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

Saturday, December 2, 2017

week ending Dec 2

Yellen suggests a continuation of gradual rate hikes - (AP) — Federal Reserve Chair Janet Yellen said Wednesday that the Fed expects to continue raising interest rates gradually. And she sought to assure lawmakers that the Fed would take care not to choke off any extra growth generated by tax cuts as long as inflation stayed tame. In likely her last appearance before Congress before she leaves the Fed in February, Yellen received praise and appreciation from Republicans and Democrats on the Joint Economic Committee who saluted her four-year tenure.Yellen's testimony reinforced statements made Tuesday by Jerome Powell at his Senate confirmation hearing to succeed her as Fed chairman. President Donald Trump chose Powell, a Fed board member, to replace Yellen, the first woman to lead the central bank, after saying he wanted to impose his own stamp on the Fed.Yellen and Powell both stressed this week that the Fed intends to keep moving incrementally to raise rates in response to a consistently solid economy. Powell said at his confirmation hearing that he thought the case for a rate increase when the Fed meets next month was "coming together." Indeed, most economists expect the Fed to raise rates in December for the third time this year.In her appearance, Yellen painted a generally upbeat view of the economy, with growth achieving an annual rate above 3 percent for two straight quarters for the first time in three years. On Wednesday, the government estimated that the economy grew at a 3.3 percent annual rate in the July-September period.  Republicans on the committee asked Yellen whether the Fed might end up negating any such stimulus effect by accelerating its rate hikes to prevent the economy from overheating. "We welcome strong growth," Yellen replied. "The Fed is not trying to stifle growth." She said that if economic expansion were to exceed the modest rates that have prevailed in recent years, "we will be delighted to support that. ... We do not have some cap on growth that we are trying to achieve."

Fed chief nominee Jerome Powell backs interest-rate hikes – Jerome Powell, President Donald Trump's nominee to become the next chairman of the Federal Reserve, said he expects the central bank to continue gradually raising interest rates to support the central bank's goals of maximum employment and stable prices.In prepared testimony released on Monday that he will deliver Tuesday at his confirmation hearing before the Senate Banking Committee, Powell also said the Fed would consider appropriate ways to ease the regulatory burdens on banks while preserving the core rules enacted under the Dodd-Frank financial reform law following the 2008 financial crisis. "Our aim is to sustain a strong jobs market with inflation moving gradually up toward our target," he said. "We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink." Powell, a member of the Fed's board since 2012, is expected to win confirmation to succeed Janet Yellen, whose term expires in February.Many expect Powell to stick to the monetary policy the Fed has pursued under Yellen, whose term expires in February. That calls for small interest rate hikes, as opposed to the sharper increase in borrowing costs that some conservative economists have called for. Lower rates generally support economic growth. In his remarks, Powell sought to send the reassuring message that he would represent a figure of stability and continuity at the Fed, while remaining open to making certain changes as appropriate. The Fed has raised rates four times starting in December 2015, including two rate hikes this year. Economists expect a third rate hike to occur in December, and they're projecting at least three additional rate increases in 2018.

Jerome Powell Sees Rates Rising Somewhat Further - President Donald Trump’s nominee to head the Federal Reserve is making one thing clear as he prepares to testify before lawmakers: He’s not here to shake things up at the U.S. central bank. Jerome Powell, in a statement to the Senate Banking Committee ahead of his confirmation hearing on Tuesday, signaled broad support for how the Fed operates, regulates and guides the economy, offering a full-throated defense of the government institution he’s about to lead.“Our aim is to sustain a strong jobs market with inflation moving gradually up toward our target,” Powell said in the text of his remarks, which the Fed released on Monday. “We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink.”That keeps Powell firmly in line with the trajectory for monetary policy set out by current Fed Chair Janet Yellen, whom he’ll succeed in early February if he’s confirmed. Under Yellen, the Fed has raised rates just four times in two years and put its $4.5 trillion balance sheet on a very gradual path of slimming down.Fed officials are scheduled to meet Dec. 12-13 in Washington and are widely expected to raise their benchmark interest rate by a quarter percentage point.  On regulation, Powell struck a similar note, pledging to protect financial stability, even as he spoke of refining post-crisis regulatory reforms.“Our financial system is without doubt far stronger and more resilient than it was a decade ago,” he said. “We will continue to consider appropriate ways to ease regulatory burdens while preserving core reforms.” Powell said those core banking rules include strong minimum levels of capital and liquidity, stress testing and living wills for large banks in case they collapse. His defense of those reforms is likely to draw criticism from some Republicans on the panel who would prefer the Fed move to more aggressively roll back rules they believe are stifling lending.

