missiles would be automatically deployed. We will put the whole world on its knees and screw it from behind.”That comment certainly puts the left’s insistence on a war with Russia in perspective. And Kadyrov is probably being more accurate than not in that statement. According to The New York Times, Russia built a system in the 1980s that could do what Kadyrov described, known as the Perimeter System. Bruce Blair, the former US nuclear officer who broke the story of the Perimeter System for The New York Times in 1993, toldBusiness Insider that the system works when it detects nuclear explosions. Only a small crew, deep in a bunker, has a hand in the otherwise automated system, according to Blair.

Drilling in Ohio parks? Legislators' constitutionally suspect budget amendment: Thomas Suddes - cleveland.com - In Ohio, lobbies for public utilities, insurance companies and banks sit pretty at the Statehouse, with Ohio's nursing home and oil-and-gas lobbies also at the head table. No surprise, then, that Ohio's Republican-run House overrode some Medicaid-related budget items that Republican Gov. John Kasich vetoed. If the Senate, also GOP-run, also overrides those item-vetoes, the net effect would be to limit Kasich's options for managing the Ohio Medicaid program's nursing home costs. Then there's the Kasich item-veto about a hot-button environmental issue: gas and oil exploration.  The fracking boom in heavily Republican Appalachia seems to have made oil and gas lobbyists nothing but good guys in the eyes of Republican legislators. So, they've spurned Kasich's bids to raise Ohio's puny severance taxes. In 2011, Kasich signed a bill passed by the legislature's Republicans that opened state parks to oil and gas exploration. (Got a hard hat, Bambi?) The bill also created the Oil and Gas Leasing Commission. The commission's job is to select the "highest and best" bidders for oil and gas leases of state-owned land.   But Kasich hasn't appointed anyone to the commission. No commissioners, no leases; no leases, no drilling. That evidently has ticked off some Republicans in the General Assembly. They folded an amendment into House Bill 49, Ohio's new budget. The amendment would strip Kasich of the power to appoint the members of the Oil and Gas Leasing Commission. Instead, the budget amendment would give Ohio House Speaker Clifford Rosenberger, of southwest Ohio's Clinton County, and state Senate President Larry Obhof, of Medina, both Republicans, the power to appoint the Leasing Commission's members. Kasich (as he should have) item-vetoed the Oil and Gas Leasing Commission budget amendment, saying that what the legislature was trying to do "would transfer appointment authority ... from the governor to the General Assembly." The House, in a 68-29 tally, overrode Kasich's line-item veto. If the Senate does, too, someone just might consider asking a court what separation of powers means in Ohio. At the moment, the answer seems to be, "Not much."

Common Pleas Court will now consider county charter issue –   The Athens County Common Pleas Court is expected to hear a protest today (Monday) of a county Board of Elections’ decision to deny as invalid a proposed county charter for the November ballot. Judge George P. McCarthy is scheduled to hear arguments in the protest at 2:30 p.m. The Board of Elections rejected a proposed county charter for the third year in a row last Monday, not due to a lack of valid signatures but because board members said it didn’t include a county executive position required under Ohio Revised Code statute for alternative forms of government. The Athens County Bill of Rights Committee, which submitted the petitions, charged that the elections board erred in its decision and filed a protest of it. The committee has argued that the charter proposal falls under Ohio constitutional guidelines and not the Ohio Revised Code statute that covers alternative forms of government. The Bill of Rights Committee argued that charters formed under the state constitution are distinct and separate from alternative governments established under Ohio Revised Code. Members of the county Board of Elections said, on the other hand, that charters formed under the state constitution must still conform to the laws for alternative government set fourth in the ORC. As with initiatives in the previous two years, this charter proposal doubles as an effort to keep oil and gas horizontal hydraulic fracturing (fracking) out of Athens County, through prohibiting the use of local water for fracking operations. It also would outlaw future fracking waste-injection wells, of which Athens County already has several in operation. If the charter is determined by Judge McCarthy to be valid after Monday’s hearing, the next step will be for the court to notify the Board of Elections and the Athens County Board of Commissioners. At that point, the commissioners would have to certify the resolution no later than July 19 to the elections board.

Feds investigating Ohio pipeline over ‘misstatements’ | TheHill: Federal officials are investigating the developer building a controversial natural gas pipeline over alleged “misstatements” regarding its construction in Ohio. Federal Energy Regulatory Commission (FERC) staff said in a Thursday notice that they preliminarily determined that Energy Transfer Partners, developer of the Rover pipeline, “did not fully and forthrightly disclose all relevant information to the commission” in paperwork filed for a federal permit. The disclosure of the FERC investigation and preliminary finding are the latest problem for Rover, whose developer also built and operates the controversial Dakota Access pipeline.Ohio officials have accused Energy Transfer of spilling drilling waste that includes diesel fuel at a pipeline construction site, where it allegedly entered wetlands near a river. That spurred FERC to order Energy Transfer to stop horizontal drilling for the pipeline temporarily. The Thursday finding regards a historic house that Energy Transfer purchased and demolished in Ohio for the construction. State historic preservation officials say that the house was a protected historic landmark and its demolition was illegal. “In the application and other docketed filings, Rover falsely promised it would avoid adverse effects to a historic resource that it was simultaneously working to purchase and destroy,” FERC wrote in its notice. “Rover subsequently made several misstatements in its docketed response to the commission’s questions about why it had purchased and demolished the resource.” 

Spills, Fines and Route Disputes Plague Rover Pipeline -- The Rover Pipeline project in Ohio faces continuing problems, with more spills of drilling mud , ongoing questions about diesel fuel contamination, and orders issued last week by both the Ohio Environmental Protection Agency (EPA) and the Federal Energy Regulatory Commission (FERC).  "The significant thing that is very new here is that Ohio EPA has said that they are working very closely with the Federal Energy Regulatory Commission," observed Cheryl Johncox of the Sierra Club . FERC issued a July 12 order that echoes multiple directives from the Ohio EPA's July 7 order to Energy Transfer Partners.   FERC also issued another notice of violation on July 13 , claiming that Energy Transfer Partners "did not fully and forthrightly disclose all relevant information" before demolishing a historic home . Meanwhile, more problems with the project have also emerged in Michigan and West Virginia.  On July 2, drilling for the Rover Pipeline project released 5,000 more gallons of drill slurry into a Stark County area where the company was working on a five-foot borehole that would go under the Tuscarawas River. Work was already underway to deal with a previous spill in that area.  On July 3, another "inadvertent release" of 1,500 to 2,500 gallons of drilling mud took place at a nearby area ten feet from the river. This month's leaks are a tiny fraction of the millions of gallons already released by the Rover Pipeline's drilling work in Ohio. The Ohio EPA issued a proposed administrative order against Energy Transfer Partners in May. On July 7, Ohio EPA Director Craig Butler issued final findings and orders to Energy Transfer Partners, adding the new releases to its initial list of charges. The order also notes that some previously-leaked material had subsequently been found to contain diesel fuel . The fluids are defined as "industrial waste" under Ohio law and must go to a licensed landfill or other authorized location, the July 7 order noted. The total fines sought from the company so far exceed $900,000 , and the matter has been referred to the Ohio Attorney General's office for possible further action. Announcing the referral on July 10, Butler described the company's response leading up to the action as "basically a stiff arm to the state of Ohio."

 Rover gas pipeline builder faces investigation by federal regulators - Federal regulators will investigate Energy Transfer Partners, the company behind the controversial Dakota Access pipeline in North Dakota, for alleged violations associated with its $4.2 billion Rover natural gas pipeline in Ohio.The investigation comes as the number of violations and fines against the company over the Rover project continue to grow. "Rover falsely promised it would avoid adverse effects to a historic resource that it was simultaneously working to purchase and destroy,"FERC wrote in its Notice of Alleged Violations. "Rover subsequently made several misstatements in its docketed response to the Commission's questions about why it had purchased and demolished the resource." The historic resource in question was the Stoneman House, a historic home built in 1843 in Dennison, Ohio.  A Dec. 5, 2016, letter from FERC to the federal Advisory Council on Historic Preservation stated that the house, which was eligible for inclusion in the National Register of Historic Places, was located across the street from a proposed compressor station for the pipeline. FERC officials expressed concern to pipeline company representatives about the visual impact of the compressor station on the historic house in February 2014,according to the letter. Rover purchased the Stoneman House on May 11, 2015, and a year later, without notifying FERC, demolished the building in late May of 2016. Unaware that the building had just been destroyed, FERC recommended on July 29, 2016, that Rover develop a revised visual screening plan for the proposed compressor station to shield views from the historic property. "I think it's somewhat consistent with this company and what they are doing in Ohio," said Craig Wilson, an attorney who represents approximately 140 clients, mostly farmers concerned about damage to their farmland from the pipeline. "They just go do things and ask for forgiveness after the fact." Heavy rains in Ohio this spring have caused trenches dug by the pipeline company to flood, Wilson said. The company then pumped the water onto surrounding agricultural fields, flooding crops, according to Wilson, who has petitioned FERC to investigate the damage. In addition, he said, the trench work has mixed topsoil that is good for growing crops with underlying, nutrient-poor layers that will permanently reduce crop yields once the work is completed. "We've never experienced anything like this company in Ohio before," he said. "They had that culture since day one when they came into Ohio. They were running a pipeline through here, and they were basically telling the landowners to get out of the way."

Dakota Access developer’s new pipeline rankling regulators  — The company that developed the Dakota Access oil pipeline is entangled in another fight, this time in Ohio where work on its multi-state natural gas pipeline has wrecked wetlands, flooded farm fields and flattened a 170-year-old farmhouse. The federal commission that oversees gas pipelines told Dallas-based Energy Transfer Partners last week to clean up its mess before it will allow the Rover Pipeline to flow. New drilling on unfinished sections also remains halted after 2 million gallons (7.6 million liters) of drilling mud seeped into a wetland in the spring.While the $4.2 billion pipeline that will carry gas from Appalachian shale fields to Canada, and states in the Midwest and Gulf Coast, hasn't been besieged by protests that erupted in North Dakota, opponents say the spills and snags highlight the risks that come with building huge pipelines needed for growing the natural gas and oil industries. Much of the 700-mile (1,126-kilometer) Rover Pipeline is being built across Ohio and will extend into Michigan, Pennsylvania and West Virginia. Ohio's environmental regulators and landowners say construction crews have been laying pipe at warp speed since March to meet the company's ambitious plan of finishing the first phase this month and the entire project by November. "As soon as they started, they began having problems," said Craig Butler, director of Ohio's Environmental Protection Agency. "It's just a function of them moving too quickly, trying to meet a deadline and cutting corners."

Kentucky accused of secrecy in radioactive fracking waste dumping case - The Courier-Journal An Estill County citizens group has accused state environmental regulators of illegal secrecy during its enforcement case against a dump that accepted radioactive drilling waste from out-of-state fracking operations.Both sides squared off Wednesday in Franklin Circuit Court, arguing before Judge Phillip Shepherd.The group Citizens of Estill County wants to read 89 email chains between lawyers for the Kentucky Energy and Environment Cabinet and lawyers representing the Blue Ridge Landfill. It wants to make sure a pending corrective action plan required by an agreement between the state and landfill operation protects the public and the environment, and the emails will help determine that, said Mary Cromer, a lawyer who presents the citizen group. The state incorrectly argues that it doesn't have to release the emails because it shares a common interest with the landfill, among other exemptions Kentucky claimed, Cromer said. In fact, she argued, that state's role as a regulator is different from an entity it is regulating. For their part, cabinet officials said both sides shared an interest in reaching an agreement without more costly litigation, and that state officials have gone beyond their normal practices to seek public comments and meet with the Estill group before making its enforcement decisions.

Fracking: report warns of risks associated with shale gas extraction - Residents, environmentalists and pastoralists have welcomed a “balanced” report on fracking in the Northern Territory, which identified a number of risks associated with the industry and a loss of community trust. The NT government enacted a moratorium on hydraulic fracturing in the NT when it took office in August, establishing an inquiry to examine if it could be done safely, following concerted campaigning by Indigenous land owners, pastoralists and environmentalists. The NT is estimated to have more than one-third of Australia’s shale gas resources, 70% of which are found in the Beetaloo sub-basin. The site has received about half of the $505m of exploration investment since 2010 and is the main target for future development. The interim report from the inquiry, run by a panel of experts, said its “preliminary view” was that the use of surface water for shale gas operations should be prohibited in arid and semi arid areas. Groundwater should not be permitted for use in fracking without proof there would be no adverse impacts, it said, and fracking during the Top End’s wet season should not be allowed at all because of the potential for storage ponds to overflow. The report noted most national parks, reserves and areas of high conservation were not currently “no go zones” and could be subject to petroleum exploration permits applications. The panel said it would consider the risks a shale gas industry may have on those areas, as well as residential areas, agricultural land, sacred sites and tourism icons should be excluded from potential fracking wells. The report also identified several land-related risks, including detracting from iconic landscapes, damage to biodiversity and habitat loss, spreading weeds and changing fire regimes, as well as potential risks to public health including contamination of aquifers and airborne chemicals. 

Wastewater from Hydraulic Fracturing May Cause Pollution with Radioactive Material: Hydraulic fracturing has led to a domestic gas and oil boom in the U.S.; however, its fast growth has raised questions about the billions of gallons of wastewater that result from this process.  Researchers now state that treating the wastewater and releasing it into surface waters in Pennsylvania has contaminated water with radioactive material and endocrine-disrupting chemicals. The study is published in ACS' journal Environmental Science & Technology.A report in Pennsylvania estimates that 10,000 unconventional gas and oil wells in Marcellus Shale generated 1.7 billion gallons of wastewater in 2015. The facilities that collect the water offer only limited treatment before releasing it to surface waters. Bill Burgos and Collaborators at Penn State, Colorado State and Dartmouth wanted to examine the impact these water facilities may have in treating and releasing fracking wastewater.  The Researchers sampled porewaters and sediments from a lake located downstream from two facilities that treat fracking wastewater in Pennsylvania. The analysis detected the presence of peak concentrations of salts, radium, alkaline earth metals and organic chemicals in the same sediment layer. The two major classes of organic contaminants detected were polycyclic aromatic hydrocarbons, which are carcinogens and nonylphenol ethoxylates, which are endocrine-disrupting chemicals.The highest concentrations detected in sediment layers were deposited 5 to 10 years ago during a peak phase of fracking wastewater disposal. High levels of radium were also found in water as far as 12 miles downstream of the treatment plants. According to Researchers, the potential threats associated with this contamination are unknown; however, they express that modified regulations of wastewater disposal could help protect human health and the environment.

Fracking waste contaminates Penn. watershed with radioactive material -Stream sediments in Pennsylvania downstream from two fracking wastewater treatment facilities were found to contain radioactive material and carcinogens, according to study scientists from Penn State, Colorado State and Dartmouth universities.  The study’s findings, published Thursday, came after Penn State’s Bill Burgos and his fellow scientists sought to discover what had been the effect of the strategy of treating and releasing fracking wastewater, according to the Independent. They sampled sediments and groundwater from the Conemaugh River water, downstream from two facilities that were created to make the water used in the fracking process fit for release into the environment. “Isotopic ratios of 226Ra/228Ra and 87Sr/86Sr identified that peak concentrations of Ra and Sr were likely sourced from wastewaters that originated from the Marcellus Shale formation,” according to the study Watershed-Scale Impacts for Surface Water Disposal of Oil and Gas Wastewater in Western Pennsylvania. Their analysis detected peak concentrations of radium, chloride, barium, strontium, radium and organic compounds in Conemaugh River watershed. The two major classes of organic contaminants included nonylphenol ethoxylates, endocrine-disrupting chemicals, and polycyclic aromatic hydrocarbons, known carcinogens.  The highest concentration of radium was just 14 percent below the level at which it would have to be treated as radioactive waste in some US states.

Treated hydraulic fracturing wastewater may pollute area water sources for years --- Although studies show that hydraulic fracturing does produce less greenhouse emissions than older technologies like coal, it does come with other environmental concerns. At the top of that list is the wastewater it produces, which contains a multitude of potentially hazardous contaminants. In 2015 alone, Pennsylvania's unconventional gas wells produced nearly 1.7 billion gallons of wastewater. While there are facilities dedicated to treating the wastewater before its release, they provide only limited treatment, leaving many of the pollutants intact. To gain a better understanding of the impact of these contaminants on the environment, Penn State environmental engineering professor Bill Burgos and his colleagues studied sediment samples collected from a reservoir in western Pennsylvania. The study was published in the most recent issue of Environmental Science & Technology. " The objective of the study was to use the sediments that had built up to reconstruct the industrial oil and gas activity that was happening during the boom of the Marcellus Shale development in Pennsylvania, from roughly 2008 to 2015, in order to gain a better understanding of the historical impact of oil and gas wastewater disposal. "You need a lake or a reservoir that allows sediments to lay down undisturbed in those layers," said Burgos. "The words we use are a 'coherent temporal record.' You only get a coherent temporal record if it's a lake that continuously accumulates sediments and isn't subject to a flood or scour." The researchers chose the Conemaugh River Lake in western Pennsylvania. This site offered high wastewater concentration and low wastewater dilution, as well as a dam-controlled reservoir. The results determined that the discharge of oil and gas wastewater did impact water quality and sediment quality on a larger scale than previously thought. Large quantities of oil and gas wastewater with high loads of chloride, barium, strontium, radium and organic compounds left high concentrations in the sediments and pore water. Specifically, two important types of organic contaminants were found: endocrine disrupting chemicals (nonylphenol ethoxylates) and carcinogens (polycyclic aromatic hydrocarbons). The highest concentrations coincided with sediment layers deposited five to 10 years ago, during the peak of Marcellus Shale activity. "The isotopes confirm these are unconventional oil and gas wastes," said Burgos. Some isotope ratios, such as strontium and radium, are rather unique to the Marcellus formation. This current study demonstrates that elevated levels were found as far away as 12 miles downstream from the treatment plants.

Thousands of Miles of Pipelines Enrage Landowners, Threaten the Future of Our Planet --They landed, one after another, in 2015: plans for nearly a dozen interstate pipelines to move natural gas beneath rivers, mountains and people's yards. Like spokes on a wheel, they'd spread from Appalachia to markets in every direction. Together these new and expanded pipelines—comprising 2,500 miles of steel in all—would double the amount of gas that could flow out of Pennsylvania, Ohio and West Virginia. The cheap fuel will benefit consumers and manufacturers, the developers promise. But some scientists warn that the rush to more fully tap the rich Marcellus and Utica shales is bad for a dangerously warming planet , extending the country's fossil-fuel habit by half a century. Industry consultants say there isn't even enough demand in the U.S. for all the gas that would come from this boost in production.   And yet, five of the 11 pipelines already have been approved. The rest await a decision from a federal regulator that almost never says no. The Federal Energy Regulatory Commission (FERC) is charged with making sure new gas pipelines are in the public interest and have minimal impact. This is no small matter. Companies given certificates to build by FERC gain a powerful tool: eminent domain, enabling them to proceed whether affected landowners cooperate or not.  Only twice in the past 30 years has FERC rejected a pipeline out of hundreds proposed, according to an investigation by the Center for Public Integrity and StateImpact Pennsylvania , a public media partnership between WITF in Harrisburg and WHYY in Philadelphia. At best, FERC officials superficially probe projects' ramifications for the changing climate , despite persistent calls by the U.S. Environmental Protection Agency ( EPA ) for deeper analyses. FERC's assessments of need are based largely on company filings. That's not likely to change with a pro-infrastructure president who can now fill four open seats on the five-member commission.

Catholic nuns in Pa. build a chapel to block the path of a gas pipeline planned for their property -- Linda Fischer has always known this land as sacred. Now the 74-year-old nun and her sisters in their Catholic order suddenly find themselves fighting to protect the land from an energy company that wants to put a natural gas pipeline on it. “This just goes totally against everything we believe in — we believe in sustenance of all creation,” she said. The pipeline company first sought without success to negotiate with the nuns. Now as Williams Cos. tries to seize the land by eminent domain, the order is gearing up for a fight in the courtroom — and a possible fight in the field, as well. There, smack in the path of the planned pipeline, the nuns have dedicated a new outdoor chapel. “We just wanted to symbolize, really, what is already there: This is holy ground,” said Sister Janet McCann, a member of the national leadership team of the Adorers of the Blood of Christ, whose 2,000 nuns around the world have made environmental protection and activism a key part of their mission. The sisters’ chapel is a rudimentary symbol, but a powerful one: eight long benches, a wooden arbor and a pulpit, all on a straw-coated patch of land carved out of the cornfield. More than 300 people came to the chapel’s consecration service July 9. Since then, neighbors of many faiths have been stopping by to pray, leaving ribbons to mark their solidarity. The Adorers and their supporters’ nascent faith-based resistance, which has been compared to the anti-pipeline activism led by Native Americans at Standing Rock, N.D., could eventually set a precedent in a murky area of religious freedom law.  U.S. appeals court judges have ruled inconsistently on whether federal law protects religious groups from eminent domain in such cases. The U.S. Court of Appeals for the 3rd Circuit, which covers Delaware, New Jersey and the part of Pennsylvania where the nuns reside, has yet to issue a ruling on the matter. Legal observers say a case could make its way to the U.S. Supreme Court.

Nuns Head to Court to Defend Chapel Blocking Pipeline Route - A group of about 30 Catholic nuns in Lancaster County, Pennsylvania, who constructed an open-air chapel on the proposed path of natural gas pipeline, are in court on Monday fighting efforts by the fossil fuel company trying to seize their land.  The sisters appeared at a U.S. District courthouse in Reading for an 11:00 a.m. hearing, following two prayer vigils earlier Monday morning.  About six months ago, they came up with the idea to build the chapel on their farmland as "a visible symbol of their commitment to the land," Mark Clatterbuck, of Lancaster Against Pipelines —which helped build the chapel— told the York Daily Record, a local paper.  "We have to pay reverence to the land God has given us," said Sister George Ann Biscan. "We honor God by protecting and preserving His creation."   Friday, seeking a federal injunction, the Adorers filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania, claiming the Federal Energy Regulatory Commission (FERC), which regulates interstate natural gas pipelines, and its commissioner have violated the Religious Freedom Restoration Act, "by forcing the Adorers to use their land to accommodate a fossil fuel pipeline," the order said in a statement .  The nuns, the statement continued, "allege that FERC's action places a substantial burden on their exercise of religion by taking their land, which they want to protect and preserve as part of their faith, and forces the Adorers to use their land in a manner and for a purpose they believe is harmful to the Earth."  The complaint followed an emergency motion filed by the pipeline's developer, Tulsa-based Williams Companies, "in an attempt to take immediate possession of the property and get permission to deploy U.S. Marshals on the nuns and 'any third parties authorized by the sisters to be on the property,'" Sojourners reported .  The pipeline, called "Atlantic Sunrise," is slated to stretch across more than 180 miles of central Pennsylvania and link to the company's Transco pipeline, which carries gas from the Gulf of Mexico to the East Coast. FERC approved the project in February, and Williams began construction in early spring.

Is Putin funding anti-fracking groups? Republicans think so — and so did Hillary Clinton – Salon -- Does Russian President Vladimir Putin want to stop hydraulic fracturing, or “fracking,” in Western nations the same way he allegedly wanted to harm the electoral chances of 2016 Democratic nominee Hillary Clinton? According to two Texas Republican congressmen, the answer is yes. It’s entirely likely that the open letter on this subject sent by Reps. Lamar Smith and Randy Weber on June 29 to Treasury Secretary Steve Mnuchin was partly motivated by a desire to shift public attention from President Donald Trump’s burgeoning Russian-influence scandal. But the allegations have some support from non-Republicans. One person who appears to believe that the Russians are interested in stopping oil and gas extraction via fracking, in fact, is Hillary Clinton herself. In a private, paid speech delivered in Canada on June 18, 2014, the former secretary of state denounced “phony environmental groups” she claimed had been created by Russia to oppose fracking.“We were even up against phony environmental groups, and I’m a big environmentalist, but these were funded by the Russians to stand against any effort, oh that pipeline, that fracking, that whatever will be a problem for you, and a lot of the money supporting that message was coming from Russia,” Clinton said, according to an excerpt from the speech created by her presidential campaign staffers. It is unclear what region of the world Clinton was discussing, since the full text of her speech has never been made available by Clinton or by tinePublic, the Canadian marketing firm that paid her to deliver it. Ironically, the excerpt that is publicly available was among the tens of thousands of emails released by WikiLeaks, allegedly thanks to the efforts of Russian hackers who copied them from the email account of John Podesta, Clinton’s former campaign manager.Clinton’s speech was delivered to an audience in Edmonton, the capital of Alberta, the Canadian province that produces more petroleum than any other within the country.

A pipeline cutting through the iconic Appalachian Trail sparks a fight over natural gas expansion - - The stretch of Appalachian Trail through the Blue Ridge Mountains here is prized by hikers from around the world for its open ridgelines, spectacular geologic formations and challenging slopes.But one of the country’s most iconic viewsheds could soon be changed forever to make room for an energy project favored not just by fossil fuel industry boosters like President Trump, but also Virginia’s Democratic governor.A natural gas developer with some powerful political allies is nearing final approval to plow a pipeline corridor as wide as 150 feet, tracking the trail for dozens of miles and burrowing through it at one point.Amid the nation’s ongoing boom in natural gas production, federal rules have made pipeline construction an extremely lucrative enterprise, even in markets where the need is hotly debated.To many, the Mountain Valley Pipeline has become a symbol of the building frenzy. Concern stretches all the way to California, where climate activists worry that such projects are undermining their efforts. Leaders of the Pacific Crest Trail Assn. fear that gas companies feel increasingly emboldened to impose an ever bigger footprint on protected lands.“Everybody, not only in the East, but around every national scenic trail, should be concerned about this,” said Andrew Downs, regional director with the Appalachian Trail Conservancy, the 90-year-old nonprofit organization entrusted by the National Park Service decades ago with the task of managing the trail. The conservancy has never found it necessary to get involved in a pipeline fight in this way, but times have changed. “We’ve never seen pipelines of this size and magnitude,” Downs said.The conservancy is joined by preservationists deeply concerned that the pipeline route would cut through seven historic districts. Those include the picture-postcard village of Newport, a place where generations of families have picnicked by the 100-year-old covered bridge and gathered at the 164-year-old church in the center of town. The pipeline has pushed Newport onto the list of “most endangered historic places” compiled by the group Preservation Virginia.

 MPLX's Expanded Plan for Piping Marcellus/Utica NGLs and Field Condensate -- MPLX is wrapping up a three-part, $500 million plan to facilitate the pipeline transport of large volumes of field condensate and natural gasoline from the Marcellus and Utica plays to Midwest refineries, western Canadian heavy-crude shippers and other end users. But “wrapping up” may be the wrong phrase. In fact, MPLX sees its Cornerstone Pipeline, Utica Build-Out Projects and other elements of the company’s Midwest pipeline push as part of a larger and continuing effort to deal with remaining inefficiencies in the delivery of Marcellus/Utica liquids to market. Today we review what has been accomplished so far, and what expansions and enhancements to MPLX’s pipeline plan may be in the offing.  It would be difficult (if not impossible) to find anyone who has done more than MPLX (a master limited partnership formed by Marathon Petroleum Corp. (MPC) and its MarkWest Energy Partners unit) to address the challenges of increasing volumes of natural gas liquids (NGLs) and field condensate produced in eastern Ohio’s Utica play and the liquids-rich portion of the Marcellus play in western Pennsylvania and northern West Virginia. As we discussed in our Join Together With Demand Drill Down Report, MarkWest not only developed an extensive portfolio of natural gas processing plants (to separate mixed NGLs from the raw gas stream that emerges at the wellhead) and fractionators (to split mixed NGLs into purity products like ethane, propane, butane and natural gasoline), but also a network of intraregional pipelines to help manage the efficient flow of NGLs — especially ethane, the lightest and most challenging NGL to store and transport. More recently, in Part 1 and Part 2 of our “1-2-3” blog series, we considered MPLX’s plan to more efficiently transport the heavier end of the NGL barrel (namely, natural gasoline; a.k.a. plant condensate or pentane-plus) and field condensate (a superlight crude oil also known as lease condensate) to end users.

President Trump announces plan to nominate McIntyre for US FERC - President Donald Trump announced late Thursday his intent to nominate Jones Day attorney Kevin McIntyre to the US Federal Energy Regulatory Commission and designate him chairman, a move that has been expected since March but has dragged out longer than other nominations. Once the White House sends over his formal paperwork, McIntyre would be the third Republican pick Trump has made for the commission, which currently lacks a quorum needed to approve key energy projects including natural gas pipelines. Related: Find more content about Trump's administration in our news and analysis feature. Trump has also announced plans to nominate Richard Glick, a Senate energy panel staffer backed by Democrats. Sending paperwork over for that nomination has been seen as pivotal to lifting the logjam for the two Republican nominees currently awaiting Senate floor action. A White House statement said McIntyre would fill a term expiring June 30, 2018, and additional five-year term expiring June 30, 2023. That would effectively mean the White House was nominating him for two terms at once. McIntyre is co-leader of the global energy practice at Jones Day, and the White House noted his expansive FERC practice "representing clients in all industry sectors -- natural gas, conventional electricity, oil, hydropower, wind power and other renewable resources, and energy marketing and trading." 

FERC Paves Way for Atlantic Coast Pipeline -- The Federal Energy Regulatory Commission (FERC) paved the way Friday for the 600-mile, 42-inch fracked gas Atlantic Coast Pipeline to proceed when it issued the final environmental impact statement (FEIS) . A joint project of utility giants Duke Energy and Dominion Energy, the Atlantic Coast Pipeline would move fracked gas from West Virginia into Virginia and North Carolina.  In April, the Sierra Club submitted more than 500 pages of legal and technical comments on FERC's draft EIS, which were joined by more than 18,000 individual comments detailing opposition to the project. The pipeline has been met with widespread opposition , with more than 1,000 people participating in public hearings across the three affected states. The Sierra Club recently requested that FERC issue a new environmental review document analyzing information that came in after or late in, the public comment process.  "Despite all its rhetoric, FERC continues to prove it's nothing more than a rubber stamp for fracked gas pipelines that threaten our communities and our climate," Deb Self, a Sierra Club Beyond Dirty Fuels campaign representative, said. "FERC has failed to account for the dangers the Atlantic Coast Pipeline, which would lock communities into the dirty and dangerous fuels of the past when clean, renewable energy options are readily available."  Obstacles remain for the Atlantic Coast Pipeline, as it still must secure water quality permits in West Virginia, Virginia and North Carolina, where the project is widely opposed. Recently, state agencies have denied certification for three gas pipelines because pipeline companies failed to prove they could protect state waters. The Forest Service and Bureau of Land Management must consider impacts to species, habitats and landscapes on public lands crossed by the pipeline.  "Along the 600 miles of this proposed pipeline and across the affected states, people are organizing and standing up for their water, protection of public and private lands, and their way of life," Kate Addleson, director of the Virginia Chapter of the Sierra Club, said. "Our streams, forests, and endangered species need protection, and so do our communities. Landowners shouldn't have their land taken for private companies' profit, and residents shouldn't be saddled with higher utility bills to pay for an unneeded, destructive pipeline that threatens communities and the climate."

Residents concerned over possible fracking in Barry County | Fox17: -- Some Barry County residents are worried about the possibility of hydraulic fracturing, also known as fracking, coming to their town. It comes after a group from Texas submitted a permit to the Michigan DEQ to construct an oil well in Carlton Township. The group Interstate Explorations out of Texas submitted a permit a few weeks ago to the Michigan Department of Environmental Quality. They now have 30 days to send it back with revisions. In the meantime, residents are rushing to learn more about it and what they can do to stop the permit from getting approved. Concerned residents gathered for an informational session at the Hastings Public Library Saturday afternoon. “I’m very concerned about the possibility of a frack well happening in Barry County, said Craig Brainard. "In fact the proposed location I saw is only about six miles from my home” Brainard is from the Sierra Club and presented information about how the Boulter 1-17 permit could impact the community. Residents at the meeting  said their biggest concern is the water and what fracking might do to it. “My biggest concern is that water remains usable," said Doris Hale of Hastings.  "My biggest concern is the chemicals in the water and then by extension what would happen to property values.”

Senate's Dirty Energy Bill Would Lock U.S. Into Fossil-Fuel Dependency for Decades -- In the wake of Senate Republicans' ever-deepening debacle over their flailing attempts to strip health insurance from 22 million people, Majority Leader Mitch McConnell is desperate to do something—anything—to show that he can get legislation passed. To this end, he's bypassing the standard committee review process to push a complex 850+ page energy bill straight to the full Senate floor. Perhaps not surprisingly, this legislation, the Energy and Natural Resources Act of 2017, would be a disaster for public health and our climate . Despite its benign-sounding name, the bill would be a catastrophe, effectively locking the U.S. into fossil-fuel dependency for decades. This dirty energy legislation would allocate millions of dollars for the discovery and extraction of fossil fuels off U.S. coastal waters, speed up the review period required for fracked gas terminals and instruct the Bureau of Land Management to create a program to expedite drilling and fracking permits. These are shameful giveaways to the oil and gas industry—directly in line with Trump's pro-fossil fuel agenda. Even worse, the bill gives no mention of clean wind and solar power—precisely at a moment in our history when we need to transition to 100 percent renewable energy now. The science is clear: If we're going to have a chance of avoiding the worst of climate catastrophes and public health crises in coming years, we need to get off fossil fuels immediately. NC governor on Trump drilling plan: ‘Not off our coast’ | The Seattle Times: (AP) — Under pressure from President Donald Trump, North Carolina’s governor announced his opposition on Thursday to drilling for natural gas and oil off the Atlantic coast, saying it poses too much of a threat to the state’s beaches and tourism economy. Up against a Friday deadline for comment from elected officials on the Trump administration’s request for companies to perform seismic testing under Atlantic waters, Democratic Gov. Roy Cooper held a news conference at a coastal state park to announce he’ll be registering the state’s opposition. “There is a threat looming over this coastline that we love and the prosperity it brings, and that’s the threat of offshore drilling,” Cooper said at the Fort Macon State Park in Carteret County, where he said he visited as a child and as a parent. “As governor, I’m here to speak out and take action against it. I can sum it up in four words: ‘not off our coast.'” In April, Trump signed an executive order to expand oil drilling in the Arctic and Atlantic oceans, reversing restrictions imposed by President Barack Obama, and the Interior Department is rewriting a five-year drilling plan. A federal agency is now seeking permits for five businesses to use seismic air guns to find oil and gas formations deep under the Atlantic, despite the harm environmentalists say this technology does to marine mammals. Maryland GOP Gov. Larry Hogan also announced his opposition this month. \ 

Louisiana producers face up to $50 billion in litigation: state oil, gas group --Lawsuits alleging the hydrocarbons industry is largely responsible for the erosion of Louisiana's southern coast could cost participants upwards of $50 billion in damages and irreparably harm the state's business reputation, an industry association executive said Monday. "If you carry it all the way out and at the end of the day and the industry loses, which we don't believe we will, the numbers get thrown around are $30, $40, $50 billion," said Gifford Briggs, vice president of the Louisiana Oil and Gas Association. "You start put numbers like that it, it likely signals the end of the industry in Louisiana," Briggs said in an interview Monday. Briggs' comments came in response to a resolution filed last week by New Orleans City Councilman Jason Williams urging the city to join in the effort to sue the oil and gas producers to raise funds for coastal protection. Six coastal Louisiana parishes are now suing about 300 industry players, seeking damages. The New Orleans City Council tabled action on the resolution, which called on the city to join the lawsuits filed by the coastal parishes. The resolution alleged that the oil industry had refused to negotiate with the city over the alleged part it played in the loss of 2,000 square miles of wetlands over the years. Although the city council deferred action on Williams' resolution last week, Briggs said the threat to the state's exploration and production industry remains. 

It's murky waters when considering expanded US offshore oil and gas drilling -- Favorable price differentials are leading to growing US crude exports from the Gulf Coast, which in turn is helping to fuel an infrastructure buildout that will encourage even more exports and new entrants into the US market. Crude oil exports have increased recently amid widening discounts for both WTI Midland and WTS (West Texas Sour) Midland. So far in July, the average discount of WTI Midland was WTI cash minus $1.05/b, down 21 cents from June. WTS Midland discounts over the same time have fallen to WTI cash minus $1.18/b, down 9 cents, according to Platts data. A wider discount makes grades like WTI and WTS more attractive to export. Arbitrage economics have been reinforced by a widening WTI/Dubai spread. Month on month, the swap spread between WTI and Dubai widened 20 cents/b to $1.22/b last week. As this spread widens, WTI-based crudes like Bakken become more economic choices in countries like China, providing stiff competition to pricier Dubai-based imports. The discounts are driven not only from increased production from the Permian, there have been increased flows south from the Bakken via the southern leg of the Dakota Access Pipeline—called the Energy Transfer Crude Oil Pipeline (ETCOP). These barrels have flooded the region with supply. With a 38-40 API, 0.2% sulfur Bakken is similar to WTI Midland. As a result, US crude exports averaged 9.338 million b/d ago, up 568,000 b/d since the end of 2016, according to the latest US Energy Information Administration report on exports.

Will the Gulf of Mexico Remain a Dumping Ground for Offshore Fracking Waste? -- As the Trump administration moves to gut Obama-era clean water protections nationwide, an environmental group is warning the U.S. Environmental Protection Agency (EPA) that its draft pollution discharge permit for offshore drilling platforms in the Gulf of Mexico violates clean water laws because it allows operators to dump fracking chemicals and large volumes of drilling wastewater directly into the Gulf . In a recent letter to the agency, the Center for Biological Diversity told the EPA that the dumping of drilling wastewater—which can contain fracking chemicals, drilling fluids and pollutants, such as heavy metals—directly into Gulf waters is unacceptable and prohibited under the Clean Water Act. Under current rules established by the Obama administration, offshore oil and gas platforms can discharge well-treatment chemicals and unlimited amounts of "produced waters" from undersea wells directly into the Gulf as long as operators perform toxicity tests a few times a year and monitor for "sheens" on the water's surface. About 75 billion gallons of produced water were dumped in the Gulf in 2014 alone, according to EPA records. Offshore fracking, which typically involves injecting water and chemicals at high pressure into undersea wells to improve the flow of oil and gas, has rapidly expanded in the Gulf of Mexico over the past decade. The latest draft of the pollution discharge permit, which was largely prepared under the Obama administration, would require drillers to collect information on the fracking chemicals they dump overboard. Regulators want to know what these chemicals are; their catalogue of offshore fracking chemicals has not been updated since 2001, despite advancements in technology. "It's absolutely appalling that EPA is letting oil companies dump fracking wastewater into the Gulf without any idea of the types of chemicals being discharged, or their effects on sea turtles, sturgeon or the other marine life that call Gulf waters home," said Kristen Monsell, an attorney for the Center for Biological Diversity, in an email to Truthout.

As Pruitt Guts Water Rules, EPA Will Allow Fracking Waste Dumping in the Gulf of Mexico: As the Trump administration moves to gut Obama-era clean water protections nationwide, an environmental group is warning the Environmental Protection Agency (EPA) that its draft pollution discharge permit for offshore drilling platforms in the Gulf of Mexico violates clean water laws because it allows operators to dump fracking chemicals and large volumes of drilling wastewater directly into the Gulf. In a recent letter to the agency, the Center for Biological Diversity told the EPA that the dumping of drilling wastewater -- which can contain fracking chemicals, drilling fluids and pollutants, such as heavy metals -- directly into Gulf waters is unacceptable and prohibited under the Clean Water Act. Under current rules established by the Obama administration, offshore oil and gas platforms can discharge well-treatment chemicals and unlimited amounts of "produced waters" from undersea wells directly into the Gulf as long as operators perform toxicity tests a few times a year and monitor for "sheens" on the water's surface. About 75 billion gallons of produced water were dumped in the Gulf in 2014 alone, according to EPA records.

The fossil fuels project that pits Trump’s base against itself --  For a landmark fossil-fuel program deep in Trump country, it’s not environmentalists who are the biggest threat. It may be Donald Trump himself. The $3.8 billion project in Lake Charles, Louisiana, would take waste from oil refining and turn it into synthetic natural gas while capturing emissions. Those products would be turned into high-value chemicals like methanol and hydrogen. Carbon dioxide, the greenhouse gas blamed for global warming, would be injected into the Earth to stimulate oil production. For the promoters, the project could spur 1,000 jobs, use General Electric Co.-licensed equipment and showcase cutting-edge machinery to help decarbonize oil. The catch: the technology isn’t broadly proven, so banks won’t yet finance it. That means there are few sources of project debt. The most obvious lender would be a U.S. Energy Department program that some Republicans are intent on neutering. The debate about whether the government should lend a hand in Lake Charles could divide Republicans as TransCanada Corp.’s Keystone XL pipeline did for President Barack Obama’s administration. It pits supporting companies, Republicans in Congress and Breitbart News Network LLC against the Tea Party and the Heritage Foundation, which oppose corporate handouts. “This will be their Keystone: Do you support job creation, or ideology?’’ said Brendan Bell, the former director of strategic initiatives at the Energy Department’s loan programs office. “There’s going to be a reckoning here.’’ 

Recent LOOP Sour rally evidence of persistent, global sour shortage -- The Louisiana Offshore Oil Port received no imports of Saudi Arabian or Iraqi crudes by the halfway point of July, evidence of the global sour crude shortage and competition for those barrels that has led to rising prices for regional grades such as LOOP Sour, which has increased in value by 60 cents/b over the past month alone, an analysis of Platts Analytics and S&P Global Platts data shows. Serving the Louisiana refining industry, LOOP is the only US deepwater port capable of receiving VLCC or larger tankers and typically ranks No. 3 for US ports that receive the most crude by water, behind Houston and Port Arthur, Texas. It is a bellwether for the regional crude supply-demand picture. By the halfway point of July though, LOOP had received no waterborne imports of crude from Iraq and Saudi Arabia. Compare that to January-June, when LOOP received an average of 5.9 million barrels per month of Iraqi crude and 6.5 million barrels of Saudi crude, according to a Platts analysis of US Customs data through July 13, the most-recent available. The global fight for medium sour barrels has picked up as OPEC and non-OPEC countries look for a way to bring up crude prices by limiting production. That global sour shortage has naturally resulted in higher prices in the US Gulf Coast region. On Monday, LOOP Sour, a blend of two domestic grades and three imported Middle East grades, was heard bid-ask at minus 35 cents/b by minus 30 cents/b to one of its five component crudes, Mars. It was assessed on the low end of that range, or cash West Texas Intermediate at Cushing, Oklahoma, minus $1.15/b. Platts LOOP Sour has risen 60 cents/b from mid-June compared with a 45 cents/b increase in Mars differentials and a 60 cents/b increase in Poseidon, according to Platts data..

Don't Call It a Comeback - It's Not Your Father's Haynesville Natural Gas Shale Play -- For the first time in six years, pipeline flow data show that natural gas production from Louisiana’s Haynesville Shale is rising. Additionally, rig counts and producers’ plans suggest more growth is on the way. Is the play poised to create a whole new crop of Bayou Billionaires?  Or is this a head fake that will only make us long for days of Haynesville past.  Well, it depends.  Because even though the Haynesville basin is looking up, it still faces some formidable challenges, from its geology to competition from other supply regions. Today, we continue our look at Haynesville’s prospects.We last wrote about the Haynesville Shale a couple of months ago in Part 1 of Don’t Call It a Comeback. At the time, we noted the bright neon signs indicating that the pure-gas play along the Texas-Louisiana border was attractive again — the ramping up of rig counts, the entrance of new Haynesville-dedicated operators in the region, and the increased drilling efficiencies being achieved. The only thing that was missing was, well, an actual increase in production volume from the region. By several accounts, it looked like a comeback. But production data was not reflecting that, at least not then. In the three months since, the evidence of a comeback has continued to pile up. Rig counts, which in mid-April 2017 were already up 200% to 37 total, from just 12 a year earlier, have climbed by another six rigs to 43 total, as of the July 14 Baker Hughes weekly rig count report. That means the rig count is nearly back to where it was in 2014, when Haynesville production was nearly 1.0 Bcf/d higher than it is now. Additionally, key operators like Goodrich Petroleum Corp., Chesapeake Energy and others in their first-quarter earnings calls affirmed plans to continue ramping up drilling in the region.

The Near-Term Potential for Permian Gas Takeaway Constraints -  Permian natural gas production is up nearly 40% over the past three years to 6.3 billion cubic feet/day (Bcf/d), and production could almost double to 12 Bcf/d by 2022. While there is 10.8 Bcf/d of existing gas takeaway capacity out of the Permian — suggesting that takeaway constraints are not imminent — much of the capacity to Mexico is not currently usable because of delays in related power-generation and pipeline projects south of the border. There also are limits to how much of the gas pipeline capacity from the Permian to California can be used for Permian takeaway, particularly during the off-season, when California can serve much of its incremental power load from hydro, solar and wind. The Midcontinent (Midcon) and Upper Midwest can only take so much Permian natural gas too; they’re taking gas from almost every direction. Put simply, takeaway constraints out of the Permian may be much closer than they appear. Today we consider existing natural gas takeaway capacity out of the Permian, how it compares with current and projected gas production in the region, and the potential for — and timing of — constraints that could reduce the prices that Permian producers receive for their gas.  In Part 1 of our series, we said that the pace of Permian hydrocarbon production growth will be influenced by many factors, including the degree to which the market price for crude oil exceeds the play’s breakeven prices and the ability of midstream companies to add incremental oil pipeline takeaway capacity as that capacity is needed. While the pursuit of crude oil is driving drilling and production activity in the Permian’s Midland, Central and Delaware basins, rapid growth in crude output is being accompanied by large volumes of associated gas and natural gas liquids (NGLs) that also must be dealt with. Fortunately, the Permian has been a major production area for decades — thus, a number of pipelines to transport crude, natural gas and NGLs are already in place. But the existing pipelines we discussed in Part 1 and Part 2 will not be enough, particularly if one of the more optimistic production-growth scenarios for the Permian were to play out.

Three sand producers building sand plants in West Texas --  Unimin Corp. announces plans to open a frac sand processing plant in West Texas with the hopes of supplying oil/gas drilling companies with frac sand from a local source, Chron reports. The sand plant is expected to be ready in early 2018 and will produce 5 million tons of sand per year. Unimin is the third company to begin construction of a major sand plant in the Permian Basin, as U.S. Silica and Hi-Crush Partners are also expected to open sand plants in early 2018. According to the news source, analysts expect half of next year’s sand demand to come from West Texas, where high demand and limited local supply has caused sand costs to rise for drillers. Having a local frac sand source will be cheaper than having to ship it by train from Wisconsin, or truck it in from 200 miles away.”There aren’t any sand mines in the Permian Basin, so, obviously, transportation costs will be much lower,” said Michael Lawson, a spokesman for U.S. Silica, which is investing $225 million in a sand plant that will produce 4 million tons of sand per year.

Pipelines in place for Niobrara / DJ Basin growth, but will it come? -- The rig count in the Niobrara Shale’s Denver-Julesburg (DJ) Basin has doubled in the past year, and crude oil production has been rebounding modestly in recent months. Most of the activity in the play is concentrated in super-hot Weld County, CO, where 23 of the DJ Basin’s 29 active rigs are set up. But with crude prices below $50/barrel, will the DJ make a real comeback, or will production sag again, just like it did after the big price declines of 2014-15? And what about Niobrara-related midstream infrastructure? Even some of the more optimistic forecasts leave the region with far more pipeline takeaway capacity than it needs. Today we consider recent developments in the Rocky Mountain region’s most important shale play and what they mean for exploration and production companies and midstreamers. The Niobrara Shale and its two subregions — the Denver-Julesburg Basin, centered in northeastern Colorado, and the Powder River Basin in eastern Wyoming — never attracted the national spotlight like the Bakken, the Eagle Ford and the Permian shale plays have in recent years. But the Rockies’ leading production area experienced noteworthy growth through the first half of the 2010s, especially in the DJ Basin. We tracked that growth in a number of blogs, beginning with Bananarama in the Rockies, in which we discussed the Niobrara’s decades-long history as conventional producer (using vertical wells), the region’s complex geology (which posed significant challenges for horizontal-drilling pioneers in the play) and the early successes that suggested the DJ may become a superstar. Then, in Hey Mr. DJ, Keep Playing That Song, Part 1 and Part 2, we looked at the challenges that rapid growth initially posed regarding takeaway capacity, in part because DJ (and Powder River Basin) output has historically had to compete for pipeline space with production traveling through the Rockies region from western Canada and North Dakota.

Letter said Colorado woman ‘could be held liable for drilling accidents if she didn’t sign,’ but…Under the headline “Facts vs. Fear,” The Greeley Tribune’s Tyler Silvy reports about a Weld County woman named Linda Warner who won’t lease her land to oil-and-gas companies, and the letters she gets from those companies. “Warner, a former environmental studies teacher at University Schools, is against fracking, but she did more research when the letters first started arriving in her mailbox,” the Tribune reports. “She met with companies, then returned to the same conclusion: She wouldn’t sell or lease, no matter what. ‘It’s an ethics issue for me,’ Warner said. ‘I just don’t want to do it.’ Then, in April, came a unique letter from Aztec Exploration, one offering her a ‘last chance’ to sell those rights — one that said she could be held liable for drilling accidents if she didn’t sign. The letter was technically true. ‘To me, it just seems crazy,’ Warner said. ‘You’re being held liable for something you’re personally opposed to.'”

'The Fight Is Not Over': Activist Building Solar Arrays to Block Keystone XL Route - When President Donald Trump signed off on a presidential permit okaying the Keystone XL crude oil pipeline in March, it was a real blow to an environmental movement that had tasted victory over the dirty tar sands clunker back in 2015 when President Obama withdrew the permit for the project.  With Trump and Canadian Prime Minister Justin Trudeau united in their support of the pipeline , it seemed little could stand in the way of some 830,000 barrels of dirty tar sands fuel barreling down a 36-inch crude oil pipe from Hardisty, Alberta through Montana, South Dakota and Nebraska to export terminals in the Gulf of Mexico. The pipeline seemed destined to pass over, under, and through environmentally sensitive areas such as Nebraska's Sandhills, and put at risk the Ogallala Aquifer, one of the world's largest underground freshwater sources. But not so fast.  Anti-pipeline activists are holding strong. They announced Solar XL, the latest move in a battle waged against the pipeline. Launched July 6 by a coalition of groups including Bold Nebraska, 350.org, Indigenous Environment Network and Oil Change International, the campaign features a series of solar panel arrays installed directly on the KXL pipeline route as it passes through Nebraska.   "TransCanada will have to literally dig up these solar arrays in order to build a polluting pipeline of the past that will pollute land and water, increase carbon emissions, and make climate change worse. The first project will be completed by the time the hearing in Lincoln starts in August." Each installation will cost $15,500 for a nine-panel frame, net-metering connection to the Nebraska power grid and labor. The groups aim to raise $50,000 via crowdfunding at the Action Network to help finance the installation in locations where landowners have refused to sell to TransCanada.

Big Victory in Fight to Protect California’s Coast From Offshore Fracking - A federal court on Friday rejected the Trump administration's effort to dismiss a lawsuit challenging the approval of fracking in federal waters off California. The suit—filed by the Center for Biological Diversity and Wishtoyo Foundation—notes that the government violated the National Environmental Policy Act and Endangered Species Act by failing to carefully study offshore fracking's risks before allowing this dangerous oil-extraction practice. The suit points to offshore fracking pollution's threats to the marine environment, public health, imperiled wildlife and sacred Chumash cultural resources and places. "This is a big victory in the fight to protect California's coast from offshore fracking's toxic chemicals," said Kristen Monsell, a Center for Biological Diversity attorney. "We're glad the court rejected the Trump administration's baseless attempt to dismiss efforts to force a hard look at offshore fracking's risks. The law clearly requires the feds to carefully study and reduce threats from offshore fracking, not blow them off so oil companies can keep using this hazardous process in fragile coastal environments." The Trump administration argued that the approval of offshore fracking and acidizing at all active oil and gas leases in the Pacific Ocean was not a final agency action reviewable by the court. In rejecting these arguments, the court noted that federal defendants' challenged decision allowed the use of offshore fracking and acidizing "without restriction" at all active leases in the Pacific Ocean.  Oil platforms in the Santa Barbara Channel have federal permission to annually dump up to nine billion gallons of produced water—including fracking chemicals—into the ocean. At least 10 fracking chemicals used in offshore fracking in California could kill or harm a broad variety of marine species, including sea otters and fish, Center for Biological Diversity scientists have found . The California Council on Science and Technology has identified some common fracking chemicals to be among the most toxic in the world to marine animals.

Federal judge tosses suit by Raging Grannies seeking to ban coal and oil trains through Spokane | The Spokesman-Review: The Raging Grannies’ attempts to stop coal and oil trains through Spokane has been derailed again. A federal judge on Monday issued his written opinion dismissing a federal lawsuit that was attempting to overturn a federal law, which the group of citizens has argued gets in the way of local governments that want to institute laws to address concerns over global warming and ensuring the rights of citizens to have a livable climate. The lawsuit brought by the Raging Grannies and others was filed after the group attempted through the initiative process to ban the trains. But U.S. District Court Judge Tom Rice found a laundry list of reasons to dismiss the suit that challenged the primacy of the Interstate Commerce Commission Termination Act of 1995. “First, of special import here, the federal law does not prohibit the passing of local laws” Rice wrote. “Rather, it may only pre-empt certain laws’ application.” Since the issue had no basis in law, it would have required Rice to issue an advisory opinion. “Accordingly, deciding the case now is not necessary and would not cause any significant hardship on” the Raging Grannies, Rice wrote. “Further, Plaintiffs could have attempted to circumvent the City Council by garnering support from five percent of the electorate, which would have placed the measure on the ballot regardless of any legal opinion.After failed attempts to get the issue before voters, the controversy culminated with the arrests of three women, all grandmothers, on Aug. 31, 2016. They were among about 20 protesters who blocked rail lines between Trent Avenue and Napa Street. “We were willing to be arrested to stop climate change,” Nancy Nelson, who dressed in a blue floral dress with a matching hat, told The Spokesman-Review at the time. “With the oil and coal trains coming right through our city, this is a very serious issue, which we have to address.” 

House budget could lead to Alaska refuge drilling | TheHill: The House GOP budget proposal released Tuesday could lead to oil and natural gas drilling being permitted in the Arctic National Wildlife Refuge (ANWR). The blueprint from the House Budget Committee for fiscal year 2018 asks the Natural Resources Committee to pass legislation to reduce the government’s deficit by $5 billion over 10 years. Democrats and environmentalists harshly criticized the blueprint, calling it a veiled attempt to clear the way for ANWR drilling since revenues from associated fees and royalties would help the government’s coffers. Rep. John Yarmuth (Ky.), the top Democrat on the Budget Committee, said that Democrats might propose an amendment to remove the ANWR provision. “We haven't talked about an amendment on that specific provision yet — we just found out about that earlier today — but that's something that we might consider,” he told reporters Tuesday. Greens also promised to put up a fight. “This is a shameless attempt to push an extremely unpopular action through the back door of Congress on behalf of President Trump and the oil lobby,” “We’re confident that Americans will see through this scam and once again demand that the Arctic Refuge remain protected. This refuge is a national treasure, and we have a moral obligation to protect it for future generations of Americans. It is simply too special to drill.” “Our homelands are under attack,” said Bernadette Demientieff, executive director of the steering committee for the Gwich’in people, native to Alaska and northwestern Canada. “The very existence and identity of the Gwich'in is under threat. The Arctic National Wildlife Refuge is a sacred place. We want to continue to live our cultural and traditional life with the Porcupine Caribou herd.” 

Coast Guard Makes Dire Warning About Drilling in the Arctic - Back in April, Trump signed an executive order to extend offshore oil and gas drilling to large parts of the Atlantic, Pacific and Arctic oceans .  "We're opening it up ... Today we're unleashing American energy and clearing the way for thousands and thousands of high-paying American energy jobs," Trump said as he signed the America-First Offshore Energy Strategy.  Then earlier this month, the Trump administration granted Italian oil company Eni the right to drill exploratory wells off the coast of Alaska. As InsideClimate News reported, "Eni's leases were exempt from Obama's ban because the leases are not new."  In response, Kristen Monsell, an attorney with the Center for Biological Diversity , said, "An oil spill here would do incredible damage, and it'd be impossible to clean up."  And now in a devastating, uncompromising rebuke to Trump and Zinke, the head of the U.S. Coast Guard has agreed with the Center for Biological Diversity: The U.S. cannot successfully clean up an oil spill in the Arctic. Admiral Paul Zukunft, who was the federal on-scene coordinator for the Deepwater Horizon oil spill, told a Washington symposium hosted by the U.S. Arctic Research Commission and NOAA that they would not recover all the oil if there was a spill in the Arctic.  7th Symposium on the Impacts of an Ice-Diminishing Arctic on Naval and Maritime Operations - YouTubeZukunft (his speech begins at 1:52) spoke to the Symposium on the Impacts of an Ice-Diminishing Arctic on Naval and Maritime Operations, warning about how climate change was changing the Arctic, with glaciers retreating and ice disappearing due to "polar acceleration." "You have got to understand what is happening to high latitudes," he said, before adding you have to see what is happening "first hand" and "how it is affecting the whole globe around us."  He then went on to talk about oil spills:  "I can assure you that if there is an oil spill, we're not going to recover all that oil. On the best of days, during the Deepwater Horizon cleanup, we maybe recovered 15 percent of that oil. And when I say recovered we burnt it, we dispersed it and it was flat calm and we had a fleet of over 6,000 ships out there doing recovery operations, and we had the infrastructure to support all of that."