Fed Frets About Inflation While Preparing Another Rate Hike - Tim Duy -The minutes of the Oct. 31-Nov. 1, 2018 FOMC meeting made a bit of a splash with their mixed message. The minutes revealed widespread concern with the weak inflation numbers of the past year. Yet the minutes also showed that committee members were committed to a December rate hike. Damn the torpedoes, full speed ahead! Why the mixed message? Two words: “gradual” and “lags.”  Importantly, the concerns about inflation ran deep:With core inflation readings continuing to surprise on the downside, however, many participants observed that there was some likelihood that inflation might remain below 2 percent for longer than they currently expected, and they discussed possible reasons for the recent shortfall……In discussing the implications of these developments, several participants expressed concern that the persistently weak inflation data could lead to a decline in longer-term inflation expectations or may have done so already…… the possibility was raised that monetary policy actions or communications over the past couple of years, while inflation was below the Committee’s 2 percent objective, may have contributed to a decline in longer-run inflation expectations below a level consistent with that objective. Some other participants, however, noted that measures of inflation expectations had remained stable this year…This sounds like a fairly bleak discussion which should support a reassessment of the path of rate hikes going forward. With this in mind, central bankers reaffirmed their support for gradualism: Nearly all participants reaffirmed the view that a gradual approach to increasing the target range was likely to promote the Committee’s objectives of maximum employment and price stability.But what how gradual is gradual? The split starts to emerge, with one group wanting to slow the pace of rate hikes from gradual to “quite gradual”: A number of these participants were worried that a decline in longer-term inflation expectations would make it more challenging for the Committee to promote a return of inflation to 2 percent over the medium term. These participants’ concerns were sharpened by the apparently weak responsiveness of inflation to resource utilization and the low level of the neutral interest rate, and such considerations suggested that the removal of policy accommodation should be quite gradual.

Fed nominee Powell, once hawkish, now champions Yellen's focus on jobs  (Reuters) - As a nominee to lead the Fed, veteran governor Jerome Powell sides with the outgoing chair Janet Yellen in arguing that the Fed’s easy money policy has paid off by bringing millions back to work without any clear sign it has thrown markets off kilter. In remarks released ahead of his hearing by the Senate Banking Committee which is due on Tuesday, Powell said the Fed needed the capacity “to respond decisively and with appropriate force” to new threats to the economy. In the past, however, Powell has been more cautious about the risks posed by such an expansive approach. In his first months at the Fed, Powell was among those who pressured then chair Ben Bernanke for more clarity on when the central bank would start scaling back its bond buying. When Bernanke made those plans public it triggered a “taper tantrum” spike in market interest rates in the summer of 2013, forcing Bernanke, Powell and others to do damage control. As Powell, 64, now prepares to lead the Fed himself, former colleagues, associates and former Fed staff say the key unanswered question is whether his evolution - from a former investment banker wary of an expanding Fed to a supporter of Yellen’s jobs-first approach - represents a change of heart, or rather the outgoing chair’s imprint on the current debate. Powell will inherit a strong economy, low inflation and a clear near-term policy path set by Yellen. What is not clear is how he would respond to another recessionary shock, Minneapolis Fed President Narayana Kocherlakota, who himself transitioned from a policy hawk to dove while in office, told Reuters. “Would Powell be willing to be as aggressive as Yellen?” Kocherlakota asked. Powell will come under particular scrutiny as the first non-economist to run the Fed since William Miller in the 1970s, who was at odds with markets and his colleagues over his reluctance to raise rates to fight high inflation.