U.S. Owns 700 Million Barrels of Oil. Trump Wants to Sell It - It started small. Just 412,000 barrels of Saudi Arabian light crude stashed in a Southeast Texas salt cavern. In the wake of the Arab oil embargo, which sent prices through the roof and forced Americans to ration gasoline, creating a national reserve seemed like an obvious way to protect U.S. consumers from global supply shocks. “It’s hard to imagine if you weren’t there,’’ said John Herrington, the Energy secretary under President Ronald Reagan, who pushed to expand the reserve in the 1980s. “We were lining up at gas stations. We were turning down our thermostats.’’ Forty years later, the world has changed, and Washington is torn on whether the Strategic Petroleum Reserve has outlived its usefulness. The U.S. is awash in crude, imports are declining, yet the stockpile remains the largest in world, ballooning to nearly 700 million barrels of crude, enough to offset U.S. production for more than two months, stored in some 60 caverns in Texas and Louisiana. In light of these changes, Herrington’s position has shifted. “I don’t see the need for a petroleum reserve now,’’ he said. Shrinking Reserves The government is far from united on the matter. The Energy Department this year kicked off a $2 billion, multiyear effort to upgrade the reserve and improve its ability to distribute oil during an emergency. President Donald Trump, on the other hand, wants to sell part of the reserve, a plan that lawmakers for now have ignored. So the hoard, and the salt caves, remain. The caverns themselves are a marvel. For all the disputation in Washington, the place is eerily quiet. At Bryan Mound, about 60 miles south of Houston, the salty breeze from the Gulf of Mexico rustles through knee-high sea grass. 

Schlumberger beats on N American drilling; sees global recovery - Times of India  - Schlumberger Ltd's quarterly profit and revenue beat analysts' estimates on Friday, driven by strong demand in North America, and the company said it was seeing recovery in its international markets. The Houston-based company's shares were up 1.5 percent at $68 in premarket trading. North American shale producers have been actively drilling in recent quarters, encouraged by a recovery in oil prices. Crude in the second quarter averaged $48.15 per barrel, a 5 percent gain over a year earlier, and companies added 506 onshore rigs in the past year, according to a closely watched Baker Hughes report. Schlumberger, the world's top oilfield services provider, said North America revenue surged nearly 27 percent to $2.20 billion in the second quarter ended June 30. Revenue from the region rose 18 percent from the preceding quarter. The company said U.S. onshore revenue soared 42 percent in the latest quarter from the preceding, as higher completion activity and improving pricing boosted hydraulic fracturing revenue. Schlumberger said it was also seeing more positive signs in the international markets with increases in activity and new project plans. The company is the first oilfield services provider to report results and sets the tone for the industry. Total revenue for the company rose 4.2 percent to $7.46 billion in the second quarter, beating the average analysts' estimate of $7.23 billion, according to Thomson Reuters I/B/E/S. Excluding items, the company earned 35 cents per share, above expectations of 30 cents. 

U.S. shale makes 'rapid' return, global oil market on the mend: Schlumberger | Fox Business: Schlumberger (SLB) said Friday it rapidly revived its idle oil-drilling equipment in North America during the second quarter, capitalizing on an oil recovery that carried the oilfield services provider to an earnings beat. Schlumberger’s revenue tied to U.S. hydraulic fracturing—or “fracking”—soared 68% over the first quarter. Overall, North American quarterly revenue was up 18%, or 27% versus last year, on strength in U.S. shale production. The company saw weakness in offshore drilling in the Gulf of Mexico, but U.S. land revenue grew 42% sequentially as the industry’s rig count improved 23%. Oil and natural gas producers flooded back to U.S. shale plays after oil prices returned to healthier levels. Energy firms have also managed to cut costs associated with the expensive process of hydraulic fracturing. Schlumberger noted that all of its U.S. land businesses were profitable in the second quarter, citing improved efficiency and higher pricing. Crude oil averaged $48.15 per barrel during the quarter, up 5% percent year-over-year. Schlumberger, the world’s largest provider of drilling equipment and software, expects international oil markets to follow North America’s lead. “While the activity outlook in North America for the second half of the year remains robust, we are now also seeing more positive signs in the international markets with increases in activity and new project plans starting to emerge in several GeoMarkets,” said Schlumberger Chairman and CEO Paal Kibsgaard. 

Rising US rig counts slow as oil prices remain below $50/b -- There are many contributing factors that are causing US oil prices to remain suppressed. Part of the reason is that petroleum inventories are not declining as quickly as some market participants had expected. Also, there are concerns that persistent production growth in the US will delay the market’s ability to balance. Additionally, production has rebounded in Libya and Nigeria, which has offset some of the efficacy of the OPEC-led production cut. As a result, WTI oil prices have been hovering around $47/b the past three months, reaching as low as $42.53/b on June 21, and we are starting to see some hesitation on the part of the US producer. Through the first five months of 2017 the US rig count grew by 45% (or 300 rigs), which equates to adding 60 rigs per month. Over the last month, however, the pace of growth has slowed dramatically — increasing only 4% (or 36 rigs), bringing the US total to 1,050 rigs for early July. If prices remain below $45/b, producers will most likely decrease drilling efforts because of internal rates of return below 20% (light blue bars below) for all plays except the Permian, according to the Platts Well Economic Analyzer. If a typical well within a play averages over a 20% return, it usually leads to a steady increase in new drilling activity within that play. To that point, if prices climb back over $50/b we could expect rig activity to grow since returns would rise above that 20% threshold (dark blue bars below) in the top oil-rich plays: the Permian, STACK, Denver-Julesburg, Eagle Ford and the Bakken.

US Shale Production Just Hit A New All Time High --One month ago, we reported that based on recent data, June oil output from shale producers would post the first double-digit production growth since July of 2015, when oil prices tumbled and a substantial portion of US production was briefly taken offline. While the final data has yet to be tabulated, it is safe to say that this is now the case. Indicatively, while over the past year total U.S. production was up roughly 525kb/d, virtually all of it, or 98.5%, was the result of horizontal rig production in the Permian Basin, where output rose by just over half a million barrels per day.  Also of note is that while US rig shows not signs of slowing yet, in its latest Weekly Oil Rig Monitor, Goldman predicted that $45/bbl is the price below which shale output would finally slow, although that price may also prove a substantial hurdle for many gulf budgets, whose all in cost of production - including mandatory and discretionary government outlays - is roughly the same if not higher. But what is more notable, is that according to the June EIA Drilling Prodctivity Report forecast, in July total shale (note: not total) basin output would rise by 127kb/d from May's 5.348mmb/d, and hit 5.475 mmb/d, surpassing the previous record of 5.46 mmb/d reached in March 2015. Today the EIA released its latest Drilling Productivity Report, and while the number is not official just yet, it is safe to say that as of July, the total US shale basin is producing a record amount of crude oil, which the EIA pegged at 5.472mmb/d, up almost exactly as predicted, and is expected to rise by a further 113kb/d in August to a new all time high of 5.585mmb/d.

US shale oil output to rise by 100,000 barrels a day in August: Oil production from several U.S. shale regions is expected to keep on rising in August, the U.S. Energy Information Administration forecast on Monday. The EIA's latest drilling productivity report projects that drillers operating the nation's shale oil fields will increase production by 113,000 barrels a day next month. Total output from these areas is expected to reach 5.59 million barrels a day in August. show chapters US shale rebound baked in for the rest of the year, could drag in 2018:  July's report marks the fifth straight month the agency's growth forecast came in above 100,000 barrels a day. The forecast is the latest sign that U.S. drillers continue to pump more even as benchmark U.S. West Texas Intermediate crude futures remain stuck in a range below $50 barrel. The Permian basin in Texas and New Mexico is once again projected to see the largest growth in August. EIA forecast drillers there will hike output by 64,000 barrels a day.  The Eagle Ford shale in eastern Texas has consistently come in second place. In August, EIA sees the region's production growing by 27,000 barrels a day.  Rocky Mountain drillers are expected to raise production by 15,000 barrels a day in the Niobrara region, contributing to a slow but steady recovery in Colorado's oil patch. North Dakota's Bakken will also see a bump of 4,000 barrels a day in August, EIA forecast.

 EIA: Major US onshore regions to add 113,000 b/d in August - Crude oil production from the seven major US onshore regions is projected to rise 113,000 b/d month-over-month in August to 5.585 million b/d, the US Energy Information Administration says in its Drilling Productivity Report. About 94% of the monthly increase is expected to come from the Permian, Eagle Ford, and Niobrara. The DPR also forecasts oil and gas output from the Bakken, Haynesville, Marcellus, and Utica, taking into consideration the regions’ total number of active drilling rigs, drilling productivity, and estimated changes in production from existing oil and gas wells.The Permian is forecast to gain 64,000 b/d month-over-month in August to 2.535 million b/d. In its July Short-Term Energy Outlook published last week, EIA projects the basin in 2018 to account for 30% of total US oil production, producing 2.9 million b/d by the end of that year. As of the week ended July 14, Baker Hughes’ count of active Permian rigs was 373, up 239 units since the basin’s modern low on May 13, 2016 (OGJ Online, July 14, 2017). EIA separately estimates the Permian’s tally of drilled but uncompleted (DUC) wells in June climbed by 130 month-over-month to 2,244.The Eagle Ford is expected to increase 27,000 b/d month-over-month in August to 1.387 million b/d. EIA’s July STEO expects the South Texas shale region in both 2017 and 2018 to average 1.3 million b/d as projected lower crude oil prices limit output growth.The Eagle Ford as of July 14 had 80 active rigs, an increase of 49 units since Oct. 14, 2016, according to Baker Hughes data. EIA’s DPR indicates the region’s DUC well count rose by 42 month-over-month in June to 1,406.The Niobrara is estimated to gain 15,000 b/d month-over-month in August to 480,000 b/d. Its DUC count in June edged up by 2 month-over-month to 663.Modest growth is forecast in August for the Bakken, up 4,000 b/d month-over-month to 1.043 million b/d. EIA expects Bakken output in 2017-18 to average 1.1 million b/d, according to the STEO. The region’s DUC tally in June rose by 8 month-over-month to 819. EIA projects August gas production from the seven regions to climb 837 MMcfd month-over-month to 52.858 bcfd. The Marcellus is expected to lead the way with a 201-MMcfd increase to 19.752 bcfd, followed by the Permian, up 160 MMcfd to 8.653 bcfd; Haynesville, up 142 MMcfd to 6.726 bcfd; Eagle Ford, up 112 MMcfd to 6.404 bcfd; Utica, up 104 MMcfd to 4.554 bcfd; and Bakken, up 20 MMcfd to 1.934 bcfd.

U.S. crude oil production forecast to average 9.9 million barrels per day in 2018 - EIA forecasts that total U.S. crude oil production will average 9.3 million barrels per day (b/d) in 2017, up 0.5 million b/d from 2016. In 2018, crude oil production is expected to reach an average of 9.9 million b/d, which would surpass the previous record of 9.6 million b/d set in 1970. Most of the growth in U.S. crude oil production from June 2017 through the end of next year is expected to come from tight rock formations within the Permian region in Texas and from the Federal Offshore Gulf of Mexico (GOM) (Figure 1). The Permian region is expected to produce 2.9 million b/d of crude oil by the end of 2018, about 0.5 million b/d above the estimated June 2017 production level, representing nearly 30% of total U.S. crude oil production in 2018. The Permian region predominately spans the Permian Basin of western Texas and southeastern New Mexico, covering 53 million acres. Within the Permian Basin are smaller sub-basins, including the Midland Basin and the Delaware Basin, all of which contain historically prolific non-tight formations as well as multiple prolific tight formations such as the Wolfcamp, Spraberry, and Bone Spring. With the large geographic area of the Permian region and stacked plays, operators can continue to drill through several tight oil layers and increase production even with sustained West Texas Intermediate (WTI) prices below $50 per barrel (b).  Based on EIA’s Drilling Productivity Report, productivity in the Permian, as measured by new-well oil production per rig in barrels per day, is forecast to decrease month-over-month for the 10th consecutive month in June (Figure 2). Output per rig is likely decreasing because operators are drilling more wells than they are completing. Completing a well is the process of casing, cementing, perforating, and hydraulically fracturing a well to make it ready for producing. When operators drill a well but do not complete it, the inventory of drilled but uncompleted wells (DUCs) increases, which tends to lower output per drilling rig. Oil flows only after a well is completed. The trend of operators drilling more wells than they are completing does not have a clear cause, but a widening of the WTI-Midland crude oil price discount to WTI-Cushing since the beginning of 2017 suggests the possibility of some minor transportation constraints. Lags in well completion may also reflect implementation of strategies that drill more wells from a single pad, with completion equipment not deployed until all wells are drilled.

Chart of the day: US oil production could hit a new all-time record high by September - According to new data released yesterday by the Energy Information Administration, US crude oil production last week increased to 9.43 million barrels per day, the highest output in two years going back to July 2015. There have only been ten previous weeks, all during the May to July 2015 period, that US crude oil production was higher than last week (based on EIA’s weekly oil output data that starts in 1983). At the current rate of production increases, US oil output could surpass the most recent post-shale revolution weekly peak of 9.61 million barrels per day set in June 2015 by mid-September of this year. Further increases could bring US oil production above 10 million barrels per day by February of next year for the first time since late 1970 (on a monthly basis, record US crude oil production was slightly above 10 million barrels per day in both October and November of 1970).  Peak what?

U.S. uncompleted well backlog hangs over oil market: Kemp (Reuters) - U.S. oil and gas exploration and production companies are drilling new wells faster than they can be fractured and hooked up to gathering systems, creating a growing backlog of drilled but uncompleted oil and gas wells.By June, the number of drilled but uncompleted oil and gas wells across the seven largest shale plays had topped 6,000, according to estimates from the U.S. Energy Information Administration.The estimated number of uncompleted wells across the seven plays has risen by more 1,000 since December 2016, the agency reported on Monday ("Drilling productivity report", EIA, July 2017).The problem is concentrated in the Permian Basin of Texas and New Mexico, where the number of uncompleted wells has risen by more than 800 since December and more than 1,000 since June 2016.In most other shale plays, the estimated number of drilled but uncompleted wells has been broadly stable over the last year (http://tmsnrt.rs/2tBi32e).There are now almost 2,250 uncompleted wells in the Permian, up from an estimated 1,200 a year ago, and compared with 3,800 across all the other plays combined.Since the Permian has accounted for more than 40 percent of the extra drilling rigs deployed countrywide over the last year, the concentration of uncompleted wells in the region is not surprising.But the growing number of uncompleted wells represents an obvious imbalance and is ultimately unsustainable, so either the number of new wells drilled must slow or the completion rate must increase (http://tmsnrt.rs/2uDTreh).The lengthening backlog mostly reflects the shortage of fracking and completion crews, though in a few cases it may reflect a strategic decision to delay bringing wells onstream to wait for higher prices. However, drilling is expensive, using up corporate cash, and wells do not start earning a return until they start flowing, so in most cases there is an incentive to flow them as soon as practical.

U.S. gasoline surplus eliminated by trade flows: Kemp (Reuters) - The U.S. gasoline surplus has disappeared thanks to a sharp drop in prices which has caused imports from Europe to slow and exports to Latin America and other markets to accelerate since the start of June. U.S. refineries are processing record volumes of crude while domestic gasoline consumption appears to be holding steady at the same level as 2016, threatening to flood the market with excess fuel. But low domestic gasoline prices at the start of the summer driving season have encouraged the diversion of tanker shipments from Europe and incentivised U.S. refiners to boost their own exports. The United States was a small net exporter of gasoline in the four weeks to July 14, compared with net imports of 450,000 barrels per day (bpd) at the same point in 2016 and 411,000 bpd in 2015. U.S. gasoline imports are running around 240,000 bpd below year-ago levels, while exports are up by almost 230,000 bpd, according to data from the U.S. Energy Information Administration (http://tmsnrt.rs/2ueeZwN). The shift in the net trade position helped clear excess inventories that built up earlier in the year and had been weighing on gasoline prices. On June 9, U.S. refiners, importers and fuel blenders reported gasoline stocks of 242 million barrels, almost 5 million barrels higher than in 2016 and 28 million barrels over the 10-year average. Stocks were equivalent to around 26 days of implied domestic consumption compared with 25 days at the same point in 2016. By July 14, five weeks later, stocks had fallen to 231 million barrels, almost 10 million barrels below 2016 levels and only 15 million barrels above the 10-year average. Gasoline stocks had been reduced to just 24 days of implied domestic consumption compared with almost 25 in 2016. Aided by lower prices, the United States has traded its way out of an impending gasoline glut with increased exports to markets in Latin America and European shipments diverted to West Africa and Latin America.

Oil Giants Make a Play For Millennial Hires - Oil, in short, is cool, the industry’s branding braintrust has declared. The 30-second spot rolled out this year is part of a broader American Petroleum Institute campaign  to “raise awareness about the role natural gas and oil has in economic growth, job creation, environmental stewardship, and national security.” Dubbed Power Past Impossible, the ads by the lobbying arm of America’s oil giants are all about millennials, the generation of roughly 21 to 35 year olds which out-sizes any other and makes up the largest chunk of the American workforce.  “It’s a shift in our messaging and our target that’s been in the works for several years,” says Marty Durbin, the institute’s chief strategy officer. “There isn’t a company out there that isn’t chasing the elusive millennials.” That may be true, but there are few with the kind of uphill battle the oil industry faces in catching them. Millennials often frown on companies whose main products play a key role in global warming. A 2016 poll by the University of Texas found that 91 percent of those under the age of 35 said climate change is occurring and just over half supported a carbon tax. About two thirds of millennial-aged voters said energy issues influenced how they vote and that they plan to by an alternative fuel vehicle.  “What exactly were you guys thinking making a commercial aimed at young people,” tweeted one viewer. “Every time I see it I’m reminded of how [expletive] of a resource petroleum is ecologically and how dumb it was to advertise ... that way.”

"Dirty, Difficult, And Dangerous": Why Millennials Won't Work In Oil  -- Like many industries today, the oil industry is trying to sell its many job opportunities to the fastest growing portion of the global workforce: Millennials. But unlike any other industry, oil and gas is facing more challenges in persuading the environmentally-conscious Millennials that oil is “cool”.  During the Super Bowl earlier this year, the American Petroleum Institute (API) launched an ad geared toward Millennials, who now make up the largest generation in the U.S. labor force.  Despite its pitch to speak the Millennials’ language and reach out to the elusive generation, the ad sparked anger with many consumers and viewers. Millennials continue to have the most negative opinion toward the oil industry compared to all other industries, and they don’t see a career in oil and gas as their top choice of a workplace. The oil industry’s talent scouting and recruiting methods of the past are failing to reach Millennials, who want their work to have a positive impact on society, various studies and polls have found—a rather big ask for the oil industry. This failure to reach the group that makes up the largest portion of today’s workforce—which now surpasses Generation X—points to a huge problem for the oil sector, as Baby Boomers move into retirement in droves. Not only are Millennials snubbing oil and gas because of its negative image, they also seek different job perks than previous generations sought, and in this regard, the oil industry will need to do more as it becomes increasingly obvious that Millennials want different things than what oil executives think they want. A total of 14 percent of Millennials say they would not want to work in the oil and gas industry because of its negative image—the highest percentage of any industry, McKinsey said in September 2016.

US crude exports are the gift that keeps on giving -- The Trump administration is looking to expand drilling in federal waters in the Gulf of Mexico, Atlantic, Arctic and even the Pacific oceans. To learn more about the prospects of expanded offshore oil and gas production, senior oil editor Brian Scheid and Gary Gentile, chief editor of Platts Oilgram News, talk with Randall Luthi, president of the National Ocean Industries Association and head of the US Minerals Management Service during the George W. Bush Administration. Luthi talks about why the industry may be most focused on drilling in the mid- and south Atlantic than anywhere, why the five-year leasing plan should be ditched for a long-term, “generational” offshore plan and why royalty rates for oil and gas production need reform.

Could US sour crude oil be exported to Europe at the expense of other grades? (video) Calculations point toward a chance for US sour crude oil grades like Mars and Southern Green Canyon to find a market in Northwest Europe, where they could potentially displace OPEC or Russian barrels. James Bambino, who has been tracking crude and refined oil product flows, crunches the numbers and considers Europe's Urals market, freight rates, refinery runs along the US Gulf Coast, demand and capacity. How long could the opportunity last, and will the market take advantage of it?

US on course to become world’s largest exporter of natural gas - The United States is challenging Australia and Qatar as the world's largest exporter of natural gas, according to a new report by the International Energy Agency.  Global gas demand is expected to grow by 1.6 percent a year for the next five years, with consumption on track to hit almost 4,000 billion cubic meters by 2022. China is projected to account for almost 40 percent of growth. "The U.S. shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies," IEA Executive Director Fatih Birol said in a statement Thursday. The Asia Vision LNG carrier ship at the Cheniere Energy terminal in this aerial photograph taken over Sabine Pass, Texas, Feb. 24, 2016"Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world," Birol added.The U.S. is already the world's largest producer of natural gas. The IEA estimated that by 2022 the country's production will be 890 bcm, more than a fifth of global gas output.The IEA said the United States will challenge Qatar and Australia as the highest exporter by 2022 with more than half of the natural gas produced to be converted to liquefied natural gas for export. In a bid to increase export demand, three major LNG terminals under construction on the Texan coast will double the number of U.S. ports currently in use. Future demand will be driven by the industrial sector, according to the IEA, as its traditional use in power generation is trimmed by a growing mix of renewables and coal.  The report added that increased liquefaction capacity is coming into a market already well supplied, and the glut is driving down prices to interest new countries such as Pakistan, Thailand and Jordan

Natural Gas Prices Up Slighting After Lower Than Expected Storage Build -- Working gas in underground storage in the Lower 48 states increased by 28 billion cubic feet (Bcf) in the week to July 14, the EIA said on Thursday, but the build was less than analysts had expected, sending natural gas prices higher.At 12:54pm on Thursday, natural gas futures for delivery in August were up 0.59 percent at US$3.084/MMBtu.  Analysts had expected a build of 32 billion Bcf.As of July 14, working gas in storage was 2,973 Bcf, the EIA has estimated. At the end of last week, stocks were 299 Bcf less than this time last year and 141 Bcf above the five-year average of 2,832 Bcf. At 2,973 Bcf, total working gas is within the five-year historical range, the EIA noted.    In the week to July 7, working gas in underground storage had increased from 2,888 Bcf to 2,945 Bcf. U.S. demand for natural gas is expected to be high to very high for the week ahead, with the weather forecasts pointing to hot weather in most parts of the United States.   Natural gas inventories reached a record high of 4,047 Bcf on November 11, 2016, and inventories ended the winter heating season at 2,072 Bcf in March 2017, the EIA said in its latest Short-Term Energy Outlook. Inventory builds have been slightly below average thus far during the injection season, and EIA expects inventories to be 3,940 Bcf at the end of October 2017, which would be 2 percent higher than the five-year average level for the end of October, but 2 percent lower than the 2016 end-of-October level.

Paradoxes blur path forward for plentiful, cheap US natural gas -- Global natural gas supplies are abundant enough to keep the fuel in use for the next two centuries, but how the gas industry handles the paradoxes confronting the sector will determine the resource's path forward in the US, an executive with Anadarko Petroleum said Monday. Scott Moore, chairman of the Natural Gas Supply Association, said being a 32-year veteran of the industry has taught him that the more he knows, the less he understands about what is really going on. "I find that we live in a world of paradox and that we lead through paradox,"   Among the paradoxes of natural gas leadership is that "change is constant," he said. The industry underwent a radical change brought on by disruptive technology, primarily hydraulic fracturing and horizontal directional drilling, that had an economic and political impact on the world, allowing the US to re-establish itself as a global leader in the space and reshape geopolitical influence, Moore said. Aided by fracking, there is believed to be 27,000 Tcf of gas that can be economically recovered, a figure that could easily increase with new technological developments and if areas like the Middle East or Russia were to pursue unconventional gas sources, something they have not bothered to do given their abundance of conventional gas, Paul Greenwood, vice president of Americas and new markets for ExxonMobil Gas and Power Marketing, said during the panel. By comparison, the US consumed just under 30 Tcf of gas in 2015, and the world's total gas production on an average basis that year was 350 Bcf/d. With such a small percentage of available resources actually produced, the world can expect to enjoy about 215 years of gas supplies at current consumption levels, Greenwood said.

The Rapidly Expanding Global Liquefied Natural Gas Market - The global LNG (liquefied natural gas) market is expanding by 4-6% per year, compared to around 1-2% for overall gas consumption. LNG accounts for a rising 12% of all gas demand, increasingly vital because LNG is the fastest growing way to trade gas. And gas is the only fossil fuel that increases in use even under the most stringent environmental policies, where the world’s nations incorporate policies to keep the global temperature increase below 2 degrees Celsius (3.6 degrees Fahrenheit) by 2050. In short, the more we try to reduce greenhouse gas emissions, the more gas we will consume. Gas emits just 50% the CO2 that coal does and 30% of the CO2 emitted by petroleum. Global LNG demand is now around 265 million tonnes per annum (Mtpa), or 35 Bcf/d. And there is a current global glut that is widely expected to dissipate early in the next decade. It’s LNG that is evolving natural gas into a global commodity like petroleum. The U.S. hub-priced gas system is preferable because it’s based on the transparent fundamentals of supply and demand. Others need to use the same market forces to find a price level for natural gas versus its competitors.

Platts JKM LNG Weekly: September JKM at $5.60/MMBtu on stronger summer demand -- S&P Global Platts assessed the September Platts JKMTM, the new front month, at $5.60/MMBtu Friday, as stronger seasonal demand from Northeast Asia end-users injected some price support. Higher-than-average summer temperatures over July to August were seen as the main reason for the sudden spot buying interest from Japan and South Korea, sources said. Earlier in the week, sell tenders from PNG LNG for mid-September delivery and ExxonMobil for late-July-to-early-August delivery were heard to be done at $5.50-$5.60/MMBtu. The latest sell tender issued Thursday is by Angola LNG for a cargo loading between August 31 and September 2, market sources said. Japan's Tohoku Electric issued a single cargo buy tender for H2 September delivery, according to several market sources. The deadline for bid submissions was heard to be July 25. Kansai Electric also issued a buy tender for H2 August-H1 September delivery cargo, which closes Tuesday and will be valid till Thursday. According to market sources, the tender was not awarded Friday. Despite the hotter weather, there were no South Korean end-users active in the market during the week as LNG stock levels remained sufficient in the country. The heavy restocking conducted last month has built up more than enough storage to last till the end of summer, according to sources. Meanwhile, Taiwan's CPC was also heard issuing a two-cargo tender for August and September deliveries, which closed Monday this week. On the other hand, India's LNG demand was subdued due to weaker domestic power production.

What If Big Oil’s Bet on Gas Is Wrong? -  Talk to a Big Oil executive these days, and the chances are they’ll steer the conversation toward gas. “In 20 years, we will not be known as oil and gas companies, but as gas and oil companies,” Patrick Pouyanne, chief executive officer of French giant Total SA, told a conference in St. Petersburg last month. Pouyanne and his peers have pitched the fuel as a bridge between a fossil-fuel past and a carbon-free future. Gas emits less pollution than oil and can be burned to produce the power that grids will need for electric cars. But with the cost of renewable technologies falling sharply, some are warning that the outlook may not be so rosy. Forecasters are beginning to talk about peak gas demand, spurred by the growth of alternative power supplies, in the same breath as peak oil consumption, caused by the gradual demise of the internal combustion engine. In a long-term outlook published last month, Bloomberg New Energy Finance predicted that gas’s market share in global power generation will drop from 23 percent last year to 16 percent by 2040, and that gas-fired power generation capacity will start to decline after 2031. BP Plc has highlighted “risks to gas demand” as a key uncertainty, including the possibility that consumption plateaus by 2035, “squeezed out by non-fossil fuels.” If those forecasts play out, it has huge implications for Total, BP and other oil majors already grappling with a possible surge in electric car use. Gas-exporting nations most notably Russia, Qatar and Australia will also be exposed. The global gas industry, based on multi-billion dollar pipelines and export plants, has decades long investment cycles and decisions being made today rely on rising demand until the middle of the century. 