Fed's Kaplan Fears "Excessive Financial Imbalances", Warns "We Are Vulnerable To Rapid Reversals" - Dallas Fed President Robert Kaplan just went full 1996 Greenspan... In an essay designed to explain "A Balanced Approach to Monetary Policy", Kaplan included an ominous section pointing at the very significant bubbles that have been blow in recent years... As a central banker, I want to be vigilant to imbalances and distortions that can build as a result of accommodative monetary policy. I have argued that monetary policy accommodation is not “free” —there are costs to accommodation in the form of distortions and imbalances in consumer decisions as well as in investing, hiring and other business decisions. More specifically, experience suggests that the greater the overshoot of full employment, the more difficult it is to unwind imbalances when growth ultimately slows—as it certainly must.When excesses ultimately need to be unwound, this can result in a sudden downward shift in demand for investment and consumer-related durable goods.There are surprisingly few historical examples of “soft landings” in cases where employment has risen above its maximum sustainable level.It is of course possible that “this time will be different,” but as I assess the condition of the U.S. economy, I am carefully monitoring evidence that might suggest growing risks of real imbalances, which could threaten the sustainability of the current economic expansion. For example, the headline unemployment rate has fallen by 70 basis points over the past year, nearly matching the average rate of decline over the prior seven years of the expansion. If this rate of decline continues, this will further tighten labor market conditions and would likely add to excesses and imbalances accumulating in the economy. Excesses can also manifest themselves in financial imbalances. While I would prefer to rely primarily on macroprudential policy tools to manage financial imbalances, I am nevertheless monitoring various measures of potential financial excess.I monitor these and other market measures because I am aware that, as excesses build, we are more vulnerable to reversals which have the potential to cause a rapid tightening in financial conditions, which in turn, can lead to a slowing in economic activity.

Marvin Goodfriend Is Nominated to Be a Fed Governor - Marvin Goodfriend, a widely respected monetary economist and sometime critic of the Federal Reserve under Chair Janet Yellen, was nominated by President Donald Trump to be a governor at the U.S. central bank, the White House announced on Wednesday. A professor at Carnegie Mellon University and a former director of research at the Richmond Fed, Goodfriend has served on an independent panel of economists known as the Shadow Open Market Committee aimed at providing alternative views on monetary policy. Goodfriend will be Trump’s third nomination to the Fed’s Board of Governors, as the president moves to fill several vacancies on the seven-seat panel. Earlier this month, he picked Governor Jerome Powell to replace Yellen as chair. Randal Quarles was sworn into office in October as the Fed’s vice chairman of supervision. Given that Powell doesn’t have a Ph.D. in economics, Goodfriend’s credentials will add some academic heft to a group of policy makers that will lose Yellen’s expertise when her term expires Feb. 3. The board also lost a respected economist when Vice Chair Stanley Fischer resigned in October.“Marvin is a true monetary policy scholar and will be a significant contributor to the team at the Fed,” said Mickey Levy, chief economist for the Americas and Asia at Berenberg Capital Markets LLC in New York and another member of the Shadow Open Market Committee.If confirmed by the Senate, Goodfriend would join at a critical junction for U.S. monetary policy. Fed officials are wrestling over how fast to raise interest rates in response to a tightening labor market against a backdrop of puzzlingly low inflation. The Fed has failed to reach its 2 percent inflation target for most of the last five years. In testimony before a congressional subcommittee in March, Goodfriend spoke of “the Fed’s failure to secure the credibility of its inflation target” and the risks that created for policy and the economy. Goodfriend thought the impact of QE was questionable, at best. Instead he made a case for an even more unorthodox idea: negative interest rates. He conceded, however, that a sustained policy of negative rates might require abolishing paper currency, a step that would likely prove unpopular.

PCE Price Index: October Headline & Core -- The BEA's Personal Income and Outlays report for October was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.14% month-over-month (MoM) and is up 1.59% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.21% MoM and 1.45% YoY. Core PCE remains below the Fed's 2% target rate. Revisions were made going back to July. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.

Q3 GDP Revised up to 3.3% Annual Rate - From the BEA: Gross Domestic Product: Third Quarter 2017 (Second Estimate) Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the third quarter of 2017, according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.0 percent. With this second estimate for the third quarter, the general picture of economic growth remains the same; nonresidential fixed investment, state and local government spending, and private inventory investment were revised up from the prior estimate ... Here is a Comparison of Second and Advance Estimates. PCE growth was revised down from 2.4% to 2.3%. Residential investment was revised up slightly from -6.0% to -5.1%. This was at the consensus forecast.

Q3 GDP Second Estimate: Real GDP at 3.3% -  The Second Estimate for Q3 GDP, to one decimal, came in at 3.3% (3.30% to two decimal places), an increase over 3.1% for the Q2 Third Estimate. Investing.com had a consensus of 3.2%.  Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release:Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the third quarter of 2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 percent.The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.0 percent. With this second estimate for the third quarter, the general picture of economic growth remains the same; nonresidential fixed investment, state and local government spending, and private inventory investment were revised up from the prior estimate (see "Updates to GDP" on page 2). [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.44%. Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 14.5% below trend. A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Six of the eleven recessions over this timeframe have begun at a higher level of current real YoY GDP. In summary, the Q3 GDP Second Estimate of 3.3% was better than expected, and slightly better than the Q2 Third Estimate.

U.S. Third-Quarter Growth Revised to Three-Year High of 3.3% - The latest results for GDP, the value of all goods and services produced, show the economy withstood major hurricanes to reach a more solid footing as it entered the final stretch of the year, thanks to stronger business spending that’s helping cushion a softer pace of consumption. Federal Reserve Chair Janet Yellen said Wednesday, just before the GDP report, that the expansion is “increasingly broad based across sectors as well as across much of the global economy.” While the revised growth rate is in line with President Donald Trump’s goal, economists generally see such a pace as unsustainable and expect growth to slow sometime in 2018. Trump and congressional Republicans are pushing a tax-cut plan with the aim of lifting GDP gains to 3 percent annually, though analysts expect any economic boost to be modest, on balance, if the proposal becomes law. Consumer spending, which accounts for about 70 percent of the economy, continues to be the main driver of growth, though revisions showed it was slightly weaker than previously estimated on purchases of both durable and nondurable goods. The biggest improvement came in business investment, which made a 1.2 percentage-point contribution to growth, up from 0.98 point in the initial estimate a month ago. In addition to greater spending on transportation equipment, the data also reflected more software spending. Nonresidential structures were revised to a bigger decline. While the first look at third-quarter gross domestic income showed a pickup, the prior quarter was revised downward by 0.6 percentage point, reflecting a smaller gain in wages and salaries. The average of GDP and GDI was a 2.9 percent gain. Corporate profits grew, albeit at a slower year-over-year pace than in the prior period. Price data in the GDP report showed inflation remains behind the Fed’s 2 percent goal. Excluding food and energy, the central bank’s preferred price index tied to personal spending rose at a 1.4 percent annualized rate last quarter, revised from 1.3 percent and following a second-quarter gain of 0.9 percent. Other Details

  • Net exports added 0.43 percentage point to growth, revised up from 0.41 point; inventories added 0.8 point, revised up from 0.73 point
  • Gross domestic income, adjusted for inflation, rose 2.5 percent after a downwardly revised 2.3 percent gain in the prior three months; second-quarter wages and salaries were revised downward by $26.5 billion
  • Nonresidential fixed investment -- which includes spending on equipment, structures and intellectual property -- increased 4.7 percent, revised from 3.9 percent
  • Residential investment fell at a 5.1 percent rate, smaller than previous estimate of 6 percent drop
  • Stripping out trade and inventories -- the two most volatile components of the GDP calculation -- final sales to domestic purchasers climbed 2 percent, revised from 1.8 percent
  • Government spending increased at a 0.4 percent rate, revised from 0.1 percent decline; the figures reflected an upward revision to state and local construction spending