Fracking could begin in London after ‘multi-million’ pound natural gas find -- An energy company today claimed to have identified natural gas “worth millions” under an industrial estate in London, raising the prospect of the capital’s first fracking operation.   London Local Energy believes there are oil and gas deposits below Artesian Close Industrial Estate in Willesden. It now wants a Petroleum Exploration and Development Licence from regulator the Oil and Gas Authority to drill underground. LLE chief executive Nick Grealy and four geologists came up with the theory that oil and gas are at the location after researching the discovery of oil at Stonebridge Park in 1912. The company believes this deposit, 1,700ft down, could be more effectively explored and extracted with modern equipment — and could potentially meet 12 per cent of London’s energy needs and save 1.7 million tonnes in carbon dioxide emissions. Mr Grealy, 63, today urged the OGA to open up another round of PEDL bids. More than 100 licences have been issued but at present there is no date for a new round of bids.

United anti-fracking protest shuts Lancashire site - About 200 anti-fracking activists and trade unionists blocked the entrance to the Preston New Road Cuadrilla site in Lancashire last Friday. It was part of a day of action for trade unionists against fracking. Convoys of cars from Lancaster and a coach of protesters from Manchester joined with the local people who protest on a daily basis. Three Lancashire trades councils were represented from Preston, Blackpool and Lancaster. Speakers from the NUT, Unite, Unison, PCS and UCU unions addressed the protest that shut the site for the day. Ricardo, a student at Lancaster university, said, “Bit by bit they make our lives worse, taking away our rights and worsening our conditions. You have to fight it from the start.” Margaret Jones from Lancaster and Morecambe TUC told Socialist Worker, “I am absolutely opposed to fracking. Direct action is the only way to stop it.” Sally Laver from Lancaster and Morecambe Pensioners Action Group said, “This is important for everyone as we hope more people live to become pensioners. “This is less likely with climate change, fracking and continued burning of fossil fuels. It is important we keep the protest going with mass demonstrations every week.”

Tensions rise at fracking site in UK after police and activists clashes -- Tensions at Britain’s most high-profile fracking site have risen after an increase in violent clashes between protesters, security guards and police. One demonstrator said she had been left unconscious after a “pretty brutal” scuffle with security officers on Wednesday, and another activist fell from his wheelchair, the same day, when police officers pulled him out of the way of a 40-tonne lorry.   Both protesters said they planned to report the incidents that had occurred at energy firm Cuadrilla’s Preston New Road site, near Blackpool, to Lancashire police. The skirmishes came as anti-fracking activists and Cuadrilla accused each other of “increased aggressive” acts in the years-long battle over the 1.5-hectare (3.8-acre) plot near Little Plumpton, one of the firm’s sites for shale gas exploration.Hundreds of protesters have demonstrated outside the site since last October, when the government overruled Lancashire county council and gave Cuadrilla the green light to begin drilling.  Scuffles between protesters and security guards increased from the start of July as activists marked what they call a month of “rolling resistance”. Katrine Lawrie, 39, said she was knocked unconscious and taken to hospital on Wednesday after allegedly being pushed by a security guard as she tried to protect other protesters carrying out a “lock-on” with objects constructed from plastic, bitumen and concrete. “They’ve been getting increasingly more violent and aggressive over the last few weeks and every day it seems the aggression and violence seems to ramp up. It’s outright assault,” she said. Hours later footage circulated online showed another activist, Nick Sheldrick, a former naval officer, being tipped backwards from his wheelchair as police tried to move him away from an approaching haulage truck.

IEA, DOE leaders see Mexico’s global energy role growing quickly -- Mexico is poised to become an increasingly important global oil and gas supplier as reforms take hold and foreign participation grows, International Energy Agency and US Department of Energy leaders agreed during a joint press conference on July 18.“Mexico’s change in its constitution helped its oil investments double in 2016 when an expected rebound did not occur and global oil investment declined for the first time in years,” IEA Executive Director Fatih Birol said, citing a recent IEA report (OGJ Online, July 11, 2017). “That’s good news for North America’s energy future.”US Energy Sec. Rick Perry observed, “History teaches us that the world is not stagnant. Mexico had one of its biggest natural gas discoveries in history last week. I’ve just returned from talks with government leaders there, and I believe Mexico will become an even bigger oil and gas supplier as we go about building this new North American energy partnership.”Birol said IEA expects the US shale revolution to get a second wind and increase its gas production to 40% of the world’s total by 2022 (OGJ Online, July 14, 2017). IEA also projects that the US will become one of the world’s three largest LNG exporters—alongside Australia and Qatar—and give LNG a majority share of the global gas market for the first time by 2040, he said.“North America is entering a golden age of energy prosperity,” said Birol, adding that Mexico looks as if could be more than a junior partner. The country is on track to become a full IEA member by yearend, he said. Perry said one of DOE’s priorities will be to streamline its gas export approval process. Sales to customers in countries having a free-trade agreement with the US are presumed to be in the US national interest. DOE determines whether that is the case in proposed sales to customers in non-FTA countries.

U.S. May Halt Oil Imports From Venezuela --The Trump administration is mulling over sanctions against senior Venezuelan government officials, and additional measures could include sanctions against the country’s oil industry, such as halting imports into the U.S., according to senior Washington officials who spoke to media.  The goal of the sanctions is to prevent the Nicolas Maduro government from having things its way at a July 30 election for a Constituent Assembly that, the U.S. administration believes, would serve to cement Maduro’s power and turn Venezuela into a “full dictatorship.”The Constitutional Assembly vote was proposed by the government as a means of tackling the political crisis that Venezuela slid into last year, after the election of a new parliament where the opposition had a majority that put it at odds with the government. A Constituent Assembly can rewrite the country’s constitution, and many observers see the move as an attempt to strengthen the current regime’s hold on power. Russian Sputnik quoted Venezuela’s Foreign Minister Samuel Moncada as saying Venezuela will reconsider its relations with the U.S. should Washington go ahead with the sanctions, which, for the time being, seem to target two senior government officials: Defense Minister Vladimir Padrino Lopez and the second most senior figure in the ruling Socialist Party, Diosdado Cabello. The allegations against them are for rights violations.Venezuela is the third-largest oil exporter to the US, with the daily rate of imports for the week to July 7 at 823,000 barrels, according to the EIA, about 30,000 bpd less than Saudi Arabia’s daily exports to the U.S.

Factbox: Impacts of US sanctions on Venezuelan oil - The Trump administration is considering major sanctions on Venezuelan oil exports into the US, a policy move which could exacerbate the current heavy crude supply tightness, and cause a months-long dip in US refining margins. A senior administration official said this week that a ban on Venezuelan imports was one of the options being considered, but views on the practicality and effectiveness of such a ban remain divided with the administration.While specifics remain largely unclear, here's a look at the issues at play, the possible sanctions routes the White House is considering and the expected impacts: A senior administration official said these actions may be imposed before July 30 and that "all options are on the table." Analysts expect that the Trump administration will likely focus on sanctions targeting individuals, at least initially, but said the most effective sanctions would likely target petroleum exports considering that energy accounts for roughly 95% of Venezuela's export economy. The impact on US refiners will depend on how quickly the potential sanctions are put into place and how broadly they are imposed, according to Rick Joswick, managing director for oil with the PIRA Energy Group, a unit of S&P Global Platts. If, for example, the administration announces it will impose a $2 to $3/b duty of Venezuelan imports within three to six months, "then people will adapt," Joswick said. If the administration imposes a full ban on Venezuelan crude on August 1, the impact will be much more severe, he said. If Venezuelan oil sanctions were imposed US refiners, particularly along the Gulf of Mexico, would need to find new sources of heavy crude. While the US now imports about half of the amount of Venezuelan crude than it did 20 years ago, Venezuela remains a key supplier of the US Gulf refining market. At 795,000 b/d, Venezuela was the single largest supplier of imported crude into the USGC in April, according to the US Energy Information Administration, followed by Saudi Arabia at 714,000 b/d.The Phillips 66 Sweeny Refinery in Old Ocean, Texas, imported nearly 46.2 million barrels of Venezuelan crude in 2016, the most of any US refinery last year, according to the EIA. Citgo's Lake Charles, Louisiana, refinery took in the second-most with nearly 44.7 million barrels of Venezuelan crude in 2016, according to the EIA. Citgo is owned by PDVSA. In total, 13 US refineries imported Venezuelan crude in 2016, according to the EIA.

Exclusive: Russia, Venezuela discuss Citgo collateral deal to avoid U.S. sanctions - sources | Reuters: (Reuters) - Russia's top oil producer Rosneft is negotiating to swap its collateral in Venezuelan-owned, U.S.-based refiner Citgo for oilfield stakes and a fuel supply deal - a move to avoid complications from U.S. sanctions, two sources with knowledge of the negotiations told Reuters. State-owned Rosneft holds a 49.9 percent stake in Citgo as collateral for a loan last year of about $1.5 billion to the OPEC nation, which is reeling from low oil prices and a severe recession. The arrangement with Venezuela's state-owned oil firm, PDVSA, has drawn fire from U.S. senators who do not want Russia in a position to own a substantial stake of U.S.-based energy assets in potential violation of existing economic sanctions. The negotiations took on more urgency this week, one of the sources told Reuters, when U.S. President Donald Trump threatened to impose "strong economic actions" on Venezuela unless embattled leftist President Nicolas Maduro aborts plans to establish a new legislature with powers to rewrite the nation's constitution. Such sanctions, which could include a ban on U.S. oil imports from Venezuela, could undermine Citgo's business model and threaten Venezuelan or Russian ownership of the U.S-based firm in the long term. Under a new proposal being discussed this week in Moscow by top executives from Rosneft and PDVSA, the collateral stake in Citgo would be exchanged for a package of eight key deals, one of the sources with knowledge of the talks said.

US Said to Stymie Japan's Plan to Explore for Russian Oil | Rigzone A Japanese group’s plans to explore for Russian oil with state-run Rosneft have been stymied by U.S. intervention over sanctions, according to people familiar with the matter. Washington’s objection to the Japanese project to explore for oil in the ocean off Russia’s Far East shows the U.S. Treasury is maintaining a firm line on sanctions, even as some international companies press on with Russian energy deals. In April, the U.S. turned down a request from Exxon Mobil Corp. for a waiver to allow it to drill with Rosneft in the Black Sea. Rosneft signed a preliminary deal with a Japanese consortium of Japan Oil, Gas & Metals National Corp., known as Jogmec, Inpex Corp., and Marubeni Corp. for offshore exploration at a license to the south west of Sakhalin Island in December, one of more than 60 agreements and memorandums signed during Russian President Vladimir Putin’s visit to Japan. However, since then the U.S. government has objected to the project, according to two people familiar with the discussions who asked not to be identified discussing a sensitive matter.

Libya and Nigeria exempt from OPEC cuts, but not from speculation over their futures - OPEC Outlook Podcast - Speculation has begun to swirl about how OPEC and its 10 non-OPEC partners in their production cut agreement will handle the resurgence of Libya and Nigeria, whom they had exempted from the deal due to civil strife. The combined output of Libya and Nigeria in June was nearly 400,000 b/d above where it was in October, the benchmark month from which OPEC determined its cuts, and the prospects of further recovery in July seem likely. Senior writer and OPEC specialist Herman Wang previews the upcoming July 24 meeting of the OPEC/non-OPEC monitoring committee overseeing the deal, which is sure to discuss the two exempt countries, even as their oil ministers appear likely to decline invitations to attend. The episode also examines OPEC’s engagement with US shale companies, with Secretary General Mohammed Barkindo saying at the World Petroleum Congress in Istanbul last week that he planned to have further meetings with them to gain a better understanding of how they are responding to market signals. And the podcast’s Get to Know an OPEC Member segment features founding member Venezuela, which has seen its output steadily decline and is now facing an economic, political and humanitarian crisis. Francisco Monaldi, a fellow in Latin American Energy Policy at the Baker Institute for Public Policy at Rice University, joins the podcast to discuss Venezuela’s oil outlook.

Kazakhstan Bows Out Of OPEC Deal --Kazakhstan is, as expected, bracing to drift away from its role in the OPEC oil production cap in the coming two months. Energy Minister Kanat Bozumbayev said at an industry conference in Istanbul over the weekend that Kazakhstan’s withdrawal from its pledge to the cap will take place gradually, Russian news agency TASS reported.Last November, members of OPEC and other oil-producing nations thrashed out an agreement to collectively reduce their daily output by 1.8 million barrels as compared to production in late 2016. The same countries later agreed to extend the deadline for that cap to March 2018 in a desperate bid to prop up prices.Asked if Kazakhstan would be prepared to consider a further extension during OPEC talks in November, Bozumbayev was evasive, answering only that “this is a question for November.”But the data on Kazakhstan so far shows Astana never really had its heart in it, and Bozumbayev even admitted the country’s oil output for 2017 will outshoot the previous projected volume of 81 million tons (around 578 million barrels). Quite how strictly Kazakhstan has abided by its OPEC obligations depends what and how one is counting. In March, an International Energy Agency report suggested that far from cutting output by 20,000 barrels daily, as pledged, Kazakhstan had actually jacked up output.

Ecuador Breaks Ranks With OPEC and Increases Oil Output - Ecuador has dealt a blow to OPEC unity by announcing it will start raising oil production this month, arguing it needs the money. OPEC has for years cheated on its own agreements, particularly when oil prices fail to recover after an output cut. But Ecuador has taken the rare step of saying publicly it will increase production, making it impossible for the group to conceal the desertion. The Latin American country won’t be able to meet its commitment to lower output by 26,000 barrels a day to 522,000 a day, as agreed with OPEC last year, Oil Minister Carlos Perez said in an interview with Teleamazonas late Monday. “There’s a need for funds for the fiscal treasury, hence we’ve taken the decision to gradually increase output,” Perez said. “What Ecuador does or doesn’t do has no major impact on OPEC output.” Indeed, Ecuador’s exit is largely immaterial when considering the size of the global oil market, as the amount it agreed to cut accounts for less than 25 seconds of daily consumption. Still, it does create a dangerous precedent in the Organization of Petroleum Exporting Countries, opening the door for other, perhaps bigger producers to follow suit. “Ecuador’s latest statement will not matter for global balances but it shows the challenges for OPEC members given the cuts failed to raise prices,” 

 OPEC Deal Splinters: Ecuador Will No Longer Comply With Production Quota Due To "Difficult Economic Situation" -- Ever since the OPEC production cut deal was announced last year in Vienna, there have been two key wildcards fascinating the oil trader and analyst community: what would be the deal compliance (in other words, how pervasive would cheating be), and which country would break away from the deal first. When it comes to the former, after an impressive run in which compliance hit and in some months surpassed 100%, mostly due to Saudi Arabia shouldering the extra production cut burden, in June it finally slid back to 92%, the lowest in months, and the first indication that the recent Saudi rising production is starting to weigh on the cartel members who are growing concerned that the Saudi commitment to production cuts may be waning. As for the first country to defect, the odds were always highest on Venezuela, however as of today that has turned out to be a losing wager because as Argus reported, Ecuador's oil minister said the cash-strapped country faces a "difficult economic situation" and is no longer able to comply with its pledge to Opec to cut 26,000 b/d of oil production. Today's announcement comes after the small Latin American nation had strictly followed the quota set by the Vienna deal, and from January to May Ecuador reduced its output by some 16,000 b/d. However, that ended today, when oil minister Carlos Perez said today the country is no longer complying with the quota because of its fiscal challenges.  These include a public debt close to 50% of gross domestic product and an expected 7.5% fiscal deficit for the year.

Ecuador Abandons The OPEC Deal: Who’s Next? -- Ecuador announced its withdrawal from the OPEC agreement this week, a move that could shake the foundation of a deal that was already starting to show some cracks."We need funds for the fiscal treasury and for that reason we've taken the decision to gradually increase production,” Ecuadorian oil minister Carlos Perez said, according to Reuters. Ecuador is running a fiscal deficit equivalent to 7.5 percent of GDP. Low oil prices are really hurting government finances, and production restrictions only add to the pain. With oil prices having posted few gains from the deal since it was implemented at the start of the year, Ecuador decided enough was enough. It needs to produce as much as possible. Ecuador, by any measure, is not a massive oil producer. The Andean nation produced just 527,000 bpd in June, making it the third smallest OPEC producer after Equatorial Guinea and Gabon. As a small producer, its contribution to the original OPEC deal agreed to last November was also relatively minor. Ecuador pledged to cut a rather miniscule 26,000 bpd as part of the deal, an afterthought in a 97 million barrel-per-day oil market. After all, the EIA’s data on shale production bounces up or down by more than that on a weekly basis In any case, Ecuador was not even fully complying with its cuts – it had only actually throttled back on output by about 16,000 bpd. As such, the return to full production (or near full production) probably won’t even be noticeable. Ecuador’s oil minister acknowledged as much. "What Ecuador does or does not do has no great impact on OPEC's total output,” he said, according to Reuters. However, it isn’t Ecuador’s production levels that should be concerning. It is the psychological and political impact that a withdrawal from the deal could have on the commitments from other members. Oil analysts have long argued that compliance with the cuts will weaken over time, as has historically been the case. We now have the first OPEC member that has succumbed to persistently low oil prices, deciding that the collective output reductions are not worth the trouble. How long before other members come to the same conclusion?

Deeper OPEC Cuts Would Help Shale – OPEC would hurt itself and help U.S. shale producers if it adopted deeper cuts, the former oil minister of Qatar warned. “It’s not beneficial for OPEC to deepen their cuts because prices will go up and shale oil producers and others will take OPEC’s market share,” Abdullah al-Attiyah said in interview in Istanbul. The Organization of Petroleum Exporting Countries and Russia’s quest to rebalance the oil market through a deal to curb production have failed to sustainably boost prices. Resilient U.S. shale output and rising production from Libya and Nigeria — OPEC members exempt from cutting — have diluted the group’s efforts and global inventories remain well above the five-year average. “This is a new situation for the oil market,” al-Attiyah said. “Traditionally, it was always oil competing with other sources like coal or renewable, but today it is a fierce war” between conventional and unconventional oil resources.

Twice burned, funds wait for clear sign of oil rebalancing: Kemp (Reuters) - Hedge funds have continued to cover their short positions in crude and refined products, but the impact on oil prices has been surprisingly muted so far, with a much smaller rally in prices than expected.Hedge funds and other money managers reduced short positions in the five main futures and options contracts linked to petroleum prices by a combined 69 million barrels in the week to July 11.Fund managers have cut the total number of short positions over two weeks by 116 million barrels, falling from a record 510 million barrels on June 27 to just 394 million barrels on July 11 (http://tmsnrt.rs/2v92ssF).Over the same period, total long positions increased by just 10 million barrels, rising from 815 million barrels to 825 million barrels, according to regulatory and exchange data.Short covering was widely expected after hedge funds established record or near-record short positions in most contracts by the end of June (“Hedge funds walk into a bear trap in oil”, Reuters, July 3). The concentration of short positions and relatively small number of long positions left the market looking stretched on the downside. Crowded trades such as this have often preceded a sharp price reversal in the past. But instead of rallying, crude prices generally declined over the week between July 3 and July 11, and have only risen modestly since, indicating hedge funds found plenty of willing sellers as they closed their short positions. Hedge funds built large bullish positions twice earlier this year, in February and April, anticipating a tightening oil market and higher prices, only to be disappointed and incur significant losses both times. With investors’ patience wearing thin, few managers can afford to be wrong a third time, so many seem to be waiting on the sidelines until signs of market rebalancing are unambiguous.

 Saudi Arabia empties domestic crude tanks: Kemp (Reuters) - Saudi Arabia has been progressively reducing its bloated domestic stocks of crude in a sign the global oil market is rebalancing, albeit more slowly than OPEC anticipated. Saudi Arabia’s domestic crude stocks declined in 16 of the 19 months between November 2015 and May 2017 according to government data reported to the Joint Organisations Data Initiative (http://tmsnrt.rs/2uIi9dC).Domestic stocks fell to just 259 million barrels at the end of May 2017, which was the lowest level since January 2012, according to updated figures published on Tuesday.Stocks were down by 30 million barrels compared with the same month a year earlier and are now down by 71 million barrels from their peak in October 2015 (http://tmsnrt.rs/2ua1nmg). Like other producers, Saudi Arabia holds stocks for a range of reasons, including the need to cover field maintenance and manage seasonal changes in consumption and exports. Operational stocks are held to satisfy demand for exports as well as from domestic oil refineries and power plants burning crude to produce electricity. The best way to track stocks over time is to compare them with the total daily requirement from exports, refinery intake and direct crude burn.   By October 2015, with prices well on the way to their nadir in January 2016, stocks had risen to 329 million barrels, equivalent to 32.7 days worth of combined requirements. Since then, stocks have been progressively reduced and were down to just 259 million barrels and 25.7 days worth of combined requirements in May 2017 (http://tmsnrt.rs/2tFTVM6 ). Saudi crude stocks display a strong element of seasonality owing to refinery maintenance schedules and increased crude consumption for electricity generation during the hot summer months. Nonetheless, there has been a clear downward trend in both absolute stocks and days of cover since late 2015 as production has fallen short of combined requirements. The rise and subsequent fall in Saudi crude stocks illustrates how heavily oversupplied the crude market was during 2014/15 as well as the gradual rebalancing under way during 2016/17.

Are Deeper Cuts OPEC’s Only Option? - Despite the November, 2016 Vienna crude oil agreement among OPEC and certain non-OPEC (NOPEC) producers and its subsequent May 2017 extension, the global crude oil market is still burdened with excess supply and may be far from re-balancing.“Re-balancing” largely refers to an economic mechanism where a sustainable and stable equilibrium price for a commodity is realized. In the case of crude oil, this rebalancing has historically been achieved by artificially intervening in supply.While observers may note that the market should be left to re-balance itself, a look at fundamentals suggest that approach may not be feasible or sufficient. Therefore, according to Rex Preston Stoner, an energy consultant with U.S.-based HUB International, “joint action by the OPEC/NOPEC producers may remain necessary for the medium term, if not the long term, if crude is to avoid another price crash. Whether such collective action may hold is the ‘million dollar question’”Some observers argue that Saudi Arabia made a grave error when in 2014 it chose not to play its traditional role of global “swing producer” and refused to “turn off its taps” just as global demand declined. Market share was at stake and the Saudi action was based on an apparently misinformed calculation that high-cost producers, particularly the U.S. Shale companies, would be forced from the market leaving OPEC producers with their market share restored and the global crude oil price stabilized at a level that could sustain the Saudi and other OPEC producers’ economies. In the light of rising U.S. production, gains from Libya and Nigeria, and doubts over the effectiveness of the OPEC-led pact oil prices fell clearly indicating that markets require more OPEC intervention.

OPEC can’t save oil market alone – the US has to step in, says Morgan Stanley U.S. shale production needs to slow down for the oil market to balance, according to Wall Street bank. OPEC and other major oil producers have taken on an ambitious battle to rebalance the oversupplied oil market, but despite the best intentions their efforts aren’t enough, Morgan Stanley warns. In a Thursday research report, the Wall Street bank called on U.S. shale-oil producers to join in efforts to tackle the global supply glut that has pummeled prices since the summer of 2014. “If OPEC doesn’t balance the market, the oil price will have to force it somewhere else, most likely in U.S. shale. For a chance of a balanced market in 2018, the U.S. rig count can no longer grow and possibly needs to contract ~150 rigs. Given current break-evens, this requires WTI between $46-50,” the Morgan Stanley analysts said in the report.Cementing their downbeat assessment of the oil market, they significantly downgraded their 2017 forecasts for both West Texas Intermediate and Brent. They now see WTI trading at $48 a barrel at the end of the year, down from $55 expected previously. For Brent, they cut their forecast to $50.5 from $57.5. 

Oil Producers Don’t Have a Plan to End the Glut - OPEC and Russia’s plan to clear the global oil glut hasn’t worked as they hoped, but there’s little expectation the world’s largest producers will act more aggressively when they meet this weekend.Oil has slumped into a bear market and inventories remain stubbornly high despite a deal between OPEC and 10 countries outside the group to cut output. The implementation of supply curbs is faltering as Libya and Nigeria restore lost production. The trouble for ministers meeting in St. Petersburg to review the progress of the deal is the alternatives look little better than the status quo. If the Organization of Petroleum Exporting Countries abandons the deal and increases oil output, a further plunge in prices would inflict more pain on their economies. And while deepening the production cuts would spark a rally, that might encourage even bigger flows from U.S. shale drillers. “The bottom line is, it hasn’t worked” and “if they cut more, the more they support prices, the more they support U.S. production.” Oil prices have given up all their gains since OPEC and Russia assembled a coalition of producers in December to try and end the market’s two-and-a-half-year slump. Despite forecasts that the measures would reduce the world’s bloated oil inventories, that doesn’t seem to be happening, the International Energy Agency said on July 13. The agreement between OPEC and its allies was undermined before it even started, as key producers such as Saudi Arabia, Russia and Iraq ramped up exports just before the deadline to cut output took effect. The pact faces a further challenge as Nigeria and Libya, which were exempt from cuts while they tackled political crises, recover output.

The Only Way OPEC Can Kill U.S. Shale -- Commerzbank’s head of commodity analysis wrote in early December that the OPEC production cut would only serve to strengthen the rise in U.S. production, and he kept his outlook on oil prices unchanged: Weinberg forecast that crude would slide below US$50 this year, which is exactly what is happening right now. Meanwhile, these same banks that were quick to revise their price outlook upwards are now just as quick to downgrade their earlier outlooks as the bleak reality firmly settles in.Weinberg advised OPEC to change tack and go back to what it set out to do initially: stifle U.S. shale by pumping at maximum. “They should let prices crash to kill shale and then aim for steady price increases in the long term,” Weinstein told Bloomberg. The question remains, however, whether OPEC, with oil-reliant budgets already strained, could afford this tactic reversal now that they’ve suffered price lows for an extended period of time. And while it would hurt to do just that, OPEC may not have too much of a choice. The options right now are 1) to keep going with the cuts as-is, 2) to deepen the cuts, and 3) to give up the cuts and follow Weinberg’s advice. The first option would result in no great change in prices, most likely, and it might add fuel to diversification efforts. These efforts, however, require a lot of investment, which would be hard to come by if OPEC chooses option three.Option two is perhaps even worse than the others: an OPEC insider, Qatar’s ex-Oil Minister Abdullah al-Attiyah, told Bloomberg that deeper cuts will only benefit U.S. shale boomers, and would not benefit OPEC. “The problem is that there is someone waiting in the dark corner for OPEC -- it’s shale oil producers and whenever prices rise, they raise production,” he said.In the price context, Weinberg’s suggestion to return to maximum production may at some point make the most sense. Prices may indeed take a nosedive if OPEC turns the taps on full max. Yet, the decline may not be as severe as OPEC fears—a possibility that would further poke gaping holes into precarious oil-dependent budgets. And given the political diversity of OPEC, would the group realistically be able to rally its troops behind such a painful move, even if it wanted to?

 Oil settles lower as report renews U.S. shale-output worries - Oil prices finished with a loss on Monday, their first in six sessions, as expectations for a monthly rise in U.S. shale-oil production helped to push prices back in the wake of a more than 5% climb last week. August West Texas Intermediate crude CLQ7, +0.13%  shed 52 cents, or 1.1%, to settle at $46.02 a barrel on the New York Mercantile Exchange, after trading as high as $46.88 during the session. It had scored a gain of 5.2% last week. September Brent crude LCOU7, +0.14% on London’s ICE Futures exchange lost 49 cents, or 1%, to $48.42 a barrel. In a monthly report released Monday, shortly before WTI prices settled, the U.S. Energy Information Administration said it sees a rise of 113,000 barrels a day to 5.585 million barrels a day in August oil production from seven major domestic shale plays, compared with July, with the Permian Basin expected to see the largest output climb.The data followed a separate monthly short-term outlook report from the EIA, which forecast a growth slowdown in U.S. output next year because of lower oil prices.  “Inventory levels and any headlines that provide some supply or demand guidance will be the main drivers in the near term,” Brian Youngberg, senior energy analyst at Edward Jones, told MarketWatch, ahead of Monday’s EIA report. “We still see oil higher at the end of the year, with shale output growth offset by rising global demand and output levels elsewhere remaining challenging as a whole,” he said. Phil Flynn, senior market analyst at Price Futures Group, meanwhile, pointed out “U.S. crude supply is falling at a record pace and the drawdowns in supply do not look like it will stop anytime soon.”The EIA has reported hefty declines in domestic crude supplies in each of the last two weeks and last week, Baker Hughes reported a modest increase in the number of active U.S. oil-drilling rigs.