 Q3 GDP Revised Up To 3.3%, Highest In 3 Years -- After the BEA estimated that US GDP rose an already impressive 3.0% in Q3, moments ago the Department of Commerce revised its estimate for third quarter growth to 3.3% annualized, higher than the 3.2% print expected, the highest since the third quarter of 2014. The increase in real GDP reflected increases in consumer spending, inventory investment, business investment, and exports. A notable offset to these increases was a decrease in housing investment. Imports, which are a subtraction from GDP, decreased. The increase in consumer spending reflected increases in spending on both goods and services. The increase in goods was primarily  attributable to motor vehicles. The increase in services primarily reflected increases in health care, financial services and insurance, and recreation services. The increase in inventory investment primarily reflected increases in the manufacturing and wholesale trade industries. The increase in business investment reflected increases in equipment and intellectual property products; these increases were partly offset by a decrease in structures. Putting numbers to the data, Q3 Consumer Expenditures were revised modestly lower, from contributing 1.62% to the bottom line GDP, to 1.60%. This however was offset by upward revisions to all other GDP components, from Fixed Investment (from 0.25% to 0.39%) and Private Inventories (0.73% to 0.80%), to net trade (from 0.40% to 0.44%) and finally, government consumption, which also rose from -0.02% to 0.07%.Some other numbers: Core PCE 1.4%, in line with the expected and above 1.3% from the initial estimate. PCE Prices rose 1.5% in Q3, same as consensus and unchanged from the initial estimate. The GDP Deflator came in a little weaker than expected, at 2.1% vs 2.2% exp. That miss however was offset by GDP Sales, which rose from 2.3% in the preliminary report to 2.5%, above the 2.4% expected. Also notable in today's release was the Corporate Profits number, which surged at a 4.3% annual rate in Q3, after increasing 0.7 percent in the second quarter.  Year over year corporate profits are up 5.4% in 3Q after rising 6.4% prior quarter, driven by financial industry profits which increased 13.7% in 3Q after falling 7.1% prior quarter. Also notable: Federal Reserve bank profits up 1.5% in 3Q after falling 10.6% prior quarter, while the nonfinancial sector profits rose 1% in 3Q after rising 4.9% prior quarter.

Q3 Real GDP Per Capita: 2.53% Versus the 3.30% Headline Real GDP - The Second Estimate for Q3 GDP came in at 3.3% (3.30% to two decimals), up from 3.1% in the Third Estimate of Q2 GDP. With a per-capita adjustment, the headline number is lower at 2.53% to two decimal points. Here is a chart of real GDP per capita growth since 1960. For this analysis, we've chained in today's dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale. The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 9.3% below the pre-recession trend.

Q4 GDP Forecasts --From the Atlanta Fed: GDPNow: The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.4 percent on November 22, unchanged from November 17.  From the NY Fed Nowcasting Report The New York Fed Staff Nowcast for 2017:Q4 stands at 3.7%. From Merrill Lynch:  We continue to track 2.3% for 4Q. From Goldman Sachs:  We revised up our Q4 GDP tracking estimate by a total of three tenths to 2.6% (qoq ar) over the last week  CR Note: These forecasts are for Q4. The second estimate of Q3 GDP will be released this week, and the consensus is that real GDP increased 3.3% annualized in Q3, up from 3.0% in the advance report.

Forecasts Anticipate Another Solid Rise For US Q4 GDP Growth --US economic growth in the fourth quarter is expected to hold at or near the solid 3% pace that’s been reported in Q2 and Q3, according to several recent forecasts. If the outlook is accurate, US GDP growth could post its strongest and longest run of quarterly increases in over a decade. The average forecast points to a 3.3% increase in output for Q4, based on seven recent estimates (see chart below). This projection marks a modest improvement over the solid 3.0% gain in Q3 and the 3.1% rise in Q2 (seasonally adjusted annual rates). Economists at First Trust last week advised that the US economy is “accelerating.”  Halfway through the fourth quarter, monthly data releases show real GDP growing at a 3%+ annual rate. If that holds, it would make for three consecutive quarters of growth at 3% or higher. Believe it or not, the last time that happened was 2004.Some forecasts are more cautious. Survey data published by IHS Markit last week point to an encouraging rise in Q4 growth, but at a rate that’s moderately below the pace in the previous quarters.“US businesses reported another month of solid growth in November, putting the economy on course for a reasonable, though by no means stellar, fourth quarter,” said Chris Williamson, chief business economist at IHS Markit. “Current PMI readings are broadly consistent with GDP growing at an annualized rate of just over 2%.”At the opposite extreme, Now-casting.com’s latest estimate calls for a sharp acceleration in Q4 growth to 4.6%, based on the firm’s Nov. 24 econometric analysis. Keep in mind that it’s still early for Q4 data – the first print of October data is nearly complete, but there are only a handful of preliminary estimates for November’s profile and December is a complete unknown at this point. Based on the published numbers to date, however, it’s fair to say that a disappointing Q4 GDP report at this stage looks unlikely.

T-Bill Anxiety Builds As Trump Tells 'Chuck And Nancy': "No Deal" On Government Shutdown -- Anxiety appears to be building in the Treasury Bill market once again as the yield spread between 12/7 and 12/21 widens to 12bps after President Trump cast doubt on whether he and congressional leaders can agree to keep the government funded.  As AP reports, Trump is meeting with Democratic and Republican congressional leaders at the White House on Tuesday to discuss budget and immigration issues. But, in a tweet, Trump cast doubt on whether they can agree to fund the government beyond a Dec. 8 deadline.  Says Trump: "I don't see a deal!" Trump says Democrats "want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes."    Meeting with “Chuck and Nancy” today about keeping government open and working. Problem is they want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes. I don’t see a deal! — Donald J. Trump (@realDonaldTrump) November 28, 2017  Better add this potential event risk to the reasons to sell vol...

Congress stares down shutdown amid December deluge -- December is shaping up to be the cruelest month for Republicans who control Capitol Hill. Under enormous pressure for a legislative achievement, GOP senators will attempt to follow their House counterparts this week by passing a massive tax overhaul they can send to President Donald Trump by the end of the year. At the same time, they're dealing with Democrats to avert a Christmastime government shutdown. And that battle is complicated even further by an emotional fight over the fate of hundreds of thousands of young undocumented immigrants. “I’m not prepared to go home for the holidays until we get our work done,” Senate Minority Whip Dick Durbin (D-Ill.) said Sunday on CNN’s “State of the Union.” The to-do list, which Trump will discuss with top congressional leaders at a White House meeting on Tuesday, doesn’t end there. Lawmakers are butting heads over a third tranche of emergency aid for hurricane-ravaged areas. Key surveillance powers used by the National Security Agency need to be renewed. Funding for a health insurance program benefiting 9 million lower-income children is already long expired, with several states close to running out of cash. And it all comes against a continuous backdrop of sexual harassment bombshells that are ensnaring a growing number of lawmakers — not to mention a dramatic Senate special election in Alabama that could immediately prompt ethics proceedings, a rarity in the chamber. 

US And South Korea To Conduct Massive Air Force Exercise Aimed At North Korea -- The U.S. and South Korea announced Friday they will conduct a massive air force exercise over the Korean Peninsula next month as a notable show of force targeting North Korea - despite warnings that the Trump administration’s decision earlier this week to add North Korea to the United States’ list of state sponsors of terrorism could further provoke the isolated country. Six F-22 Raptor stealth fighters—which are among the world’s most advanced warplanes—will be sent to South Korea for the drill, a U.S. Air Force spokesman told AFP, which reports:The massive five-day annual exercise comes as Washington pushes what President Donald Trump has called a “maximum pressure campaign” against Pyongyang over its nuclear program.The exercise, named Vigilant Ace, starts on December 4 with 12,000 U.S. personnel and an unspecified number of South Korean airmen flying more than 230 aircraft at eight U.S. and South Korean military bases.Reuters reports that U.S. Marine Corps and Navy troops will also participate in the exercise.Although the drill is conducted annually, it comes as U.S. President Donald Trump continues to antagonize North Korean leader Kim Jong-un on the world stage.As Common Dreams reported this week, after Trump designated North Korea as a state sponsor of terrorism on Monday, the North Korean Central News Agency called the decision a “serious provocation,” and warned that “our army and people are full of rage and anger toward the heinous gangsters” who made the decision.Concerns about the escalating conflict, and the Trump administration’s vocal opposition to engaging in diplomatic discussions with North Korea, continue to rise in the U.S. as well as among North Korea’s neighbors, particularly South Korea.

"It Can Reach Washington, DC": Latest North Korean ICBM Can Hit Anywhere In The Continental US - There was something different about today's ballistic missile test: according to a preliminary analysis from the Pentagon, the rocket was an Intercontinental Ballistic Missile, which was reported to have flown for 50 minutes, on a very high trajectory reaching 4,500 km above the earth (more than ten times higher than the orbit of Nasa’s International Space Station) before coming down nearly 1,000 km from the launch site off the west coast of Japan. This would make it the most powerful of the three ICBM’s North Korea has tested so far. Furthermore, the mobile night launch appeared aimed at testing new capabilities and demonstrating that Pyongyang would be able to strike back to any attempt at a preventative strike against the regime.“The missile was launched from Sain Ni, North Korea, and traveled about 1,000 km before splashing down in the Sea of Japan, within Japan’s economic exclusion zone. We are working with our interagency partners on a more detailed assessment of the launch,” Pentagon spokesman, Col Robert Manning said.This is concerning for one big reason: according to General Mattis, the North Korean ICBM "went higher, frankly, than any previous" and "North Korea can basically threaten everywhere in the world." This was confirmed by North Korea missile analyst, Shea Cotton, who cited Allthingsnuclear author David Wright, and who told the BBC that the initial estimates of the ICBM test mean that North Korea can now reach New York and Washington DC.