Oil Up As Saudis Consider Deeper Output Cuts --Oil prices continued to ratchet upwards, with WTI above $46 per barrel during midday trading on Tuesday. The latest gains come on rumors that Saudi Arabia could be considering deeper cuts to its supply. Bloomberg reported that Saudi Arabia is mulling cuts on the order of 1 million barrels per day (mb/d), or nearly twice its required commitment under the OPEC deal. More aggressive action might be needed as the most recent data shows OPEC compliance slipping, while at the same time the first member decided to pull out of the deal this week (see below).   Ecuador said that it could no longer adhere to the OPEC cuts because it has financial pressure and needs to export more. The government said that it would gradually raise output. Ecuador is a small producer and was already not complying fully with its promised cuts so the additional barrels that the South American nation will put onto the market won’t be a game-changer. But the real concern is that overall compliance within the cartel starts to slip.  UAE’s foreign minister told Bloomberg that his country is not interested in a quick fix to the standoff between several gulf nations and Qatar. He said that the blockade could last “weeks, months” to come to a resolution. “We want to take away Qatar’s huge, huge support for this extremism and terrorism that we are seeing everywhere,” the minister said.  The U.S. government recertified the 2015 nuclear deal with Iran, although some within the White House were reportedly pushing against the move. President Trump called it a “terrible deal” during his campaign of for the presidency, raising fears that the administration would scrap the agreement. The White House recertified the deal this week, although at the same time it plans on slapping new sanctions on Iran for the latter’s ballistic missile program. “Iran is unquestionably in default of the spirit of the JCPOA,” a senior administration official said Monday, referring to the nuclear deal.

Oil edges up on talk of potential cuts to Saudi exports -  Oil prices got a boost Tuesday, settling higher following a report that Saudi Arabia is considering cutting crude exports, even as the latest data show U.S. production trending higher this year. A sharply weaker U.S. dollar Tuesday also contributed to gains for oil, which is traded in the greenback. August West Texas Intermediate crude rose 38 cents, or 0.8%, to settle at $46.40 a barrel on the New York Mercantile Exchange, but ended off the session’s high of $46.92. September Brent crude on London’s ICE Futures exchange gained 42 cents, or 0.9%, to $48.84 a barrel. Saudi Arabia is considering a 1 million barrel-a-day cut to its crude exports, according to a report Tuesday from the Financial Times, which cites a recent note to clients from Bill Farren-Price, a consultant at Petroleum Policy Intelligence. Farren-Price said the move would offset the rise in Libyan and Nigerian supplies. “This is what OPEC has resorted to, export cuts in order to jawbone the market higher,” said Bill Baruch, chief market strategist at iiTRADER. “We believe that OPEC members are getting restless and instead of this news showing how stable a deal they have, its shows the holes.”

WTI Sinks After Surprise Crude Inventory Build --WTI has roller-coastered higher since last week's 'bullish' API report and rose today for the 6th of the last 7 days (on Saudi cut hype). While many eyes are on record high shale production, the recent trend in inventory draws remains key but API upset that dream briefly as Crude saw an unexpected build (+1.628mm vs -3.5mm exp). Gasoline and Distillates saw major draws (much bigger than expected) and Cushing saw its first build in 8 weeks.API

  • Crude +1.628mm (-3.5mm exp)
  • Cushing +608k
  • Gasoline -5.448mm (-1.3mm exp)
  • Distillates -2.888mm

Big draws in crude, and Gasoline (and at Cushing) in the last few weeks have set the scene for some normalization but tonight's API data shows an awkward build in crude stockpiles (and at Cushing) even though Gasoline and Distillates saw big draws... It's been quite a ride since last week's API data sparked buying (DOE production sparked selling, and OPEC jawboning did the rest)...(NOTE - for the second day in a ro WTI tagged $47 and fell). When the API data hit, the initial reaction was selling pressure... “The market is waiting for the proof in the pudding,” Michael Loewen, a strategist at Scotiabank in Toronto, says by phone, “There’s a lot of chatter these days. If Saudi Arabia is actually going to reduce exports” investors will need to see it in tanker-tracking data before they believe it, he says

WTI Jumps Back Above $47 After Crude Draw; Production At Highest Since July 2015 - After API's surprise crude build, DOE dashed bears' hopes with a bigger than expected crude draw (-4.727mm vs -3.5mm exp) as the entire energy complex was inventories decline. WTI prices kneejerked back above $47 on the proint but stalled a little as once again production jumped (to its highest since July 2015). DOE:

  • Crude -4.727mm (-3.5mm exp)
  • Cushing -23k
  • Gasoline -4.445mm (-1.3mm exp)
  • Distillates -21.37mm (+1.2mm exp)

Amid peak demand season, the large gasoline draws are unsurprising but the bid crude draw (especially compared to API's build) was a bullish surprise... Overall, much is being made of the notable decline in US stockpiles since its peak in late March, however, as the chart below shows, US Crude stockpiles remain 37% above historical average... Of course, last week it was the resurgence in US crude production that stymied bullish exuberance at inventory draws. After rebounding last week, it looks like the Alaskan component of US oil production slowed this week as maintenance work continues in the Alaskan North Slope, but the Lower 48 saw production hit 2 year highs...

 Oil rises 1.6% to 6-week high, closing at $47.12, after big drop in US crude, gas stockpiles - Oil prices jumped more than 1 percent on Wednesday after a U.S. report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise drop in distillate inventories.The Energy Information Administration (EIA) said U.S. crude stocks fell 4.7 million barrels during the week ended July 14. , exceeding estimates for a 3.2 million draw in a Reuters poll.U.S. West Texas Intermediate (WTI) crude futures ended the session 72 cents, or 1.6 percent, higher at $47.12 per barrel, the best closing price since June 6. Brent crude futures, the international benchmark for oil prices, were up 84 cents, or 1.7 percent, at $49.68 per barrel by 2:35 p.m. ET (1835 GMT). "The report was more good news for the oil industry as inventories declined across the board for crude and products by over 10 million barrels," Andrew Lipow, president of Lipow Oil Associates in Houston said.EIA said distillate stocks decreased 2.1 million barrels and gasoline stocks declined 4.4 million barrels. Analysts polled by Reuters had forecast a 1.2 million barrel build in distillates and a 0.7 million barrel draw in gasoline.U.S. distillates were up 2.8 percent and gasoline futures rose 2.5 percent, briefly boosting the products crack spread, a measure of refinery margins, to its highest since November 2016. The drawdown occurred even as EIA said U.S. production climbed to 9.43 million barrels per day (bpd), its highest since July 2015. Analysts said rising U.S. production has made it harder for OPEC and other producing nations to support prices with their own output cuts.

Oil retreats from 6-week high as traders await producer meeting -  Oil pulled back Thursday, a day after a third consecutive weekly declines in U.S. crude supplies lifted prices to a six-week high. Traders weighed outcome scenarios for a crucial meeting of some of the world’s biggest producers next week. The August contract for West Texas Intermediate crude CLQ7, -0.83% which expired at the day’s settlement, fell 33 cents, or 0.7%, to finish at $46.79 a barrel on the New York Mercantile Exchange. The new front-month contract, September WTI ended at $46.92, down 40 cents, or 0.9%. September Brent lost 40 cents, or 0.8%, to $49.30 a barrel on ICE Futures Europe, after tapping a high of $50.19. Futures prices for WTI and Brent finished Wednesday at the highest levels since June 6, according to FactSet data, after the Energy Information Administration showed that U.S. crude inventories declined by a larger-than-expected 4.7 million barrels for the week ended July 14. But WTI oil prices are “still not moving anywhere close to the $50 level regardless of what the crude inventory data will show us,” said Naeem Aslam, chief market analyst at ThinkMarkets UK. “The supply glut is still very much the focus,” he said. “As long as we do not see the glut fading in a meaningful way, we think the odds are stacked against the upward move for the oil price.”

Oil retreats as traders await rig data, OPEC meeting - Oil pulled back Friday, putting prices on track for a loss on the week, as traders awaited the latest count on U.S. rigs for hints on the outlook for U.S. crude production and an coming meeting of major producers. September West Texas Intermediate crude lost 78 cents, or 1.7%, to $46.14 a barrel on the New York Mercantile Exchange, extending a 0.9% loss from a day earlier. For the week, prices turned lower, with the contract poised for a loss of roughly 1.2%. Based on the front-month contract finish of $46.54 last Friday, prices have lost about 0.8% for the week.  September Brent crude on London’s ICE Futures exchange fell 72 cents, or 1.5%, to $48.58—down about 0.6% from a week ago. The international benchmark had tapped the $50-a-barrel level for the first time in more than a month on Thursday before giving up gains in a move that some attributed to profit taking.“Market focus remains on the global oversupply problem, and the lack of response the market has had to the [Organization of the Petroleum Exporting Countries] and non-OPEC production cap agreement,” said Tyler Richey, co-editor of the Sevens Report. On Monday, OPEC oil ministers as well as some other producers who are not members of the group, including Russia, will meet to review the production-cut deal, which is set to expire at the end of March next year. They are also expected to discuss possible output limits for OPEC members Nigeria and Libya. Sharp rises in output have been seen this year from those countries, which are currently exempt from the agreement.

OilPrice Intelligence Report: Lower OPEC Compliance Keeps Oil Prices Down: Oil prices posted more gains this week, as the EIA reported deeper inventory reductions with Brent briefly traded above $50 per barrel for the first time in nearly two months on Thursday. There is a bit more confidence in the oil market than a few weeks ago, although there are questions about the potential upside from here. U.S. oil production jumped again, putting output above 9.4 mb/d, which, along with fears of rising OPEC production, pushed oil down during early trading on Friday. OPEC members are meeting to monitor the progress of their production cuts, but analysts see little chance that they will take more aggressive action to balance the market. Deeper cuts would require more sacrifice and merely open up more market share for U.S. shale, while abandoning the collective output cuts would surely lead to another slide in prices. “They’re between a rock and a hard place,” Mike Wittner, head of oil market research at Societe Generale SA, told Bloomberg. “The bottom line is, it hasn’t worked.” Nevertheless, a report from Petroleum Policy Intelligence says that Saudi Arabia is considering unilateral cuts. Exports will probably drop by 600,000 bpd this summer as domestic consumption ramps up, but Riyadh is considering cuts on the order of 1 mb/d.   New data from Petro-Logistics estimates OPEC production rising in July, further evidence of a weakening compliance rate for the cartel. The consultancy forecasts production rising by 145,000 bpd this month, pushing combined output above 33 million barrels per day. The production gains come from Saudi Arabia, the UAE and Nigeria. Oil prices appeared to fall on the news on Friday.  

WTI Tumbles Towards $45 Handle After Tanker-Tracker Signals OPEC Supply At 2017 Highs --Despite the 'bullish' inventory data (and demand), WTI Crude just sank towards a $45 handle - red on the week - as tanker-tracking firm Petro-Logistics signals OPEC crude supply rising again this month will be the highest this year (along with US shale output at record highs). As Bloomberg notes, supply from OPEC members is set to exceed 33 million barrels a day this month, more than 600,000 barrels a day higher than the first-half average,according to Petro-Logistics. The data could reinforce skepticism about the effectiveness of the Organization of Petroleum Exporting Countries’ production cuts as officials from the group gather for meetings in St. Petersburg, Russia.This pushed prices below the pre-DOE data lows...and red for the week. Oil remains in a bear market on concern that growing output in the U.S., Libya and Nigeria is offsetting other producers’ curbs, meaning stockpiles aren’t shrinking fast enough. The report from Petro-Logistics found that Saudi Arabia, the United Arab Emirates and Nigeria are behind the extra barrels. The latter is exempt from making cuts as it tries to recover from disruption due to theft,sabotage and attacks by rebels.The findings of Petro-Logistics further weaken “the foundations under the output deal, which is what the market is also saying by sending prices lower,” said Jens Naervig Pedersen, analyst at Danske Bank A/S. “It puts pressure on OPEC before the meeting this weekend.” Oil bulls hope remains with the rig count later today and more headlines of hope ahead of Monday's meeting of oil leaders.

Oil Rig Count Falls By 1 As Analyst Warns Permian Reserves Are Grossly Exaggerated - For only the second time in the last 27 weeks (and 4th in the last 56 weeks), the number of US oil rigs fell last week (down 1 to 764 rigs). There is a growing concern that the rising rig count has now outpaced the lagged response to pricing and is due to rollover further... WTI tumbled to a $45 handle heading into the data after tanker-tracker data suggested OPEC supply was the highest in 2017...But as OilPrice.com's Arthur Berman notes, global energy dominance by the United States is somewhere between aspirational and absurd.  So far in 2017, the U.S. has imported more than 9 million barrels of crude oil per day, and net imports have averaged more than 7.3 million barrels per day. How exactly can the world’s biggest importer of oil become the supplier upon which other countries depend?The recently released BP Statistical Review Of World Energy 2017 places the United States 10th in the global ranking of oil reserve holders between Libya and Nigeria (Figure 1). That’s not bad but it hardly puts the U.S. in the same league as energy-dominant countries like Venezuela, Saudi Arabia, Canada, Iran, Iraq and Russia that have on average 4 times more proved reserves than the U.S.Perhaps the President and Secretary Perry have been reading John Mauldin’s recent work of magical realism Shale Oil: Another Layer of US Power. It features a chart which shows that the U.S. is the largest oil reserve holder in the world (Figure 2)The chart is so wrong that it defies explanation.Its Rystad Energy source data reveals that Mauldin has misrepresented recoverable resources—all oil regardless of commercial value–as reserves—a specific volume that is commercial at today’s oil prices.It also seems that Mauldin didn’t show Rystad’s data correctly. Saudi Arabia—and not the U.S.—is the largest holder of recoverable resources according to Rystad (Figure 3).

U.S. Oil Rig Count Falls By 1 As Canada Adds 15 Rigs -- The number of active oil rigs in the United States fell this week by 1 rig—it’s second loss in four weeks, and its third loss this year—in a sign that the gains we’ve seen week after week are starting to slow. Combined, the total oil and gas rig count in the US now stands at 950 rigs, with oil rigs falling by one and gas rigs falling by one. The market may want to rejoice in this week’s falling US rig count, but things don’t look so good everywhere when it comes to oil prices—Baker Hughes also reported today that Canada’s rig count increased by 15, erasing—and then some—any optimism that may otherwise have come from the falling number of active rigs in the US. Prices had fallen by mid-day on Friday on reports that OPEC’s production would likely increase in July, lowing compliance from the cartel, which had dipped in June as well. Estimates are that OPEC production in July will exceed 33 million bpd, with production increasing from the United Arab Emirates, Nigeria, and even heavyweight Saudi Arabia. At 11:23 am EST, WTI was down 1.56% at $46.19 while Brent crude was up 1.38% at $48.62—both benchmarks below last week’s levels.  Ironically, or perhaps fulfilling earlier suggestions along these lines, OPEC’s noncompliance may yet prove to be the best antidote—albeit a temporary one—to US shale’s aggressive growth, which has seen a near 50-percent increase to the number of active oil and gas rigs in 2017 alone. As the market shows its displeasure with OPEC’s rising production, prices fall, and these lower prices may put pressure on the US shale industry, and may result in fewer rig gains each week. Unfortunately for OPEC—who appears to be in a bit of a pickle—while the lower prices may slow the run on US shale, as long as prices stay low, OPEC’s many oil-dependent economies will continue to suffer budget holes, and Saudi Arabia probably cannot afford an Aramco Valuation with lower oil prices. The reality may be at this point that OPEC’s only remedy is significantly increased demand, without which there may not be enough room for all the oil players to pump at-will.

Baker Hughes: US rig count declines for second time in 4 weeks - Data from Baker Hughes show a 2-unit decline in the overall US rig count for the week ended July 21. The tally has now fallen in 2 of the last 4 weeks after recording 23 consecutive increases (OGJ Online, July 14, 2017).   At 950 rigs working, the count is still up 546 units since the beginning of a drilling rebound that began following a nadir on May 20-27, 2016.  All eyes remain on oil-directed rigs, which edged down 1 unit this week to 764, up 448 units since May 27, 2016. They too have fallen twice in the last 4 weeks, increasing just 6 units during that time. During the 4 weeks prior, the oil count climbed 36 units.Gas-directed rigs also edged down 1 unit and now total 186, up 105 units since Aug. 26, 2016. Onshore rigs fell by 4 as rigs drilling horizontally posted their first drop in 36 weeks, losing 1 unit to 803, up 489 units since May 27, 2016. Directional drilling rigs rose 3 units to 75.  The offshore count increased for the first time in 9 weeks, rising 2 units to 23. The US Energy Information Administration’s preliminary estimate of US crude production for the week ended July 14 shows a 32,000-b/d increase to 9.43 million b/d, up 935,000 b/d year-over-year. The Lower 48 added 30,000 b/d while Alaska rose 2,000 b/d.  EIA this week forecast crude production from the seven major onshore producing regions in August to gain 113,000 b/d month-over-month to 5.585 million b/d (OGJ Online, July 17, 2017). About 94% of the monthly increase is expected to come from the Permian, Eagle Ford, and Niobrara. Among the factors taken into consideration when making the projections, EIA examines the regions’ total number of active rigs and drilling productivity. In June, the seven regions gained 154 drilled but uncompleted (DUC) wells to total 6,031, the agency said. The Permian’s DUC well count climbed by 130 to 2,244, and the Eagle Ford’s count rose by 42 to 1,406. Texas and Oklahoma led the major oil- and gas-producing states with 3-unit losses to 463 and 131, respectively. Drilling growth in Texas has slowed over the last 9 weeks, during which time it has added just 5 units. During the 9 weeks prior, it added 63 units. The Eagle Ford dropped 2 units this week to 78, its lowest level since April. The Barnett dropped 1 unit to 6. The Permian, meanwhile, edged up 1 unit to 374. The basin has added 13 units over the last 9 weeks compared with 53 during the 9 weeks prior. The Arkoma Woodford and Mississippian each dropped 1 unit to 9 and 5, respectively. New Mexico dropped 2 units to 57. Alaska lost 1 unit to 5. North Dakota and Utah each rose 1 unit to respective counts of 54 and 10. California gained 2 units to 13. Partly bolstered by offshore rig deployments, Louisiana climbed 4 units to 71.

Oil prices sink on a report OPEC supply will rise in July -- Oil prices fell more than 2 percent on Friday, wiping out the week's gains after a tanker-tracking firm reported supply from OPEC is rising. OPEC's July oil supply was set to rise by 145,000 barrels per day (bpd) compared to June, Reuters reported citing data from PetroLogistics, a company that tracks OPEC supply forecasts.The increase in oil supply would push production above 33 million barrels per day.Higher supply from Saudi Arabia, the United Arab Emirates (UAE) and Nigeria would drive this month's gains, according to PetroLogistics. U.S. West Texas Intermediate futures erased earlier gains following the PetroLogistics report. They were ended Friday's session down $1.15, or 2.5 percent, at $45.77 per barrel. Brent crude fell $1.30, or 2.6 percent, at $48 a barrel by 2:38 p.m. ET (1838 GMT) .WTI posted a nearly 1.7 percent decline on the week, after earlier being on pace to post a roughly 1.5 percent weekly gain.The day's losses briefly eased after oilfield services firm Baker Hughes reported its weekly count of oil rigs operating in the United States ticked down by one rig to a total of 764. The rig count has fell or barely increased in recent weeks, suggesting early signs of moderating U.S. production growth. Government data showing a larger-than-expected drop in U.S. crude oil and fuel stockpiles had boosted oil prices to six week highs earlier this week.  Friday's decline took place as investors braced for a key meeting between OPEC and non-OPEC members next week. The oil-producing countries will meet to discuss compliance of agreed production cuts and how to bring down inventory levels.

 OPED deal at breaking point as compliance falls. - OPEC data was mixed this week reminding us of two important themes - 1, OPEC members are pushing the limits of the current output agreement and 2- recent gains in Libya and Nigeria could be hard to maintain. On the first item, preliminary estimates see July OPEC production +145k bpd m/m which would represent a new YTD high in the cartel’s output and sow additional doubts about their ability to coordinate supply cuts. Meanwhile Iraq is publicly promoting its plan to ramp production up to 5m bpd by year-end (from 4.4m bpd in June) and Ecuador stated that they will no longer participate in cuts in an effort to strengthen their finances. As for the second item, Nigeria’s production and export woes were headline news this week due to pipeline vandalism. All-knowing prompt brent spreads digested the week’s news flow and moved slightly higher. Brent V17/Z17 rallied to -55 cents on Friday forecasting a reasonably strong supply/demand balance in coming month. WTI spreads continued to moderate this week with help from drawing overall stocks and sub 58m bbls in Cushing. On the demand side refiner inputs continue to impress and could be aided in the near term by a rally in US margins to new YTD highs. In front spreads WTI U17/Z17 yielded just 22 cents / mo contango suggesting large inventory draws should persist in the US through the balance of the year. On the downside, however, we saw limitations to potential rallies in the swap market where producers were busy selling WTI Cal ’18 near $49/bbl. CSO markets also saw bearish flows with trade groups building short positions in flat calls in 4q17 and 1h18.

Saudi Arabia curtails crude flow to United States: Kemp (Reuters) - Saudi Arabia is making good on promises to curtail oil shipments to the United States with the likely intention to drain visible inventories and support prices.The United States imported an average of 524,000 barrels per day (bpd) of crude from Saudi Arabia in the week ending July 14, the lowest volume for more than seven years (http://tmsnrt.rs/2vI1iE2).Imports from Saudi Arabia averaged just 810,000 bpd over the last four weeks, according to the U.S. Energy Information Administration (EIA), the slowest rate since January 2015.Crude arrives on supertankers carrying an average of around 2 million barrels so the weekly import numbers exhibit a lot of volatility linked to the timing of tanker arrivals.Imports are only reported to the U.S. Energy Information Administration when the crude has cleared U.S. customs so weekly volumes are sensitive to the precise timing of customs clearance.But there is no mistaking the downtrend in imports of Saudi Arabian crude since the start of June which seems set to continue until at least the end of August.On July 20, there were 15 very large crude carriers and 3 Suezmax tankers identified en route from Saudi Arabia to the United States, according to Kpler, a global cargo-tracking firm based in Paris.The number included some partially loaded tankers already off the U.S. coast waiting to complete discharging, according to an analysis by Kpler. There are also a couple of Saudi cargoes with unclear final destinations. But at the same point in 2016, there were 25 very large or ultra large crude carriers and 3 Suezmax tankers voyaging from Saudi Arabia to the United States.Saudi officials have openly discussed reducing shipments to the United States in recent weeks. Saudi crude exports to the United States will be below 800,000 bpd in August, a Saudi industry source familiar with production policy told Reuters ("Saudis to cut Aug oil exports to lowest level this year", Reuters, July 12).Crude and product stocks in the United States are the most transparent and high-profile element of global inventories thanks to the weekly records published by the EIA.Many traders and analysts use weekly stock data from the EIA as a proxy for changes in the global supply-demand balance, even though they may not be representative of the whole market.Saudi Arabia and its OPEC and non-OPEC allies are keen to demonstrate to a sceptical market that output cuts are finally drawing down bloated stocks. So it makes sense to curb shipments to the United States to try to accelerate the reduction in the highly visible stocks held in North America.

Saudis Cut Oil Exports To U.S. To Seven-Year Low -- Saudi Arabia is following through on cuts to its crude oil exports to the United States, weekly EIA crude import data show, after Riyadh stated a couple of months ago that it would purposely reduce exports to the U.S. to force a reduction in the world’s most transparently reported inventory.According to EIA figures, U.S. crude oil imports from Saudi Arabia averaged 524,000 bpd in the week to July 14, the lowest weekly level since June 11, 2010. In the week to July 7, U.S. imports of crude from Saudi Arabia averaged 851,000 bpd.   Weekly import numbers are volatile due to the timing of crude tanker arrivals and customs clearance, Reuters analyst John Kemp recalls.Nevertheless, the latest available weekly import data is the lowest level of weekly Saudi crude imports in more than seven years.The four-week average U.S. imports of crude oil from Saudi Arabia was 810,000 bpd for the four weeks ending the week to July 14 – and this was the lowest 4-week average import figure since January 2015.For the month of July, the Saudis were planning last month to cut exports to the U.S. by around 35 percent.   For August, Saudi Arabia is planning its oil exports to the U.S. to be below 800,000 bpd, as it will be slashing its total crude oil exports by more than 600,000 bpd to the lowest level this year, a Saudi industry source told Reuters last week.

Three Years Into Cheap Oil, Gulf Is Still Depending on a Rebound - Energy-rich Gulf Arab nations have scrambled to adjust to the slump in oil prices since 2014. Three years on, their economies are mired in weak growth and largely just as dependent on crude as they ever were.The six members of the Gulf Cooperation Council have curtailed subsidies and introduced new taxes to bolster non-oil revenue and reduce ballooning budget deficits. Much of the savings, however, have been due to spending cuts and the pace of reforms has slowed across the region, said Monica Malik, chief economist at Abu Dhabi Commercial Bank. Overall progress in economic diversification has been limited, she said.Absent a rebound in oil prices, analysts say it’s unlikely that these nations can repair their finances without deeper spending cuts that could further hurt growth. The standoff between a Saudi-led bloc and Qatar is also undermining investor confidence at a time when the GCC is seeking foreign funds. Five charts illustrate oil’s dominance and the challenges facing the region. First-quarter budget data from Saudi Arabia and Oman showed an improvement in their budget deficits alongside higher oil revenue, after the price of Brent crude rose to as high as $57.10 per barrel in January. It has since retreated under $50, well below what the two nations need to balance their budgets. Saudi Arabia, OPEC’s biggest producer, increased non-oil revenue in 2016 and introduced taxes on tobacco products and soda drinks in June this year. The government, however, reversed a decision to cut the bonuses and some allowances of state employees. A second round of subsidy cuts will also likely be delayed to later in 2017 or early next year, according to people with knowledge of the matter.

Libya to share oil output plans at OPEC/non-OPEC technical meeting next week: NOC -- Libya will present its output plans at the OPEC/non-OPEC technical committee meeting next week, led by the chairman of state-owned National Oil Corporation, Mustafa Sanalla. Sanalla said in a statement Tuesday that he will take "this opportunity to share with the committee the factors enabling and constraining Libya's production recovery." OPEC has been in a quandary in the last few months, as the effectiveness of its cuts are being blunted by the sharp rise in production from Nigeria and Libya, two members of the organization that were excluded from the original output deal in November. The two exempted countries have been invited to explain their production outlook, as the committee meets to review compliance with the deal and assess market conditions. The OPEC/non-OPEC monitoring committee meetings will take place next week in St. Petersburg, with a technical meeting on July 22 followed by a ministerial-level meeting on July 24. "I will consult with significant Libyan decision-makers before I leave and hope to present a unified Libyan position in St. Petersburg that will show we can act together in the national interest," Sanalla said. Last week, Sanalla was quoted as saying that Libya's humanitarian situation should be taken into account when considering whether the country is required to rein in its production. 

UAE arranged for hacking of Qatar government sites, sparking diplomatic row: Washington Post  (Reuters) - The United Arab Emirates arranged for Qatari government social media and news sites to be hacked in late May in order to post fiery but false quotes linked to Qatar's emir, prompting a diplomatic crisis, the Washington Post reported on Sunday, citing U.S. intelligence officials. The emir, Sheikh Tamim bin Hamad al-Thani, had been quoted in May as praising Hamas and saying that Iran was an "Islamic power," the Post reported. In response, Saudi Arabia, the UAE, Egypt and Bahrain cut diplomatic and transport ties with Qatar on June 5, accusing it of supporting terrorism. Qatar said in late May that hackers had posted fake remarks by the emir, an explanation rejected by Gulf states. The Post reported that U.S. intelligence officials learned last week of newly analyzed information that showed that top UAE government officials discussed the planned hacks on May 23, the day before they occurred. The officials said it was unclear if the UAE hacked the websites or paid for them to be carried out, the newspaper reported. The Post did not identify the intelligence officials it spoke to for the report. UAE Ambassador Yousef al-Otaiba denied the report in a statement, saying it was "false," the Post said.