North Korea tests powerful new ICBM, claims it can strike all continental US | South China Morning Post: North Korea said Wednesday it had achieved its goal of becoming a nuclear state after successfully testing a new intercontinental ballistic missile that put the “whole mainland of the US” within its range. After watching the launch of the Hwasong-15, the North’s leader Kim Jong-un “declared with pride that now we have finally realised the great historic cause of completing the state nuclear force”, the official KCNA news agency said. The test triggered global outrage with US Defence Secretary Jim Mattis saying it marked a significant step toward North Korea building missiles that can “threaten everywhere in the world, basically”. It was the first missile test of any kind since September 15, and squashed speculation that the North may have held back to open the door to a negotiated solution to a nuclear stand-off. “The ICBM Hwasong-15 type weaponry system is an intercontinental ballistic rocket tipped with super-large heavy warhead which is capable of striking the whole mainland of the US,” KCNA said. It said the development of the weapon would defend the North against the “US imperialists’ nuclear blackmail policy and nuclear threat”. While Pyongyang has yet to prove its mastery of the re-entry technology required to bring a warhead back through the Earth’s atmosphere, experts believe it is on the threshold of developing a working intercontinental nuclear strike capability. Wednesday’s test caused “grave concern” in China and deep consternation among the North’s other neighbours. China Foreign ministry spokesman Geng Shuang said Beijing’s proposal for North Korea to freeze weapons tests in return for the US to suspend military drills in the region was the best approach to ease tensions. Washington has rejected that approach. China hopes all sides will work on the “peaceful settlement” of the issue as a military option is not the solution to resolve the crisis, Geng told a regular news briefing. 

North Korea: Trump threatens ‘major sanctions’ after latest missile test -- Donald Trump threatened to impose major sanctions on North Korea in response to Pyongyang’s latest test of a ballistic missile, that appeared capable of reaching most if not all of the US mainland. The US president’s remarks were followed by UN ambassador Nikki Haley saying the ballistic missile launch “brings us closer to war” at an emergency UN security council meeting, which would end the North Korean regime. Trump said in a tweet he had spoken with the Chinese leader, Xi Jinping, about “the provocative actions of North Korea”, and promised: “Additional major sanctions will be imposed on North Korea today. This situation will be handled!” In remarks later, Trump departed from a speech about tax cuts to aim a barb at the North Korean leader, Kim Jong-un, who he has previously referred to as “Little Rocket Man”. “Little Rocket Man, he is a sick puppy,” the president said. Later Wednesday, at the UN, Haley said if war comes as a result of further acts of “aggression” like the latest launch “make no mistake the North Korean regime will be utterly destroyed”. Haley says the Trump administration warned North Korea that its future is in the hands of its leaders and the choice was theirs. With Tuesday’s launch, she said, Kim’s regime made a choice “and with this choice comes a critical choice for the rest of the world”. She called on all countries to cut all ties to North Korea. The security council was meeting in New York to discuss possible new measures, and the US secretary of state, Rex Tillerson, made clear that the US would press for tougher measures allowing North Korean shipping to be stopped and searched on the high seas. Trump also apparently “emphasized the need for China to use all available levers to convince North Korea to end its provocations and return to the path of denuclearization”. 