Qatar Opens Its Doors to All, to the Dismay of Some - NYT —  In one western district, near the campuses hosting branches of American universities, Taliban officials and their families can be found window-shopping in the cavernous malls or ordering takeout meals from a popular Afghan eatery.A few miles away at a vast United States military base with 9,000 American personnel, warplanes take off on missions to bomb the Islamic State in Iraq and Syria — and sometimes the Taliban in Afghanistan. Officials from Hamas, a Palestinian militant group, work from a luxury villa near the British Embassy, and recently held a news conference in a ballroom at the pyramid-shape Sheraton hotel. And an elderly Egyptian cleric, a fugitive from Cairo, is a popular fixture on the city’s swank social scene, and was recently spotted at a wedding by an American diplomat who was attending the same celebration. This is the atmosphere of intrigue and opulence for which the capital of Qatar, a dust-blown backwater until a few decades ago, has become famous as the great freewheeling hub of the Middle East. Against a backdrop of purring limousines and dhows moored in the bay, Doha has become home to an exotic array of fighters, financiers and ideologues, a neutral city with echoes of Vienna in the Cold War, or a Persian Gulf version of the fictional pirate bar in the “Star Wars” movies. Yet that welcome-all attitude is precisely what has recently angered Qatar’s much larger neighbors and plunged the Middle East into one of its most dramatic diplomatic showdowns. For more than a month, four Arab countries have imposed a sweeping air, sea and land blockade against Qatar that, in a nutshell, boils down to a demand that Doha abandon its adventurist foreign policy, and that it stop giving shelter to such a broad range of agents in its capital. The blockading nations — Saudi Arabia, Egypt, the United Arab Emirates and Bahrain — insist that Qatar is using an open-door policy to destabilize its neighbors. They say that Doha, rather than the benign meeting ground described by Qataris, is a city where terrorism is bankrolled, not battled against.

Turkey Building Up Army Base in Qatar, Erdogan Adviser Says - Turkey is building up its military presence in Qatar, an adviser to President Recep Tayyip Erdogan said, in defiance of a Saudi-led bloc’s demand that the Turkish military pull out of the emirate. “Turkey’s steady buildup continues there, protecting the border and the security of the Qatari government,” adviser Ilnur Cevik said Monday by phone. Turkey has deployed dozens of commandos and some artillery units in Qatar, the Hurriyet newspaper reported. The growing Turkish military footprint further entrenches positions on either side of the Saudi-Qatar divide that broke open last month. The conflict has resisted Kuwaiti mediation and U.S. Secretary of State Rex Tillerson’s shuttle diplomacy, and on Monday, a senior United Arab Emirates official said the Saudi alliance was ready for this process to take a “very long time.” The allies -- Saudi Arabia, the U.A.E., Bahrain and Egypt -- cut diplomatic and commercial ties with the emirate on June 5. They have vowed to restore them only after the world’s biggest producer of liquefied natural gas complies with a list of 13 demands, including ending Turkey’s military presence, scaling back ties with Iran and severing relations with the Muslim Brotherhood. Qatar has rebuffed the demands and has denied the bloc’s allegation that it funds terrorism. “While the size of the Turkish military presence in Qatar is not big, it serves as a deterrent against moves that could threaten the Qatari government or its land border,” 

Qatar Crisis Set to Continue as Bloc Seeks a Solution ‘That Will Stick’ -  There’s little likelihood of a quick resolution to the Gulf standoff over Qatar as the emirate’s neighbors want a solution “that will stick,” according to a senior United Arab Emirates official. Speaking during a trip to London, Minister of State for Foreign Affairs Anwar Gargash said the four-nation bloc led by Saudi Arabia that’s isolating Qatar needs a clear signal that the emirate is willing to reexamine its position regarding extremism and terrorism. “The situation we want to move to is a neighbor that we can trust, a neighbor that is transparent, that we can do business with,” he said in an interview outside the Houses of Parliament. “This is not a crisis where we are looking for a quick fix,” he said. “We need a solution that will stick.” The allies -- Saudi Arabia, the U.A.E., Bahrain and Egypt -- cut diplomatic and commercial ties with the emirate on June 5. They have vowed to restore them only after the world’s biggest producer of liquefied natural gas complies with their demands, including ending Turkey’s military presence, scaling back ties with Iran and severing relations with the Muslim Brotherhood. Qatar has rebuffed the demands and has denied the bloc’s allegation that it funds terrorism. Gargash refused to give details of any further punitive measures being planned beyond saying that financial institutions and “people being harbored and supported by Qatar” might be targeted. “We’ve said before that we are not going to escalate but we will take, here and there, measures that we need to take within our sovereign rights and within international law,” he said. 

Qatar emir calls for negotiations to ease Gulf boycott - BBC News: The emir of Qatar has called for negotiations to ease a boycott by four powerful Arab neighbours. In his first public address since the crisis erupted, Sheikh Tamim bin Hamad Al Thani said any solution must respect Qatar's sovereignty. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut ties with Qatar in June over its alleged support for terrorism and ties with Iran, and issued a series of demands. Qatar denies aiding terrorists. In his television address, the emir condemned a "malicious smearing campaign" against Qatar and praised the resilience of its people. "As you know, life in Qatar life goes on normally," he said. But he said "the time has come for us to spare the people from the political differences between the governments". "We are open to dialogue to resolve the outstanding problems," so long as Qatar's "sovereignty is respected", the emir said.The restrictions put in place by the four Arab nations have forced the gas-rich emirate to import food by sea and air to meet the basic needs of its population of 2.7 million.Saudi Arabia and its allies have now backed down from a list of 13 specific demands they made last month. They included shutting down the Al Jazeera news network, closing a Turkish military base, cutting ties with the Muslim Brotherhood and downgrading relations with Iran.  Instead they say they want Qatar to accept six broad principles before they lift the restrictions. These include commitments to combat terrorism and extremism, and to end acts of provocation and incitement.

Qatar, Saudi Arabia To Islamize One Of Europe's Greatest Cathedrals-- Muslim supremacists seem to have fantasies -- as well as a long history -- of converting Christian sites to Islamic ones. Take, for example, Saint-Denis, the Gothic cathedral named for the first Christian bishop of Paris who was buried there in 250, and the burial place of Charles Martel, whose victory stopped the Muslim invasion of France in 732. Now, according to the scholar Gilles Kepel, this burial place of most of France's kings and queens is "the Mecca in Islam of France". The French Islamists are dreaming of taking it over and replacing the church bells with the call of the muezzin. In Turkey's greatest cathedral, Hagia Sophia, a muezzin's call recently reverberated inside the sixth-century church for the first time in 85 years. In France, Muslim leaders called for converting abandoned churches into mosques. thereby echoing The late writer Emile Cioran once predicted of Europe: "The French will not wake up until Notre Dame becomes a mosque". Now it is the turn of Spain's greatest Catholic site, the Cathedral of Córdoba. Spanish "leftists" and secularists would now, it seems, like to convert to Islam the cathedral of Córdoba, the symbol of a time when "Islam was on the verge of turning the Mediterranean into a Muslim lake". Now that Islam is again conquering large swaths of the Middle East and Africa, is it not a coincidence that this campaign is gaining ground? In 550 the Cathedral of Córdoba was a Christian basilica, dedicated to a saint; then, in 714, it was occupied by the Muslims, who destroyed it and converted it into the Great Mosque of Córdoba during the reign of Caliph Abd al Rahman I. The site was returned to Catholic worship by King Ferdinand III in 1523 and became the current great Cathedral of Córdoba, one of the most important sites of Western Christianity. Now an alliance of secularists and Islamists are trying to turn the church back to Islamic worship.The Wall Street Journal called it deconquista, playing with the word reconquista, the time when Spain was returned from Islam to Catholicism. "The Great Mosque of Córdoba" is what UNESCO -- also torturing, upending and turning history on its head to rewrite the past of Jerusalem and Hebron -- calls it. In the last six centuries, however, only Catholic mass and confessions have been officiated there. The WSJ charges "left-wing Spanish intellectuals" with trying to "de-Christianize" the site.

Saudi King’s Son Plotted Effort to Oust His Rival — As next in line to be king of Saudi Arabia, Mohammed bin Nayef was unaccustomed to being told what to do. Then, one night in June, he was summoned to a palace in Mecca, held against his will and pressured for hours to give up his claim to the throne. By dawn, he had given in, and Saudi Arabia woke to the news that it had a new crown prince: the king’s 31-year-old son, Mohammed bin Salman. The young prince’s supporters have lauded his elevation as the seamless empowerment of an ambitious leader. But since he was promoted on June 21, indications have emerged that Mohammed bin Salman plotted the ouster and that the transition was rockier than has been publicly portrayed, according to current and former United States officials and associates of the royal family. To strengthen support for the sudden change in the line of succession, some senior princes were told that Mohammed bin Nayef was unfit to be king because of a drug problem, according to an associate of the royal family. The decision to oust Mohammed bin Nayef and some of his closest colleagues has spread concern among counterterrorism officials in the United States who saw their most trusted Saudi contacts disappear and have struggled to build new relationships. And the collection of so much power by one young royal, Prince Mohammed bin Salman, has unsettled a royal family long guided by consensus and deference to elders. 

The Death of Saudi Arabia - Saudi Arabia, Egypt, United Arab Emirates and Bahrain recently cut off diplomatic relations with Qatar and launched an embargo, stating that they wanted the media outlet Al-Jazeera shut down, and support for the Muslim Brotherhood ended.  Or, more colloquially, and good for a belly laugh, “stop supporting terrorists”, which coming from any of those countries and especially Saudi Arabia is so flamingly hypocritical it puts the sun in shadow. Oh my God.Unfortunately for Saudi Arabia and its allies, Qatar has yet to give in, and it has been backed up by Turkey, who sent troops, and Iran, who is sending food.Then we have the war against Yemen. Saudi Arabia invaded Yemen, with a huge coalition, and US support, and, well, what have they accomplished? I suspect the main accomplishment will be crippling Yemen’s next generation by starving them when they were young.And, some time back, Saudi Arabia decided to lower oil prices to push out Western producers and—oh, look, oil prices are too low to support Saudi Arabia.The joke in Saudi Arabia, I understand is, “my grandfather rode a camel, I drive a car, my grandson will ride a camel.”Saudi Arabia is doomed. The current king is an incompetent, thrashing around trying to solve problems and making them worse.  He, as with his forbears, sees foes everywhere, but unlike those who came before him, he isn’t willing to simply sit and let sores fester. He wants to do something about them, and so far, what he’s done has made them worse.This is fairly standard: all dynasties go bad eventually because the kings-to-be grow up in wealth and power and think it’s the natural state of things: that they are brilliant and deserve it all, when it was handed them on a platter. Perhaps they are good at palace intrigue and think that extends beyond the palace.  It doesn’t.

Saudi Arabia Is Under Threat of a Cholera Outbreak as Hajj Nears - Though the Saudi-led coalition may have wanted to keep its war in Yemen at arm's length, the cholera epidemic — a "direct consequence" of two years of conflict — is not bound by borders.In fact, it may invade one of Saudi Arabia's most renowned events, the annual Hajj.The World Health Organization warned Friday that cholera could pose a "serious risk" to the millions of Muslims from all over the world descending on Mecca in September to perform annual the pilgrimage."The current highly spreading outbreak of cholera in Yemen, as well as in some African countries, may represent a serious risk to all pilgrims during the [hajj] days and even after returning to their countries," the WHO bulletin said.Saudi Arabia's Ministry of Health has taken extensive precautionary measures to secure the Hajj from epidemics, establishing a Command and Control Center to monitor suspicious cases, requiring vaccinations, and even suggesting wearing face masks. In the past, it has been known for requiring pilgrims to submit to health screenings, even setting up thermal cameras to monitor body temperature.The cholera epidemic in Yemen is currently the worst in the world. Since April, cholera has swept through Yemen, killing one person every hour and infecting over over 300,000, with thousands more confirmed cases every day. Health officials attempting to curb Yemen's ravaging outbreak believe the crisis could have been preventable, but instead was exacerbated by crippled medical facilities, a shortage of supplies, and damaged transport infrastructure. "This deadly cholera outbreak is the direct consequence of two years of heavy conflict," Unicef and the World Health Organization said in a joint statement in June. "Collapsing health, water, and sanitation systems have cut off 14.5 million people from regular access to clean water and sanitation, increasing the ability of the disease to spread."

Qatar Warms Up to Iran on Natural Gas -- The world’s biggest gas field lies between Qatar and Iran, and the half-competitive, half-cooperative race to exploit it has taken a new turn. For both countries, this enormous resource is also a source of political power. Now, with the emirate at odds with Tehran’s foe, Saudi Arabia, its tacit cooperation with Iran is gaining, even as the two are set to compete more intensely in gas markets. In 2005, Qatar imposed a moratorium on further development of the North Field, saying it needed to study the reservoir. That moratorium has only just been lifted -- but a field study does not take 12 years. There were good commercial reasons to halt -- the LNG market was becoming oversupplied and domestic construction capability was overstretched. Saudi pressure blocked new pipelines to Bahrain and Kuwait, which even made difficulties over the route of the Dolphin pipeline. But there has also been suspicion that the Iranians warned Doha to stop new projects that they felt would start draining “their” gas. Since 2014, Iran’s production has been gaining rapidly as long-delayed phases of South Pars, awarded to domestic contractors who were hampered by sanctions and financing problems, have finally been completed. By 2020, Iran’s output from South Pars will exceed Qatar’s from the North Field. The contract that Total and China National Petroleum Corporation signed on July 3 for Phase 11 is a crucial part of Iran’s strategy, as the first deal awarded under the new Iran Petroleum Contract, designed to attract foreign investment following the lifting of nuclear-related sanctions at the start of last year. The production will initially go to the domestic market, but later could support Iran’s first LNG export project. It is a key public relations win for both post-sanctions Iran and for the administration of recently re-elected President Hassan Rouhani. This came only two months after Qatar announced the end of its moratorium, with the beginning of a new gas production project. Just a day after the signature of the South Pars Phase 11 deal, Qatar Petroleum Chief Executive Saad Sherida Al Kaabi said its new project would double in size, raising total LNG export capacity by 30 percent to 100 million metric tons per year by about 2023, maintaining it as the world’s largest, outpacing Australia and the U.S.

Iran Dominates in Iraq After U.S. ‘Handed the Country Over’ - NYT - Walk into almost any market in Iraq and the shelves are filled with goods from Iran — milk, yogurt, chicken. Turn on the television and channel after channel broadcasts programs sympathetic to Iran. A new building goes up? It is likely that the cement and bricks came from Iran. And when bored young Iraqi men take pills to get high, the illicit drugs are likely to have been smuggled across the porous Iranian border. And that’s not even the half of it. Across the country, Iranian-sponsored militias are hard at work establishing a corridor to move men and guns to proxy forces in Syria and Lebanon. And in the halls of power in Baghdad, even the most senior Iraqi cabinet officials have been blessed, or bounced out, by Iran’s leadership. When the United States invaded Iraq 14 years ago to topple Saddam Hussein, it saw Iraq as a potential cornerstone of a democratic and Western-facing Middle East, and vast amounts of blood and treasure — about 4,500 American lives lost, more than $1 trillion spent — were poured into the cause. From Day 1, Iran saw something else: a chance to make a client state of Iraq, a former enemy against which it fought a war in the 1980s so brutal, with chemical weapons and trench warfare, that historians look to World War I for analogies. If it succeeded, Iraq would never again pose a threat, and it could serve as a jumping-off point to spread Iranian influence around the region. In that contest, Iran won, and the United States lost. 

Why Isis Fighters Are Being Thrown Off Buildings in Mosul --  Iraqi security forces kill Isis prisoners because they believe that if the militants are sent to prison camps they will bribe the authorities in Baghdad to release them. “That is why Iraqi soldiers prefer to shoot them or throw them off high buildings,” says one Iraqi source. A former senior Iraqi official said he could name the exact sum that it would take for an Isis member to buy papers enabling him to move freely around Iraq. The belief by Iraqi soldiers and militiamen that their own government is too corrupt to keep captured Isis fighters in detention is one reason why the bodies of Isis suspects, shot in the head or body and with their hands tied behind their backs, are found floating in the Tigris river downstream from Mosul. Revenge and hatred provoked by Isis atrocities are motives for extrajudicial killings by death squads, but so is distrust of an Iraqi judicial system, which is notoriously corrupt and dysfunctional. Paranoia at the end of a very violent war partially explains why so many Iraqis are convinced that dangerous Isis members can always bribe their way to freedom. Dozens of posts on social media from Baghdad allege that suicide bombers who blow themselves up killing many civilians had previously been detained by the security forces and released in return for money. “We die in Baghdad because of corruption,” reads one post, frequently shared with others. One tweet says: “Daesh [Isis] pays the government and kills us in Baghdad.”

New reports indicate ISIS leader still alive | TheHill: The Pentagon could not confirm on Monday new reports that the leader of the Islamic State in Iraq and Syria (ISIS) is still alive, following reports of his death last week. A top Kurdish counterterrorism official told Reuters on Monday that he was 99 percent sure that ISIS leader Abu Bakr al-Baghdadi was alive and south of Raqqa in Syria. “Baghdadi is definitely alive. He is not dead. We have information that he is alive,” Lahur Talabany told Reuters.But Pentagon spokesman Jeff Davis told reporters that it has “no information one way or the other about Baghdadi’s whereabouts or his status.” The monitoring group Syrian Observatory for Human Rights last week claimed to have verified his death. “Obviously we consider him somebody who we would like to see dead as the leader of ISIS, but we don’t have anything one way or the other,” Davis said. 

Photos Of Aleppo Rising: Swimsuits, Concerts And Rebuilding In First Jihadi-Free Summer -- When taxi and bus drivers take journalists into Syria via the Beirut-Damascus Highway these days, there's a common greeting that has become a kind of local tradition as the drivers pull into their Damascus area destinations. They confidently tell their passengers: "welcome to the real Syria." Local Syrians living in government areas are all too aware of how the outside world perceives the government and the cities under its control. After years of often deceptive imagery and footage produced by opposition fighters coordinating with an eager Western press bent on vilifying Assad as "worse than Hitler", many average Syrian citizens increasingly take to social media to post images and scenes of Syria that present a different vision: they see their war-torn land as fundamentally secular, religiously plural, socially tolerant, and slowly returning to normalcy under stabilizing government institutions.

Israel Rejects Cease-fire Deal Between U.S. And Russia In South Syria - One month after the WSJ reported that Israel had been secretly funding the Syrian rebel opposition to Assad's regime for years in hopes of keeping the Syrian political situation unstable and preventing the Syrian - and Iranian - regime's military from becoming a substantial threat, overnight Israel Prime Minister Benjamin Netanyahu told reporters after his meeting with French President Emmanuel Macron on Sunday that Israel opposes the cease-fire agreement in southern Syria that the United States and Russia reached "because it perpetuates the Iranian presence in the country."Quoted by Haaretz, a senior Israeli official said Israel "is aware of Iranian intentions to substantially expand its presence in Syria", and added that Iran is not only interested in sending advisers to Syria but also in dispatching extensive military forces including the establishment of an airbase for Iranian aircraft and a naval base. "This already changes the picture in the region from what it has been up to now," the official said.Which considering that most if not all of Syria's victories in the ongoing parallel proxy wars with both ISIS and the various "moderate" and not so "moderate" rebel groups were courtesy of Iran and specifically the IRGC, is to be expected. Still, by openly voicing his opposition to one of the most significant moves the United States and Russia have made in Syria in recent months, Netanyahu made public a major disagreement between Israel and the two great powers that had until now been kept under wraps and expressed only through quiet diplomatic channels. Netanyahu said he had discussed the cease-fire deal with U.S. Secretary of State Rex Tillerson by phone Sunday night. As a reminder, Donald Trump and Vladimir Putin agreed on the cease-fire on the sidelines of the G20 summit in Hamburg last week. In a tweet published shortly after the truce came into effect last week, Trump tweeted: "We negotiated a ceasefire in parts of Syria which will save lives. Now it is time to move forward in working constructively with Russia!"

Turkey Begins Bombing US-Backed YPG Positions In Syria --It started two weeks ago, when Turkey warned publicly it was preparing for military intervention in Syria, while accusing the US of creating a "terrorist army" (it wasn't referring to ISIS, but US-backed Syrian Kurdish militia YPG). As a reminder, YPG forms a major part of the U.S.-backed campaign to capture Islamic State's stronghold of Raqqa, and whose forces are seen as a terrorist organization by Turkey. The group currently controls a pocket of territory in Afrin, about 200 km (125 miles) west of Raqqa.Tensions between Turkish forces and the YPG have been mounting in the Afrin region in recent weeks: Turkey's military, which launched an incursion last August into part of northern Syria which lies between Afrin and a larger Kurdish-controlled area further east, has said that it has returned fire against members of YPG militia near Afrin several times in the last few weeks.Furthermore, last month the Turkish defence ministry slammed the Pentagon decision to arm theYPF, and mocking Washington's assurances that it would retrieve weapons provided to the YPG after Islamic State fighters were defeated: "There has never been an incident where a group in the Middle East has been armed, and they returned the weapons," Kurtulmus said. The United States "have formed more than a terrorist organisation there, they formed a small-scale army."  Then overnight, Ilnur Cevik, a senior adviser to President Recep Tayyip Erdogan, spoke to Bloomberg and said that while Turkey has no immediate plans for an operation in the Syrian Kurdish-run region of Afrin, its army is preparing for action and the military buildup on the border is “serious."

Pentagon Furious After Turkey Leaks U.S. Base Locations In Syria: "Hard Not To See This As A F-You" - In a move that has angered the U.S. for obvious reason, Turkey’s state-run news agency Anadolu Agency has leaked the precise locations of U.S. bases in northern Syria. The move - which exposes the exact locations of American soldiers on the front lines in the war-torn nation - has sent the ongoing feud between the two NATO allies to new lows. As Bloomberg details, in reports published in both Turkish and English on Tuesday, Anadolu provided detailed information about 10 U.S. bases in northern Syria, including troop counts and a map of the U.S. force presence in the Turkish version.   The reports said that the military outposts are “usually hidden for security reasons, making it hard to be detected.” It said they were located “in the terrorist PKK/PYD-held Syrian territories,” a reference to Kurdish groups that Turkey’s government considers terrorist organizations.   Needless to say, the Pentagon was furious.  According to the Daily Beast, Washington was so incensed that it even tried to prevent US media from reprinting the story, after it had already appeared in the Turkish media.“The discussion of specific troop numbers and locations would provide sensitive tactical information to the enemy which could endanger Coalition and partner forces,” Colonel Joe Scrocca, director of public affairs for Operation Inherent Resolve, reportedly wrote to the New York-based Daily Beast, which was the only major US outlet to pick up the story by Wednesday morning.

NATO Member Turkey Turns To Russia For Air Defense Cooperation -- Turkey has agreed to pay $2.5 billion to acquire S-400 – the Russia-made most advanced long-range missile defense system in the world. Russian President Vladimir Putin has already said that Moscow is ready to sell it. According to Russian Presidential Adviser for Military and Technical Cooperation Vladimir Kozhin, Russia’s contract with Turkey has been agreed in general, with financial details still to be ironed out. The system is capable of intercepting all types of modern air weaponry, including fifth-generation warplanes, as well as ballistic and cruise missiles at a maximum range of nearly 250 miles.According to the preliminary agreement, Ankara is to receive two S-400 missile batteries within the next year, and then produce another two inside Turkey, although the Turkish defense industry has no experience of producing such systems. Not yet.Unlike NATO’s US-made Patriots temporarily deployed in Turkey some time ago, the Russian S-400 deal has no political strings attached, and could, potentially, boost Turkey’s defense industry bringing Russian-Turkish military cooperation to an unprecedented level. The two nations will work together for many years and the process is likely to encompass other areas of interaction. Last year, Russia and Turkey signed a declaration on partnership in defense industry.The parties agreed to form a joint military and intelligence mechanism to coordinate their activities in the Middle East. Ankara also seeks procurement deals with Russia in electronic systems, ammunitions and missile technology.

The New Silk Road Will Go Through Syria – Pepe Escobar - Amid the proverbial doom and gloom pervading all things Syria, the slings and arrows of outrageous fortune sometimes yield, well, good fortune. Take what happened this past Sunday in Beijing. The China-Arab Exchange Association and the Syrian Embassy organized a Syria Day Expo crammed with hundreds of Chinese specialists in infrastructure investment. It was a sort of mini-gathering of the Asia Infrastructure Investment Bank (AIIB), billed as “The First Project Matchmaking Fair for Syria Reconstruction”. And there will be serious follow-ups: a Syria Reconstruction Expo; the 59th Damascus International Fair next month, where around 30 Arab and foreign nations will be represented; and the China-Arab States Expo in Yinchuan, Ningxia Hui province, in September. Qin Yong, deputy chairman of the China-Arab Exchange Association, announced that Beijing plans to invest $2 billion in an industrial park in Syria for 150 Chinese companies. Nothing would make more sense. Before the tragic Syrian proxy war, Syrian merchants were already incredibly active in the small-goods Silk Road between Yiwu and the Levant. The Chinese don’t forget that Syria controlled overland access to both Europe and Africa in ancient Silk Road times when, after the desert crossing via Palmyra, goods reached the Mediterranean on their way to Rome. After the demise of Palmyra, a secondary road followed the Euphrates upstream and then through Aleppo and Antioch.

China June oil refinery throughput close to record  (Reuters) - China's oil refineries ramped up throughput in June to the second highest on record, with some independent plants raising output even as state oil majors prepare to take drastic steps to cut production during the peak summer season. Throughput last month reached 46.08 million tonnes, or 11.21 million barrels per day (bpd), a 2.3-percent rise year-on-year and up from May's 10.98 million bpd, data from the National Bureau of Statistics (NBS) showed on Monday. That was just shy of December's record volume of 11.26 million bpd. The higher throughput came after another month of strong crude oil imports and as top refineries prepared to cut output in the third quarter. "Refinery runs were impressive considering that refinery maintenance was still heavy," said Nevyn Nah, analyst at Energy Aspects. Independent refiners, known as 'teapots', raised their runs after receiving additional crude import quotas, while oil majors kept their throughput roughly flat year on-year, he said. For the first six months, refinery production in the world's second-largest fuel consumer gained 3 percent from a year earlier to 275.21 million tonnes, or about 11.1 million bpd. Upcoming cuts to production by the oil majors will not be as deep as many in the market expect, added Nah, because the planned cuts were from very high levels in the first quarter. The NBS data on Monday also showed domestic crude oil output fell 2.3 percent last month versus a year ago to 16.21 million tonnes, or 3.94 million bpd, but up from May's 3.83 million bpd. Output during the January-June period was down 5.1 percent on-year at about 3.89 million bpd.

North Korea's Fuel Prices Soar After China Suspends Exports -- Diesel and gasoline prices in North Korea have jumped since China National Petroleum Corp (CNPC) halted sales of fuel to Pyongyang, Reuters reported on Monday, citing data on prices collected by North Korean defectors. At the end of last month, reports emerged that CNPC, the main supplier of diesel and gasoline to North Korea, has suspended fuel sales to North Korea because it is worried that it may not receive payments.North Korea imports all the oil and oil products it consumes - mostly from China - and a prolonged suspension by CNPC would choke out supplies at a time when the international community is increasing pressure on North Korea to stop its nuclear and missile ambitions, and is intensifying checks over Chinese business relations with Pyongyang.According to a Reuters analysis of data by the Daily NK website - which is run by North Korean defectors who collect price data via phone calls with fuel traders in North Korea - private dealers in the north were selling gasoline at US$2.18 per kilogram, or US$2.92 per liter, as of July 5, a 50-percent surge compared to US$1.46 per kg on June 21. Gasoline prices fell slightly to US$2.05 per kg by July 12, but still, they were more than double compared to prices at the beginning of the year, Reuters’ analysis of the data shows.   Diesel prices jumped by 20 percent in the three weeks to July 12. After the initial price surges in early July, prices of both diesel and gasoline have stabilized, probably because North Korea has encouraged fuel smuggling across the Chinese border, according to defector Kang Mi-jin who is in communication with traders in North Korea.

Rare Earth Mania And China/US Trade Spat 2.0? -- We doubt that many have heard of it, or know what it’s used for, but the price of Praseodymium-Neodymium (sold in oxide form) has been on a tear, up 43% ytd.Neodymium and Praseodymium, collectively known as NdPr, are two of the family of seventeen rare earth elements (REEs). The price of several other REEs, like Terbium – Ticker SHRATBOX (really) and also used in very powerful permanent magnets - have been rising too (up 36% ytd).  Unfortunately for the rest of the world, especially the US, China has a monopoly on the rare earths market with 85-90% of global production.  REEs are strategically important due to their (small but critical) applications in products used for the defense and technology sectors - including today’s mainstay of human existence, the mobile phone. China’s dominance arose from undercutting almost every other mining and processing player in the decades prior to its WTO entry.The current story behind the higher prices is that China is getting serious (again) about the environmental impact of REE mining, and is making renewed efforts to curb significant levels of illegal production. On Monday, managing director of Australian-based rare earth producer, Lynas Corp (who just happened to note how her company is “highly leveraged to any increase in price for NdPr”) commented.“Demand has always been strong, growth for the magnetic materials will increase as there is greater adoption, particularly for electric vehicles…(and) wind turbines. The second thing, however is that the Chinese central government has been very active over the last six months in ensuring that a lot of what had been announced recently, has actually been enforced on the ground…they have inspected a lot of plants to ensure that they have proper documentation for their raw materials and that has helped to eliminate illegal supply.”  Adding insult to injury for its strategic interests, the last remaining rare earth mine in the United States, Mountain Pass in California, has recently been sold to a consortium including Shenghe Resources Holding, which has alleged ties to the Chinese Government.

China's steel, aluminum output at record as U.S. mulls penalties - (Reuters) - China churned out record amounts of steel and aluminum in June as producers rushed to cash-in on rallying prices in the wake of a drive by Beijing to crack down on output of low-grade metal. That could fuel concerns the world's top steel producer will export more metal, stoking global oversupply and fanning tensions with the United States after it accused the nation of flooding international markets with cheap aluminum and steel. U.S. President Donald Trump has threatened to use a Cold War-era law to restrict imports for national security reasons as bilateral talks between Washington and Beijing continue. China has long-denied that it has been offloading metals abroad at the expense of foreign producers. Chinese steel output last month rose 5.7 percent from the year before to a record 73.23 million tonnes, surpassing April's all-time high of 72.78 million tonnes, data from the National Statistics Bureau showed on Monday. Aluminum production jumped 7.4 percent year-on-year to 2.93 million tonnes, exceeding December's record of 2.89 million tonnes. Export data last week showed steel products shipments fell last month, while aluminum sales abroad were steady. But analysts said the latest numbers should not be seen as provocative move ahead of a decision by the United States on possible import tariffs. "It's wrong to think that this is some sort of unified, homogenous voice that is deliberately making some provocative statement to the U.S," 

China reports Q1 GDP: China's economy grew 6.9 percent in the first quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a frenzied housing market that is showing signs of overheating. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the first quarter, the same pace as in the fourth quarter of 2016. The first-quarter growth pace was the fastest since the third quarter of 2015. The government is aiming for growth of around 6.5 percent in 2017, slightly lower than last year's target of 6.5-7 percent and the actual 6.7 percent, which was the weakest pace in 26 years. While China's data has been largely upbeat so far this year, many analysts widely expect the world's second-largest economy to lose steam later in the year as the impact of earlier stimulus measures starts to fade and as local authorities step up their battle to rein in hot housing prices. Gross domestic product (GDP) in January-March rose 1.3 percent quarter-on-quarter from the previous three months, compared with growth of 1.7 percent in October-December, the National Bureau of Statistics said on Monday.

China stocks plunge on ‘Black Monday’, with nearly 500 stocks falling by daily limit of 10pc | South China Morning Post: More than 2,800 stocks fell across Chinese markets on “Black Monday”, with nearly 500 dropping by their daily limit of 10 per cent, as a financial work conference of the Chinese top leadership sparked fears that the financial sector will face a prolonged period of increased scrutiny. The sentiment also took a further blow as a flurry of listed companies on the start-up board had warned of significant losses in the first half, including the troubled Leshi Internet Information & Technology. Over 1,200 stocks declined by more than 7 per cent on the Shanghai and Shenzhen stock exchanges on what analysts dubbed as “Black Monday”. Combined daily turnover for Shanghai and Shenzhen soared 48 per cent to 570 billion yuan from the previous session. Stocks listed on the Shenzhen exchange, which feature more smaller-cap companies from the technology and consumption sector, suffered the most. The ChiNext Index closed down 5.1 per cent at 1,656.43, the worst level in two and half years. The Shenzhen Composite Index sank 4.3 per cent to end at 1,800.54. The Shenzhen Component Index declined 3.6 per cent to 10,055.8. The benchmark Shanghai Composite Index also fell 1.4 per cent to 3,176.46, the steepest daily percentage drop in more than seven months. “This is a Black Monday,” said Wang Haijun, an analyst for Shanghai-based Zhongshan Securities. “The panic is sweeping across the markets, sparked by a plunge in the start-up board.”

Chinese purchases of overseas ports top $20bn in past year -- China is ramping up acquisitions of overseas ports as it expands its reach as a maritime power, doubling its investments over the past year to $20bn and pushing ahead with plans to open new shipping routes through the Arctic circle.  The locations of the ports in which China is investing cluster around three “blue economic passages” that Beijing named in June as crucial to the success of “One Belt One Road”, a grand scheme to win diplomatic allies and open markets in around 65 countries between Asia and Europe. A study by Grisons Peak, a London-based investment bank, found that Chinese companies have announced plans to buy or invest in nine overseas ports in the year to June in projects valued at a total of $20.1bn. In addition, discussions are under way for investments in several other ports, for which no value has been divulged. This level of activity represents a sharp acceleration from the $9.97bn in Chinese overseas port projects in the year-ago period, according to Financial Times estimates.

Japan gov't says to miss primary surplus goal, debt/GDP ratio to fall - Nasdaq.com: (Reuters) - Japan's government said on Tuesday that even under its most optimistic forecasts it still expects to miss its goal of returning to a primary budget surplus in fiscal 2020 as tax revenue grows slightly less than expected. The forecasts, approved by the government's top advisory panel, also showed the ratio of debt to nominal gross domestic product is expected to fall faster than previously forecast as economic growth picks up pace. The figures could add to speculation that the government will phase out the primary budget goal and focus more attention on the debt/GDP ratio because this is easier to lower and places less restrictions on government spending. Prime Minister Shinzo Abe's government agreed last month to make lowering the ratio of debt/GDP ratio a new fiscal discipline target, which makes it easier to avoid spending cuts as long as the economy keeps growing. The government said it was not abandoning its previous target of reaching a primary budget surplus in fiscal 2020, which excludes debt servicing costs and bond sales, but many economists have written this off after repeated delays in raising the nationwide sales tax. The primary budget deficit will total 8.2 trillion yen ($72.37 billion) or 1.3 percent of GDP in fiscal 2020, according to forecasts published by the Cabinet Office.

Japan Central Bank's ETF Shopping Spree Is Becoming a Worry -- Some officials at the Bank of Japan are increasingly concerned about the sustainability of the BOJ’s purchases of exchange-traded funds, according to people familiar with discussions at the central bank. But the chances of any change at this week’s policy meeting are low, they said, with no need for an immediate change to the program. Concerns include the risk that the central bank could end up owning such large amounts of the free-floating shares of some listed companies in the Nikkei-225 Stock Average that it could seriously distort the market, according to the people, who declined to be identified because the talks are private. Still, they say it’s unlikely the matter will be discussed in detail at the two-day policy meeting ending July 20. If the BOJ were to make a change sometime down the road, it could increase the proportion of purchases in the broader Topix stock index while cutting back on the Nikkei, said the people, rather than reducing the overall quantity of purchases. The timing of any such change would depend on a range of conditions, including the state of the economy and inflation, and possibly the extent of public criticism of its ETF buying, they said. 

Beijing criticizes Indonesia renaming part of South China Sea -- CNN- Indonesia has become the latest Southeast Asian nation to ruffle China's feathers over the South China Sea.In an act of defiance against Beijing's territorial ambitions in the region, Indonesia will refer to the northern areas of its exclusive economic zone in the South China Sea as the "North Natuna Sea."At a press conference in Jakarta, Deputy Minister for Marine Sovereignty Arif Havas Oegroseno unveiled a new map with the renamed territory."We need to continue updating the naming of the sea and report to the United Nations about the borders," Oegroseno told Indonesia's state-run news agency Antara."This (system) would allow the international community to know whose territory they pass through," he added.Part of the renamed area falls in China's "nine-dash line" -- waters extending hundreds of miles to the south and east of China's island province Hainan. Dotted with hundreds small islands, reefs and shoals, the South China Sea is a crucial shipping route and believed to be rich in natural resources, such as oil and gas.China claims the entirety of the sea, but Vietnam, Taiwan, the Philippines, Brunei and Malaysia all have competing territorial claims to parts that are near their respective shores.

The Political Geography of the India-China Crisis at Doklam - Starting in June, a tiny piece of strategically important and until-now obscure Himalayan territory sitting at the intersection of India, China, and Bhutan became the site of the one of the most serious border standoffs between New Delhi and Beijing in three decades. As of July 12, 2017, the standoff continues, with no end in sight. Scores — potentially hundreds — of Indian Army and Chinese People’s Liberation Army troops remain at an impasse near the Doka La pass in Doklam. Nearly one month after the standoff began, details about the geography of the area and the motivations of all three governments involved remain murky.In the meantime, rhetoric in India and China has reached a slow simmer, with op-ed writers and commentators taking pains to highlight the other side’s transgressions. On both sides, suggestions of a new war or military skirmish between the two nuclear-armed Asian neighbors, both with populations in excess of 1 billion, are slowly becoming less taboo, highlighting the potential for serious escalation. If anything is clear about this crisis, it’s that the stakes are high. Unfortunately, nearly everything else about the terrain under contention and the events that initiated the standoff remains unclear. This marks the first in a series of articles I’ll be authoring for The Diplomat outlining the various elements of this standoff. Though I’ll elaborate in successive articles, the dispute began in early June when Chinese People’s Liberation Army (PLA) engineers began constructing a road near the Indian border on a piece of territory disputed between China and Bhutan. India, perceiving this as an unacceptable change to the status quo with potentially serious strategic ramifications, crossed a settled and undisputed international border with its troops to block the PLA contingent from proceeding. The Chinese government was apoplectic about what it saw as an Indian incursion across a settled border into Chinese territory (in reality, disputed with Bhutan) and has given an ultimatum to New Delhi that no diplomatic solution can be found until Indian troops unilaterally withdraw from what Beijing sees as Chinese territory. India, in the meantime, is not budging. Both sides are gridlocked and tensions are rising.

High Noon in the Himalayas: Behind the China-India Standoff at Doka La - If you’re struggling to make sense of the latest standoff between the Chinese and Indian militaries 10,000 feet in the Himalayas, don’t fret: You’re in good company. The showdown at Doka La is the product of a multi-layered, multi-party dispute steeped in centuries-old treaties and ambiguous territorial claims. Only recently have sufficient details emerged to piece together a coherent picture of the crisis and we’re still left with more questions than answers. However, one thing is clear: While stare-downs at the disputed China-India border are a common affair, the episode now underway is an altogether different, potentially far more dangerous, beast. This crisis began in mid-June when Chinese forces were spotted constructing a road near the disputed tri-border linking India, China, and Bhutan, prompting an intervention by Indian troops in nearby Sikkim. Nearly a fortnight later, over 100 soldiers from each side are eyeball-to-eyeball, with India moving thousands more into supporting areas. Each passing week has seen a further hardening of each side’s position.On July 5 China’s ambassador to India, Luo Zhaohui, described the situation as “grave” and insisted and there was “no scope for compromise.” A vitriolic outburst from China’s Global Times followed, accosting “Cold War-obsessed India” for “humiliating the civilization of the 21st Century.” It mused: [T]he face-off in the Donglang area will end up with the Indian troops in retreat. The Indian military can choose to return to its territory with dignity, or be kicked out of the area by Chinese soldiers…India will suffer greater losses than in 1962 if it incites military conflicts. We hope India can face up to the hazards of its unruly actions to the country’s fundamental interests and withdraw its troops without delay… The more unified the Chinese people are, the more sufficient conditions the professionals will have to fight against India and safeguard our interest. This time, we must teach New Delhi a bitter lesson. India’s Ministry of External affairs has been less strident but sent a clear signal about the stakes by claiming China’s activities “would represent a significant change of [the] status quo with serious security implications.”

 Sikkim stand-off could escalate into full-scale conflict, warns China - China has launched a high-stakes propaganda blitz, painting India as the aggressor and holding out the threat of a full-scale confrontation, as the two countries face off on the Bhutanese Doklam plateau. Worried about being seen bullying a small country like Bhutan, it is desperate to blame India for the stand-off on the border. China confirmed on Tuesday it was connecting with foreign missions to explain its version of the Doklam controversy, though it did not name any country or group of countries being briefed by it, even other P-5 members of the UN Security Council. Three of the five members of the UN Security Council — the US, Britain, and France — confirmed to TOI that they did not attend any group briefing by the Chinese on the border stand-off with India. It is not clear if the Chinese officials held a separate briefing for envoys of Russia, which is seen to be close to China these days.The illegal trespass by the Indian border personnel has drawn extensive attention from the international community and many foreign diplomatic missions in China said they were shocked... and we also stressed [that] the facts are very clear in this incident," Chinese foreign ministry spokesman Lu Kang said. He accused India of playing politics on the Doklam issue.

Dragon-elephant showdown not inevitable -  (Xinhua) -- Behind the ongoing border standoff caused by Indian troops' trespass into Chinese territory, is an ill-conceived notion of dragon-elephant rivalry that has grown into a major global topic. Where does the confrontational idea come from? The China-India comparison emerged as early as in the 2000s, and was elaborated by scholars and media from the United States and Britain. The book "The Dragon and the Elephant: China, India and the New World Order", written by Sunday Times journalist David Smith, formally presented the idea to the world. The Financial Times even has a special page for "dragon-elephant rivalry." It is fair to say that the concept of China and India being nemeses to each other was cooked by the West, a smart move, pitting the two biggest future competitors of the West against each other. So who stands to win from a possible India-China war? At least no one in Asia. Obviously the two would pay a heavy price first of all. Even Japan, the U.S. ally who relies heavily on the Chinese market, would suffer an economic blow, which could turn into a domestic crisis. Most economies, including those in the West, will find themselves negatively affected by an India-China war in a globalized and intertwined world today. The only beneficiaries, sadly, will be opportunists, short-sighted nationalist politicians who don't really have the people's interests in heart. And the dream of an Asian century would become a puff of wind.

Afghan civilian deaths hit new high in 2017: UN - (AFP) - Civilian deaths in Afghanistan hit a new high in the first half of 2017 with 1,662 killed and more than 3,500 injured, the United Nations said Monday. Deaths in the capital Kabul accounted for nearly 20 percent of the toll, according to the report by the UN Assistance Mission in Afghanistan (UNAMA), which has been documenting civilian casualties in the war-torn country since 2009. The majority of the victims were killed by anti-government forces — including the Taliban and in attacks claimed by the Islamic State, the report said. The first six months of the year has seen a significant rise in the number of civilian lives lost in highly coordinated attacks involving more than one perpetrator, with 259 killed and 892 injured — a 15 percent increase on the same period last year. Many of those deaths happened in a single attack in Kabul in late May when a truck bomb exploded during the morning rush hour, killing more than 150 people and injuring hundreds. UNAMA put the civilian death toll at 92, saying it was the deadliest incident to hit the country since 2001. "The continued use of indiscriminate, disproportionate and illegal improvised explosive devices is particularly appalling and must immediately stop,"

Colombia Produces Record Cocaine Crop For 2nd Straight Year -- We didn’t need any more data to definitively expose the many shortcomings of the US-led global prohibition on narcotics – but we got one today, courtesy of the United Nations Office on Drugs and Crime.New figures show that cocaine production in Colombia reached an all-time high for the second straight year in 2016, as coca cultivation in the South American country surged 52 percent, spanning 146,000 hectares, compared with 96,000 in 2015. The 2016 crops produced an estimated 866 metric tons of cocaine, an increase of 35 percent compared to 2015. Meanwhile, cocaine use appears to be increasing in the two largest markets, North America and Europe. While the UNODC said the survey results were “disappointing,” it noted that there were “some positives” in the report, including an increase of 49 per cent in seizures of cocaine -from 253 tons confiscated in 2015 to 378 tons in 2016. Of course, each seizure inevitably means some low-level trafficker – possibly working under the threat of violence – is being jailed, at an enormous cost to the public, while the seizure has little impact on the larger organization.

Average Canadian house worth $504,458 in June, down 10% since April - Business - CBC News: Home sales fell in June by their largest amount in seven years, the Canadian Real Estate Association said Monday, as nearly three-quarters of all markets slowed down during what is normally the most popular time of the year for real estate. DON PITTIS: Sniffing out the truth about Canada's housing market is tricky CREA said home sales fell by 6.7 per cent last month compared to May — the sharpest monthly decline since 2010 and the third straight monthly contraction.Home sales have now fallen 14 per cent since peaking in March. The April to June period is typically a busy time for home sales as the warmer weather tends to bring out buyers.More than 70 per cent of all markets saw fewer homes sold in June than they did in May. But Ontario makes up a large percentage of Canada's housing market, and new rules aimed at slowing the housing market in and around Toronto starting in April appear to be impacting the national numbers."Changes to Ontario housing policy made in late April have clearly prompted many home buyers in the Greater Golden Horseshoe region to take a step back and assess how the housing market absorbs the changes," said CREA's chief economist, Gregory Klump. "The recent increase in interest rates could reinforce a lack of urgency to purchase or, alternatively, move some buyers off the sidelines before their pre-approved mortgage rate expires." While sales have dropped, prices on average are flat on an annual basis. The average price of a Canadian home sold in June was $504,458, a 0.4 per cent increase in the past year.  But that figure has dropped by nearly 10 per cent from the $559,317 average price in April.

China’s navy expands reach: Ships in Baltic for drills with Russia -One of China's most-advanced warships is leading a small flotilla to the Baltic Sea, where it will engage in exercises with the Russian Navy. The Russian and Chinese defense ministries have confirmed the participation of a Chinese guided-missile destroyer in the week-long war games, the first-ever joint operation by the two powers in European waters, according to a report on the People's Liberation Army's official website. Training will include anti-submarine warfare and air defense drills, the Russian Ministry of Defense said. Russian naval facilities in the enclave of Kaliningrad, sandwiched between NATO allies Poland and Lithuania, have been selected as the headquarters for the exercise. China said the joint drills would be the first for the Type 052D destroyer Hefei, which was commissioned less than two years ago. It's being joined by a missile frigate, a supply ship and about 10 Russian ships. That China is sending warships halfway around the world -- unthinkable as little as 10 years ago -- is not going unnoticed among NATO allies. British, Dutch and Danish warships have at various times been escorting the Chinese flotilla as it made its way to the drills through the English Channel and across the North Sea. The choice of the Baltic Sea is also significant, say analysts. The area remains a source of heightened tension between Russia and the US and its NATO allies -- China's arrival in the waters signals its intention to be considered equal to those powers.

U.S. general says allies worry Russian war game may be ‘Trojan horse’ (Reuters) - U.S. allies in eastern Europe and Ukraine are worried that Russia's planned war games in September could be a "Trojan horse" aimed at leaving behind military equipment brought into Belarus, the U.S. Army's top general in Europe said on Thursday. Russia has sought to reassure NATO that the military exercises will respect international limits on size, but NATO and U.S. official remain wary about their scale and scope. U.S. Army Lieutenant General Ben Hodges, who heads U.S. Army forces in Europe, told Reuters in an interview that allied officials would keep a close eye on military equipment brought in to Belarus for the Zapad 2017 exercise, and whether it was removed later. "People are worried, this is a Trojan horse. They say, 'We're just doing an exercise,' and then all of a sudden they've moved all these people and capabilities somewhere," he said. Hodges said he had no indications that Russia had any such plans, but said greater openness by Moscow about the extent of its war games would help reassure countries in eastern Europe.

 Little Russia: Ukraine separatists proclaim new state | DW | 18.07.2017: All of Ukraine, minus Crimea, has been declared a new state by Donetsk separatists in the east. Their new nation of 'Malorossiya' has a flag and a map. Germany has condemned it as "completely unacceptable."Alexander Zakharchenko, leader of the self-proclaimed Donetsk People's Republic (DNR) has announced plans for a new, federal state to replace the current Ukraine. The pro-Russian rebels plan to hold a referendum calling for the creation of a new state to be known as Malorossiya, which translates as "Little Russia." In a statement published on the rebel-aligned Donetsk News Agency, the DNR leader Zakharchenko said that the new state would aspire to include not only the areas under insurgent control but also the rest of Ukraine. Map showing Ukraine's capital Kiev in the west and Donetsk, Luhansk in the east Ukraine's envoy for negotiations with the rebels, Yevgen Marchuk, told local media that Tuesday's announcement "could block the negotiations entirely." The German government told DW that "a solution to the conflict could only be achieved through negotiation" and that "Russia, the Russian-backed separatists and Ukraine have all committed" to the Minsk agreement. Responding to an email inquiry, a spokesperson for the federal government told DW: "Zakharchenko has no legitimacy to speak on behalf of Ukraine. We expect Russia to also immediately condemn this step, and that it neither respects nor even acknowledges it." 

Separatists proclaim new state to replace Ukraine - Independent.ie: Separatists in eastern Ukraine have proclaimed a new state that aspires to include not only the areas they control but also the rest of Ukraine. The surprise announcement in the rebel stronghold of Donetsk casts further doubt on the 2015 ceasefire deal that was supposed to stop fighting in Ukraine's industrial heartland and bring those areas back into Kiev's fold while granting them wide autonomy. It also caught unawares some rebels who said they have no intention of joining the new state. More than 10,000 people have died in fighting since Russia-backed rebels took control of parts of Ukraine's Donetsk and Luhansk regions in April 2014 after Moscow annexed Ukraine's Crimean peninsula. The rebels originally sought to join Russia but the Kremlin stopped short of annexing the whole area or publicising its military support for the rebels. Donetsk separatist leader Alexander Zakharchenko said in comments broadcast on Russian television that rebels in Donetsk and Luhansk as well as representatives of other Ukrainian regions would form a state called Malorossiya. Most of the areas which are part of Ukraine were referred to as Malorossiya, or Little Russia, when they were part of the Russian Empire. Mr Zakharchenko said the rebels are drawing up a constitution that will be put up to a popular vote. "We believe that the Ukrainian state as it was cannot be restored," he said in remarks carried by the Tass news agency.

Germany: Infectious Diseases Spreading As Migrants Settle In -- via The Gatestone Institute,

  • A new report by the Robert Koch Institute (RKI), the federal government's central institution for monitoring and preventing diseases, confirms an across-the-board increase in disease since 2015, when Germany took in an unprecedented number of migrants.
  • Some doctors say the actual number of cases of tuberculosis is far higher than the official figures suggest and have accused the RKI of downplaying the threat in an effort to avoid fueling anti-immigration sentiments.
  • "Around 700,000 to 800,000 applications for asylum were submitted and 300,000 refugees have disappeared. Have they been checked? Do they come from the high-risk countries?" - Carsten Boos, orthopedic surgeon, interview with Focus magazine.

A failed asylum seeker from Yemen who was given sanctuary at a church in northern Germany to prevent him from being deported has potentially infected more than 50 German children with a highly contagious strain of tuberculosis. The man, who was sheltered at a church in Bünsdorf between January and May 2017, was in frequent contact with the children, some as young as three, who were attending a day care center at the facility. He was admitted to a hospital in Rendsburg in June and subsequently diagnosed with tuberculosis — a disease which only recently has reentered the German consciousness.

Recovery? Italy's Poor Population Has Tripled In Last Decade -- Italians living below the level of absolute poverty almost tripled over the last decade as the country went through a double-dip, record-long recession. As Bloomberg reports, the absolute poor, or those unable to purchase a basket of necessary goods and services, reached 4.7 million last year, up from almost 1.7 million in 2006, national statistics agency Istat said Thursday. That is 7.9 percent of the population, with many of them concentrated in the nation’s southern regions.For decades, Italy has grappled with a low fertility rate -- just 1.35 children per woman compared with a 1.58 average across the 28-nation European union as of 2015, the last year for which comparable data are available.“The poverty report shows how it is pointless to wonder why there are fewer newborn in Italy,” said Gigi De Palo, head of Italy’s Forum of Family Associations.“Making a child means becoming poor, it seems like in Italy children are not seen as a common good.”The number of absolute poor rose last year in the younger-age classes, reaching 10 percent in the group of those between 18 and 34 years old. It fell among seniors to 3.8 percent in the age group of 65 and older, the Istat report also showed. Just a good job the government spent the equivalent of its entire defense budget bailing-out the bankers...

Italy Threatens EU With "Nuclear Option": Give 200,000 Migrants EU Visas, Sending Them North --Two weeks after Italy reacted with anger to Austria's deployment of troops and armored vehicles to the border between the two nations, while reactivating border controls at the Brenner Pass over concerns that Italy will be unable to handle the roughly 85,000 migrants and refugees who have entered the country so far in 2017, the Italian government has threatened to retaliate in way that assures an imminent migrant crisis as well as an escalation of tensions between the two EU nations.According to The Times, an Italian minister and a senator have threatened to issue temporary EU visas to thousands of migrants in an effort to "resolve" Italy's escalating migrant and refugee crisis, which would then allow the thousands of refugees to travel north. The move, which has been described as a 'nuclear option,' would allow the nearly 200,000 migrants currently stranded in Italy, to travel across Europe using a Brussels directive loophole.Paolo Gentiloni, the prime minister, is livid that the rest of Europe has refused to take its fair share of migrants and that they have closed ports to rescue ships as the number of refugees attempting the treacherous crossing from Libya to the Continent has surged.Italy previously called on its EU neighbors to help with the escalating humanitarian crisis but it has been disappointed by their complete lack of action. The face off prompted former Italian Prime Minister Matteo Renzi to shock the European liberal establishment, when last Friday he released excerpts from a new book in which he said that "we need to free ourselves from a sense of guilt. We do not have the moral duty to welcome into Italy people who are worse off than ourselves" adding that "we need to escape from our 'do gooder' mentality."

Italian Banks May Take 10 Years to Fix Bad Debt Issue-Morgan Stanley -  (Reuters) - Italian banks could take 10 years to reduce their level of non-performing loans (NPLs) to the European average, Morgan Stanley said on Monday, adding that setting up a "bad bank" could help. A recession that ended in 2014 saddled Italian banks with 349 billion euros (305.94 billion pounds) in impaired debts, one third of Europe's total, while a clogged judicial system and sluggish economic growth made it tough to recover non-performing debts. But a series of state-led steps involving capital injections and a plan to bailout Monte dei Paschi, the world’s oldest bank, have provided some relief. "We believe progress has been made but vulnerabilities remain, with 60 billion-70 billion euros of non-performing loan disposals still in the pipeline and almost 10 years to reach European NPL levels at the current rundown rate," Morgan Stanley said. Analysts at the U.S. bank said establishing a "bad bank" or a publicly-funded asset management company would be a key step towards resolving Italy’s NPL problem. The idea of a bad bank is backed by European Union institutions, including the central bank and regional banking authority, but it faces opposition in Germany which balks at the prospect of a tax-payer funded bailout. Last week, Bank of Italy Governor Ignazio Visco welcomed a European Union proposal to set up state-backed vehicles to buy bad loans from banks but said participation should be voluntary. Ireland, Spain and Austria have all seen their financial systems and economies emerge healthier after choosing to set up a bad bank in the aftermath of the euro zone debt crisis. 

The Real Cause of the Italian Bank Bailouts and Euro Banking Troubles --Has the European banking union worsened rather than solved the credit and financial market conditions in the area? In a recent speech at the European Parliament re-edited for this blog, Vladimiro Giacché, President of Centro Europa Ricerche, clarifies many obscure and misunderstood aspects of the story: the economic and political interests involved and the peculiar case of the Italian banks.The European banking union was born with the declared objective to reduce the “financial balkanization” of the Eurozone. Balkanization—the breakdown of cross-border banking when anxious lenders retreat to domestic safe havens—was rightly perceived as one of the main threats to the stability and the very existence of the common currency.In fact, in the aftermath of the financial crisis, most available analyses showed how a system—that until 2008/2009 was so deeply interconnected it seemingly could never be disentangled—has since then been redefining itself along national lines. Eurozone cross-border lending has fallen to almost half of its pre-crisis levels, and many investors and banks have returned to core countries (Germany and France). Lending in so-called peripheral countries (Greece, Ireland, Spain, Portugal and Italy), meanwhile, has reverted to being essentially domestic. This was politically embarrassing but also dangerous, since it made an end to the common currency technically feasible. What’s worse, this new situation created an additional problem just as dangerous: a vicious and potentially catastrophic feedback loop between bank credit risk and sovereign credit risk—i.e., the risk that a nation could be pushed into default.

IMF to announce Greece needs further debt-relief measures - The Executive Council of the International Monetary Fund (IMF) will decide on Thursday, July 20, whether or not the Greek debt is sustainable, Bloomberg reports. In a statement to Bloomberg, the IMF’s European Department Director Poul Thomsen claims that the debt sustainability analysis (DSA) for Greece is ready and it is negative. IMF’s technocrats do not believe the Greek sovereign debt is on a sustainable trajectory. The IMF’s DSA report focuses on the objective of allowing Greece to return to market borrowing, without the support of the European Stability Mechanism and the IMF. Once again, for the IMF the only road goes through debt-relief. According to Kathimerini’s sources in Washington, the DSA report is based on the assumption that Athens will be able to maintain a high primary surplus for a number of years, in line with the projections endorsed by European creditors. Nonetheless, the Greek sovereign debt does not appear to be in a sustainable trajectory without an outright haircut., that is, a non-starter for European creditors. A haircut is a non-starter for European creditors. According to the IMF, by 2030 Greece will have to spend up to 20% of its GDP to service its debt, which is unsustainable. And it is also likely that the Greek banking system will need further refinancing to the tune of €10bn. More significantly, for the IMF debt reduction is critical for generating the confidence in the Greek economy, which currently is not attractive to foreign investors.

IMF hails ‘ambitious’ French reforms under Macron -- The IMF on Monday hailed French President Emmanuel Macron's "ambitious" reform programme, saying his spending, labour and tax overhauls could go "a long way" towards tackling high unemployment and weak growth. The International Monetary Fund raised its 2017 growth forecast for France by 0.1 points to 1.5 percent and said it could "further accelerate" next year. "The new government is pushing ahead with an ambitious economic programme to make France's economy more dynamic and its public finances sustainable," the IMF said after its annual analysis of the French economy. "The envisaged labour and tax reforms are aimed at boosting growth, employment and competitiveness," it added. It also said the centrist government formed by Macron, a 39-year-old former banker, "has rightly emphasised" the need to decrease public spending. A less profligate approach will "help gradually reduce the budget deficit and debt," the Washington-based IMF said. Macron's government has pledged to meet the EU deficit limit of 3.0 percent of GDP in 2017, a target France has missed for the past decade. 

French court refers 'right to be forgotten' dispute to top EU court | Reuters: (Reuters) - EU judges will have to decide whether Alphabet's Google has to remove certain web search results globally to comply with a previous privacy ruling after France's supreme administrative court referred the issue to the top EU court. Google has gone head to head with CNIL, the French data protection authority, over the territorial scope of the so-called "right to be forgotten", which requires the world's biggest search engine to remove inadequate or irrelevant information from web results under searches for people's names. Having been fined 100,000 euros ($115,000) by CNIL in March 2016 for not delisting across national borders, Google appealed to France's supreme administrative court, the Council of State, which on Wednesday passed the matter to the Court of Justice of the European Union (ECJ). The tech giant has argued that a balance should be found between the right to privacy and freedom of expression, saying that such removals should not go beyond Europe and into countries with different laws on the subject.

The ECB's Balance Sheet Is Now The Size Of Japan's GDP --Yesterday was a landmark day for the ECB. First, the ECB disclosed that its CSPP, or corporate bond holdings, rose above €100Bn for the first time. As DB's Jim Reids notes this morning, to put things in perspective, a similar market cap company would be the 18th largest in the Stoxx 600 and 42nd largest in the S&P 500. It's also roughly equivalent to the annual national output of Kuwait - the 59th largest economy in the world as of 2016."Assuming that the previously disclosed percentage of bonds purchased in the primary market, or directly from the company, has not changed since our report a month ago, this means that the price indiscriminate ECB has directly injected approximately $15 billion in various European corporate entities in exchange for bonds, bypassing any middlemen in the process. As for the ECB's other notable "achievement" according to the latest update, the ECB's balance sheet now stands at €4.23 trillion, making it the largest central bank holding in the World. As Deutsche Bank notes, this is the same as the GDP of Japan (€4.3 trillion) - the 3rd biggest economy in the world and a decent distance ahead of Germany (€3.02tn) - the fourth largest. The news takes place one month after another memorable event for central-planning took place, when both the ECB and BOJ balance sheet surpasses the size of the Federal Reserve's.

Meet the neighbors: EU citizens in the UK  - Of the three aspects of the Brexit divorce the EU says must be tackled before they will move onto the future relationship, the rights of EU citizens living in the U.K. and the reciprocal rights of British citizens across the Continent was supposed to be the easy one. (The other two are the Northern Irish border and the so-called Brexit bill.) Both sides say they want a quick win on the issue to give certainty to the millions of people now concerned about their immigration status. But Prime Minister Theresa May’s offer of “settled status” to EU citizens living in the U.K. has not gone down as well as she hoped and the topic is set to take up a considerable amount of oxygen in the first full week of Brexit talks, which get under way in Brussels Monday. There are around 3.2 million EU citizens living in the U.K. and around a million U.K. citizens resident in the rest of the bloc. But who are they? And what impact do they have on the countries they live in? Here’s POLITICO’s data guide to the issue:

UK ‘sleepwalking’ into food insecurity after Brexit, academics say -- The government is “sleepwalking” into a post-Brexit future of insecure, unsafe and increasingly expensive food supplies, and has little idea how it will replace decades of EU regulation on the issue, a report by influential academics has said. The study says ministers and the public have become complacent after decades of consistent food supplies and stable prices for the UK, something greatly helped by the EU. Written by food policy experts from three universities, it is published on the day David Davis, the Brexit secretary, heads to Brussels for a second round of formal talks with the EU on departure arrangements.  The report argues that there has been an almost complete lack of action so far in a host of areas connected to food and farming, including subsidies, migrant farm labour and safety standards. “With the Brexit deadline in 20 months, this is a serious policy failure on an unprecedented scale,” said Tim Lang, professor of food policy at City Universityand one of the authors.  The 88-page report notes that large elements of EU agricultural and fisheries policies would need major reform even if Britain remained a member. But it warns that departure from the EU raises such urgent complications for food and agriculture that without focus on the issue “the risk is that food security in the UK will be seriously undermined”, leading to dwindling supplies and erratic prices. It adds: “There are also serious risks that standards of food safety will decline if the UK ceases to adopt EU safety rules, and instead accepts free-trade agreements with countries with significantly weaker standards.” After 50 years of generally stable supplies and prices, the authors say, the UK could return to the sort of volatility last seen in the 1930s and earlier, calling the scale of the challenge “unprecedented for an advanced economy outside of wartime”.

Former civil service head warns Theresa May of Brexit chaos - Top former civil servants have warned Theresa May that squabbling cabinet ministers, unrealistic expectations and an overburdened administration risk derailing her hopes of a smooth Brexit. May faces renewed calls to compromise or face the prospect of crashing out of the European Union. On the eve of the next round of Brexit talks, the prime minister is under pressure to show she is willing to alter key aspects of her EU exit plans, which no longer command majority support in parliament.In a warning over the scale of the challenge now facing the government, Lord O’Donnell, the former cabinet secretary, writes in the Observer that Britain is in for a “rough ride” unless cabinet ministers unite and back a long transition deal to soften the impact of Brexit.“The EU has clear negotiating guidelines, while it appears that cabinet members haven’t yet finished negotiating with each other, never mind the EU,” the crossbench peer warns. He calls on ministers to “start being honest about the complexity of the challenge”. “There is no chance all the details will be hammered out in 20 months,” he warns. “We will need a long transition phase and the time needed does not diminish by pretending that this phase is just about ‘implementing’ agreed policies as they will not all be agreed.”

EU clarifies stance on Britain’s exit tab - Politico - Heading into the first proper round of Brexit talks on Monday, the EU and the U.K. are locked in a risky game of chicken over Britain’s exit bill. But the stakes and possible resolutions to this standoff are becoming clearer as well.The fight over what’s known in official jargon as the “single financial settlement” can’t last long for the talks to succeed. The EU’s chief negotiator, Michel Barnier, warned last week that it could paralyze a process that’s already behind schedule.While the Brexit tab isn’t as critical to Britain’s post-EU economic prospects as its future trade ties with the bloc, it’s now the most politically resonant issue, seen at home as a test of Prime Minister Theresa May’s mettle and on the Continent as a test of the U.K.’s willingness to bend to agree the whole divorce package. Both sides agree on one thing: not to mention any specific figure. But numbers have floated around among those inside the Brussels bubble and officials in national capitals who are working the Brexit file and struggling to come to grips with the financial arrangements of this historically unprecedented separation. Barnier and his team have worked out and shared a methodology for computing the U.K.’s financial obligations. As in any divorce in which one side feels badly jilted, it is designed to keep London on the hook long after it officially walks out — not only to plug a looming hole in the EU budget, but also to ensure the U.K. cannot back out too soon from projects it agreed to finance as a stakeholder in the European Investment Bank. By the EU’s calculation, the single settlement, depending on a host of variables, is a figure stretching to at least 11 figures, possibly 12 — numbers large enough to set off rage and fury among some Brexiteers across the Channel, where some officials and advocacy groups believe the U.K. should be able to walk away without paying one more cent (let alone a penny or a pound).

Exclusive: Philip Hammond is deliberately trying to ‘frustrate’ Brexit, Cabinet colleague says --Philip Hammond is deliberately working to "frustrate" Brexit and treating pro-Leave ministers like "pirates who have taken him prisoner", a Cabinet minister has told The Telegraph, in an extraordinary attack on one of the most senior members of the Government.  Branding the Chancellor and his Treasury "the Establishment", the furious senior minister warned of a deep split over how to leave the European Union, launching all-out war as talks restart in Brussels on Monday.  They also revealed a plot to keep a weakened Theresa May in Number 10 in a bid to prevent an early leadership race, warning of a "critical moment" as David Davis flies out to meet his rival negotiators for discussions to set the terms of engagement. It came as Mr Hammond hit back angrily after days of damaging accusations were leaked to the media against him, including claims that he made sexist remarks and said public sector workers are overpaid. 

Tory feuds reveal a leadership contest is already under way: If you are in the market for narratives of Conservative revival, there is a semi-plausible one on offer from most of that party’s MPs. It goes something like this: the government emerges from the Brexit negotiations with a deal that delivers a gentle transition, the economy avoids a serious recession and the parliament runs until its expiry date of June 2022. By then, Jeremy Corbyn will have been in place for almost seven years and will have lost some of his radical chic, in contrast to the new Tory leader – “Candidate X” – who will win a small but workable parliamentary majority. The difficulty is that no one can agree on who Candidate X might be. In contemplative moments, Conservative MPs reflect on their situation two years ago after David Cameron announced that he would not contest a third general election and the party’s thoughts inevitably turned to the succession. Back then, Tories believed they had an embarrassment of riches: not only George Osborne, Cameron’s preferred heir, but Boris Johnson and Theresa May, the up-and-coming cabinet ministers Sajid Javid, Stephen Crabb and Amber Rudd, and promising backbenchers such as Dominic Raab. Now the field of alternatives to May is looking sparse. Osborne is out of parliament. Javid has not distinguished himself as Communities Secretary and was expected to lose his post in the event of a May landslide. Johnson’s appeal at Westminster was always based on his presumed support in the country, and as that has waned, so have his leadership prospects. Crabb, once the great hope of the modernisers, is on the back benches and his majority was slashed at the last election. Rudd’s stock rose during the election campaign but it ended with her securing only a wafer-thin majority in her Sussex seat of Hastings and Rye.

The Remainers who now chair select committees will harry the government over Brexit - The Conservatives’ poor performance in the General Election raises the prospect that the pendulum of power may have swung towards Parliament and against the government. With a shaky Commons majority, secured only through a semi-formal deal with the Democratic Unionists, and no majority in the Lords, government is much more vulnerable to parliamentary pressure than is usual in British politics.One important venue of parliamentary scrutiny and accountability is the Commons select committee system, which has just elected a new cohort of committee chairs. These committees allow groups of backbench MPs to scrutinise the work of government departments and to initiate their own inquiries in areas related to the work of those departments. Generally viewed as influential on government policy, they could present innumerable challenges to the government. So, what do the recent chair elections reveal? Looking at the 2017 chair nominations, we can see that reforms of the committee system in 2010 have only been partially successful. In 2010, committees were reformed so that chairs are elected by the whole House and members by party caucuses, which replaces a previous system of patronage by party whips. While these changes are regarded as generally successful, there are some caveats. As with the two previous chair elections in 2010 and 2015, the degree of competition for places is somewhat less than it might be. Only 11 of the 28 committee chairs were contested with the rest being elected (and in most cases re-elected) unopposed. 17 incumbents were returned unopposed with a further four seeing off challengers to retain their position. This is perhaps justified by the fact that many of the returning chairs who did not face a challenger were only elected two years prior, while many were installed even more recently, including chairs of two new committees (Hilary Benn on the ExEU Committee and Angus MacNeil at the International Trade Committee) created following the referendum on membership of the EU.

 Government’s Brexit Repeal Bill ‘Power Grab’ Threatens UK Environment Regulations --Power grab. Backroom Deals. Henry VIII. Reckless. All of these words have been used to describe the European Union (Withdrawal) Bill – better known as the Repeal Bill.The Repeal Bill was officially released on 13 July. This is the plan for how the UK will bring over all the EU laws it is currently operating under. And there’s one big question everyone is asking: how transparent will Brexit be?From Labour to the SNP, most opposing parties have denounced the bill. And green groups in particular are concerned about the lack of scrutiny and accountability that will take place as the government tries to turn some 1,100 pieces of EU environmental legislation into British law in a very short time span. “The Repeal Bill risks turning back the clock on 40 years of environmental gains,” ClientEarth’s director of programmes, Karla Hill, said. “The Bill creates sweeping new powers for ministers without giving a proper role to Parliament.Under the EU, Britain has been held to account on environmental issues such as breaching legal air pollution limits and cleaning up a swath of beaches, areas once too polluted to swim in. But now many fear that these laws will be weakened and that there will not be the same level of power to enforce them.

As London feuds, full Brexit negotiations open in Brussels (Reuters) - Britain's Brexit minister pledged to "get down to work" as he kicked off a first full round of negotiations on Monday, but a year after Britons voted narrowly to leave the EU their government seemed at war with itself over the divorce terms. Prime Minister Theresa May, her authority diminished after losing her majority in a June election she did not need to call, has struggled to control rival cabinet ministers. That worries European Union negotiators who stress that 20 months until Brexit is very little time to negotiate an orderly departure. "It's time to get down to work and make this a successful negotiation," veteran anti-EU campaigner David Davis, the Brexit secretary, said after meeting the bloc's chief negotiator Michel Barnier before their teams began four days of talks. In London, media were rife with reports of infighting along the lines of the Leave-Remain rifts that May's Conservative party suffered during the referendum. Her spokesman said she would tell ministers not to reveal cabinet discussions. Foreign Secretary Boris Johnson, in Brussels for a separate meeting, passed up a chance to deny that ministers were at odds. His backing helped secure a four-point victory for the Leave camp in June last year. Asked if the cabinet was still "split on Brexit", Johnson simply said he was pleased negotiations had begun and then defended the offer May has made to protect the rights of EU citizens in Britain. 

Britain launches ‘line by line’ challenge to huge divorce bill being demanded by the EU -- BRITAIN last night launched a line by line challenge to the EU’s “crazy” £85billion Brexit divorce bill at crunch talks in Brussels. Brexit Secretary David Davis said it was “time to get down to work” as he met with the EU’s Brexit negotiator Michel Barnier in Brussels to kick-off four days of intense negotiations over the UK’s departure. And Treasury finance chief Mark Bowman demanded answers from EU officials over their demand for the UK to cough up a bumper financial settlement as it leaves the bloc. Mr Barnier is demanding the UK agree to a payout before negotiations on a new trade bill post Brexit in March 2019 can begin. But a senior UK source told The Sun: “We will be going through their paper line by line to find out the basis of what they’re asking for. “A bill of 100billion euros is crazy.”EU insiders claim they want between £70billion to £85billion from Britain to make up for the huge hole Brexit will leave in the Commission’s coffers – given Britain’s contribution to the annual budget. As well as future pension costs the bill could even include Britain’s share of a potential legal bill from a trade dispute with the US over illegal subsidies to Airbus. Yesterday marked the first time the divorce bill has come up in formal talks. Foreign Secretary Boris Johnson last week insisted Brussels could “go whistle” for the cash – sparking a bitter row with Mr Barnier. But Mr Davis on Friday admitted Britain would have “obligations” to fulfil after we leave. A Czech official yesterday said some payments – such as those for the Common Agriculture Policy – would last until 2023. 

Five more years of EU migration after Brexit, source says | Daily Mail Online: The Cabinet has agreed to pursue a 'soft-landing' transition from the EU that could see free movement continue in all but name until 2022.A senior government source told the Daily Mail that Remainers had declared victory in their battle for a lengthy transition period, despite fears it will slow the process of taking back control of Britain's borders.The source claimed leading Brexiteers such as Liam Fox, Boris Johnson and Michael Gove have now signed up to the idea of a substantial 'implementation phase' after the UK leaves in 2019, in order to give business and government time to adjust to departure from the EU. In return, Remainers such as Philip Hammond and Amber Rudd have finally accepted the idea that the UK will ultimately leave both the single market and the customs union. The revelation about private Cabinet discussions comes days after Theresa May laid down the law about the need to maintain confidentiality following a string of damaging leaks.Brexit Secretary David Davis has previously indicated that any transition would not last longer than two years. But this line has now been softened, opening the door to a transition that could last until 2022. Under one option, the length of the transition period would be laid down in law to prevent future backsliding. 'The Cabinet is now united on the need for a transitional period – that wasn't the case five weeks ago,' the Government source said. 

Did the City of London Just Press the Panic Button on Brexit? - Don Quijones - In a sign of growing desperation, the City of London Corporation, the enigmatic city within the city that serves as the ultimate bastion of privilege in the UK, is now trying to appeal to brute populist sentiment to defend its position as the world’s most important financial center.In a memo to the British Treasury, MPs, and financial institutions, the City’s Brexit envoy to the EU, Jeremy Browne, bemoaned that the French are pushing for the most damaging Brexit possible, even if France doesn’t directly benefit. The memo was duly leaked to one of the UK’s most anti-EU newspapers, The Daily Mail: Browne’s recent meeting at the Banque de France was the worst he had had “anywhere in the EU”. The French, he said, “are crystal clear about their objectives: the weakening of Britain and the ongoing degradation of the City of London” and plotting to “actively disrupt and destroy” the UK’s financial sector when Britain leaves the EU.   Paris has promised to unfurl the red carpet for the City of London’s highest paid bankers by offering low tax rates and bank-friendly legislation, including scrapping a proposed financial transaction tax, while also seeking to grow as a clearing center. Clearing is a huge business for the City of London. The U.K. is estimated to handle 75% of all euro-denominated derivatives transactions, equivalent to around €930 billion of trades per day. It’s also home to roughly 90% of US dollar domestic interest-rate swaps. The world’s largest clearinghouse for interest rate swaps, LCH, is based there and is majority-owned by London Stock Exchange Group Plc. LCH functions as a middle man collecting collateral and standing between derivatives and swaps traders to prevent a default from spiraling out of control. As Bloomberg reports, the role of clearing houses like LCH in global finance has become far more entrenched since the 2008 Financial Crisis and the inexorable expansion of derivatives trading.

British Exporters Aren’t Making Plans for Brexit - British exporters are unprepared for leaving the European Union, according to a survey published Friday. Almost half have yet to review their strategies more than a year after the Brexit vote, despite the EU being a trading partner for 85 percent of exporters, the YouGov Plc poll for Lloyds Bank found. Firms will almost certainly face more restricted access to the bloc when Britain leaves in March 2019. “It’s concerning,” said Clive Higglesden, head of trade at Lloyds Bank Global Transaction Banking. “Wait-and-see is not really an adequate strategy for exporters, and businesses should be acting now to manage any risks on the horizon and possibly explore new opportunities.” Exporters are currently enjoying what Bank of England Deputy Governor Ben Broadbent has called a “sweet spot,” as they still have access to the single market and the pound’s depreciation since the 2016 referendum has boosted their competitiveness. But Prime Minister Theresa May has pledged to leave the single market and customs union and instead strike a free-trade agreement with the EU. If the two sides fails to reach a deal or a transitional arrangement, Britain will face tariffs under World Trade Organization rules, a prospect that dismays most businesses. Trade talks can’t start until agreements are reached on the Irish border, the financial settlement and citizens’ rights, which negotiators failed to achieve in a second round of exit negotiations this week. 

Government delays starting work on the UK’s post-Brexit border system until AT LEAST October - AMBER RUDD has delayed starting to design the UK’s post-Brexit border system until at least the autumn, The Sun can reveal. Despite saying in February she would launch a listening exercise on immigration before the summer holidays, the Home Secretary has now put back the official Green Paper consultation until October at the earliest. Ms Rudd said the Government will spend the summer “engaging with businesses and other stakeholders” on immigration. She said: “one of the first things we’re going to do is a consultation, we hope to do it over the summer.” She added: “There’s always a lot of anecdotal evidence about who’s coming, who’s going but we want to make sure that any future policy is based on fact.” Home Office sources insisted that the Rudd would be liaising with businesses in the coming weeks but the formal consultation would not be launched until the after the party conference season ends in October. A Home Office spokesperson said: “We are working across Government to identify and develop options to shape our future immigration system. “We have always been clear that it is important to understand the potential impact on different sectors and we will therefore ensure businesses and communities are given the opportunity to contribute their views.” 

Brexit: more than 100,000 from North, Britain seek Irish passport - The number of applications for an Irish passport from Northern Ireland and Britain has increased by half since January, fuelled by concerns about the UK’s departure from the European Union. Figures released by the Department of Foreign Affairs show that nearly 100,000 people from Northern Ireland and Britain sought Irish passports this year. Since January 1st , 45,307 people living in Britain with an Irish background have applied, compared with 27,671 for the first six months of 2016, a rise of 57 per cent. The number of applications from Northern Ireland has jumped to 53,547 compared with 37,537 in the first six months last year, a rise of 49 per cent. In all over 500,000 people applied for an Irish passport since January 1st, thought Department of Foreign Affairs estimates that the total will pass 1 million for the first time by year’s end. Anyone born on the island of Ireland, or whose parents and grandparents were born here, is automatically entitled to be an Irish citizen qualifying for a passport. 

Grenfell Tower fire: Government considering covering charred shell in tarpaulin -- The Government is considering covering Grenfell Tower in tarpaulin to shield residents from the charred shell that serves as daily reminder of the devastating fire. Grenfell Response Team (GRT) said it would consider the viability of covering the tower one month on from the tragedy, after the local community asked for something to be done to obscure their view. "Views from local residents are being considered on the viability of covering the Grenfell Tower in tarpaulin. Any final decision will need to consider its impact on the critical recovery operation being undertaken by the Metropolitan Police Service and London Fire Brigade," a statement read. But Hilary Patel, GRT community engagement lead, told a public meeting on Wednesday a viable solution to cover the building has not yet been found. She said authorities are looking at ways to protect and cover the building, but that it would take time and was unlikely to happen until October, once the recovery operation is complete. Residents were told that covering the 24-storey block could alter the humidity and sensitive conditions inside, which could interfere with the investigation. They were also told scaffolding was not yet an option, as it would need to be fixed to the middle of the building, which could also interfere with recovery efforts. But survivors told the panel at the heated meeting in north Kensington that their children were traumatised looking up at the charred building every day. One resident from the local community said: "All our kids are traumatised and they are still having to walk past this building, asking us questions that we can’t answer."

BOE Warns Popular 35-Year Mortgages Shackle Consumers With "Lifetime Of Debt" --Consumers in the UK have been on a credit binge since the Bank of England cut its benchmark interest rate to an all-time low as investors braced for the widely anticipated economic shock of Brexit – a shock that, unsurprisingly, has yet to arrive, despite warnings from the academic establishment that a "leave" vote would trigger an imminent economic catastrophe. And now, with total credit growth rising at 10% a year, the BOE is warning that the increase in unsecured lending is becoming increasingly unsustainable. While the central bank is less concerned with mortgage debt than credit-card debt and other types of consumer credit, some at the bank are beginning to worry that the growing demand for long-term mortgages will shackle borrowers with a lifetime of debt, according to the Telegraph.“British families are signing up for a lifetime of debt with almost one in seven borrowers now taking out mortgages of 35 years or more, official figures show.Rapid house price growth has ­encouraged borrowers to sign longer mortgage deals as a way of reducing monthly payments and easing affordability pressures.Bank of England data shows 15.75pc of all new mortgages taken out in the first quarter of 2017 were for terms of 35 years or more. While this is slightly down from the record high of 16.36pc at the end of 2016, it has climbed from just 2.7pc when records began in 2005.”The steady rise has triggered alarm bells at the BOE, prompting regulators to warn that the trend risks storing up “problem[s] for the future” if lenders ignore the growing share of households prepared to borrow into retirement. Indeed, bank figures show one in five mortgages today are between 30 and 35 years, up from below 8% in 2005, as the traditional 25-year mortgage becomes less popular.

Britain spends billions on flawed fighter jets - The Times - Britain is paying hundreds of millions of pounds in hidden costs for a next-generation warplane that will be unable to function properly because of defence cuts, an investigation by The Times has revealed. The F-35 Lightning II, the most expensive aircraft of its kind, has been described by Sir Michael Fallon, the defence secretary, as the “most powerful and comprehensive” fast jet in history. Its American manufacturer, Lockheed Martin, has said that the aircraft will cost Britain between £77 million and £100 million each.  However, taxpayers face spending more than £150 million for each of the high-tech fighter-bombers delivered this year, analysis suggests. The extras — for items such as software upgrades, spare parts and “cost reduction initiatives” — are buried in US defence contracts and have not been included in the published figures. Military insiders have told of fears about the aircraft, which continues to suffer setbacks described by one former senior officer as “utterly pathetic”. Britain is buying the more costly F-35-B model, which is designed to take off and land vertically. US documents reveal that four already purchased are too heavy to perform this function safely. The full scale of problems facing the F-35 Lightning II can be exposed today:

  • • The “stealth” jet cannot transmit data to British ships or older planes without revealing its position to the enemy.
  • • Broadband on Britain’s principal aircraft carrier is four times weaker than that for an average UK household, severely hampering the jet’s abilities.
  • • A test pilot had to land in almost total darkness after night vision failed in the plane’s £309,000 helmet.
  • • Its £12 billion software system is vulnerable to cyberattack and Britain will not be able to test its security independently.
  • • The defence department in charge of computer networks essential to the plane’s operation must find savings of £400 million this year.
  • • Falls in the value of the pound against the dollar have exposed British taxpayers to more than £1 billion in extra costs.

9/11 Survivors Urge UK to Release Documents Related to Saudi Arabia - Survivors of the 9/11 attacks have written to Prime Minister Theresa May – urging her to make public a British government report into the extent of Saudi Arabia’s funding of Islamist extremism in the UK.The report into the significance of the financing of Islamic extremists in Britain by Saudi Arabia and other nations was commissioned by Ms May’s predecessor, David Cameron, as part of a deal to obtain political support for a parliamentary vote on UK airstrikes on Syria.Last week, British Home Secretary Amber Rudd said the report was not being published “because of the volume of personal information it contains and for national security reasons”. Green Party co-leader Caroline Lucas suggested the refusal to make public the report was linked to a reluctance to criticise the kingdom, with which Britain has long had close strategic and economic ties. Almost 3,000 people were killed in the attacks (Getty)Now, a group representing US survivors of the 9/11 attacks and the relatives of some of the almost 3,000 people who died, has urged Ms May to seize the chance to release the report, even if it is not fully complete.“The UK now has the unique historic opportunity to stop the killing spree of Wahhabism-inspired terrorists by releasing the UK government’s report on terrorism financing in the UK which, according to media reports, places Saudi Arabia at its centre of culpability,” says the letter, signed by 15 people.“The longer Saudi Arabia’s complicity is hidden from sunlight, the longer terrorism will continue. They must be stopped; but who will stop them? We submit that you are uniquely situated     to shine the cleansing light of public consciousness.” It adds: “We respectfully urge you to release the report now, finished or unfinished. We ask you to consider all the victims of state-sponsored, Saudi-financed terrorism, their families and their survivors in the UK and all over the world.”

3/4 UK Graduates Will Never Repay Student Loans -- With tuition costs rising more than twice as quickly as consumer prices, a generation of recent college graduates are struggling to strike out on their own, burdened by a $1.4 trillion pile of debt that ineligible to be erased by the tonic of bankruptcy protection. Tuition costs have been blamed for nearly all of the ills facing the millennial generation. The rate at which re cent graduates are moving back homme with mom and dad has never been higher, with nearly a third retreating back to the basement as they struggle to jobs with adequate pay. Household format ion rate have plummeted as women put of childbirth. Meanwhile, those who have made it out are clustering in popular urba like NYC, San Francisco or DC where they’re spending more than 50% of their income on rent. There’s no question that US graduates have it rough, but a recent study by the UK-based Institute for Fiscal Studies suggests that students in the UK are facing obstacles that’re even more overwhelming than their peers in the US. As the Financial Times reported earlier this month, Three-quarters of UK university leavers will never pay off their student loans, even if they are still contributing in their 50s. This means the UK government will have to write off some or all of the debt taken out by 77% of students because they will not earn enough to repay their loans within 30 years of graduating, according to the study, which was written up in the Financial Times.