Senator Graham Warns U.S. "Headed To War" With North Korea "If Things Don't Change" -- Following yesterday's missile launch from North Korea, Senator Lindsey Graham joined CNN's Wolf Blitzer to warn that the U.S. is "headed to war" with the "crazy man" in North Korea "if things don't change."  Here are some excerpts from the interview via RT:The US will go to war with North Korea "if things don't change," Sen. Lindsay Graham said, acknowledging that "a lot of people would get hurt and killed." Meanwhile, Russia and China have once again urged for both sides to exercise restraint and dialogue."If we have to go to war to stop this, we will," the Republican senator told CNN's Wolf Blitzer on Tuesday. "If there's a war with North Korea, it will be because North Korea brought it on itself, and we're headed to a war if things don't change."Graham stated that neither he nor US President Donald Trump wants a war, but stressed that "we're not going to let this crazy man in North Korea have the capability to hit the homeland." When asked by Blitzer about civilian casualties that would occur in a war with North Korea, including in the densely populated South Korean capital of Seoul, Graham said: "It's not lost by me what a war would look like with North Korea. One, we would win it, but a lot of people would get hurt and killed..."

North Korea Says It Is "Ready For Nuclear War" With The US -- A Russian lawmaker on Friday said that North Korea doesn’t want nuclear war with the US - but that the country is “morally ready” for war after US threats and if it's left with no other option, RIA reported. At the same time, Russia's foreign minister, Sergei Lavrov, chimed in, and according to interfax, said there are people in Washington "who wish to provoke Pyongyang to reckless actions" and warned the US that if it "wants to destroy North Korea" then it is playing with fire and making a great mistake. These remarks followed reports early Friday that North Korea would agree to peace talks with the US if the international community is ready to recognize it as a nuclear power. The news was relayed by a Russian delegation to Pyongyang. The delegation added that the North believes it was forced to be aggressive and that the country won’t give up its nukes under any circumstances. “[Pyongyang] are ready to talk, however the [North] Korean side has its own condition – it should be recognized as a nuclear power,” Vitaly Pashin, a member of the Russian delegation, told news agencies upon their return. The North is now ready to negotiate with Washington “under parity terms” with the participation of Russia as a third party, he added.Tensions spiked earlier this week when the North carried out its first missile launch in more than two months, ending the longest period of calm so far this year, when it test fired the country's first true ICBM. Observers noted that the Hwasong-15 missile reached an unprecedented height of 4,500 kilometers, and flew for more than 50 minutes. Experts have concluded that the North now likely has the capability to strike anywhere in the continental US.

China and US step up military talks to prepare for the worst on North Korea | South China Morning Post:  Military officials from China and the United States are stepping up communications on the Korean peninsula situation, defence analysts said, as generals from the two sides wrapped up talks.Meetings in Washington on Wednesday and Thursday – chaired by Major General Shao Yuanming, deputy chief of the Joint Staff Department, and Lieutenant General Richard Clarke, US Joint Chiefs planning director – were held just hours after Pyongyang’s most powerful missile test to date.Chinese defence ministry spokesman Senior Colonel Wu Qian said on Thursday that the talks were held to discuss crisis management and enhance mutual trust, without giving details. The talks were agreed by the two nations in August, but took place after North Korea launched the Hwasong-15 intercontinental ballistic missile that could strike “the whole mainland of the United States”. Beijing-based military analyst Zhou Chenming said the talks were a chance for the US and Chinese generals to exchange views on the Korean peninsula. “I expect the Chinese and US would have raised the topic of how to respond to a North Korea crisis,” he said. “But given the lack of deep trust, it’s unlikely a detailed plan was discussed during the meetings.” Observers said China and the US would engage in more military talks amid concern over Washington’s warnings that it may take the military option against Pyongyang.

Trump says China's diplomacy failing to rein in North Korea | Asia Times: US President Donald Trump dismissed a Chinese diplomatic effort to rein in North Korea’s weapons program as a failure on Thursday, while Secretary of State Rex Tillerson said Beijing could do more to limit oil supplies to Pyongyang. In a tweet, Trump delivered another insulting barb against North Korean leader Kim Jong Un, who he called “Little Rocket Man” and a “sick puppy” after North Korea test-fired its most advanced missile to date on Wednesday.Russian Foreign Minister Sergei Lavrov said Washington’s approach was dangerously provocative. Trump’s tweets inflamed tensions reignited this week after North Korea said it had successfully tested a new intercontinental ballistic missile in a “breakthrough” that put the US mainland within range of its nuclear weapons. “The Chinese envoy, who just returned from North Korea, seems to have had no impact on Little Rocket Man,” Trump said on Twitter, a day after speaking with Chinese President Chinese President Xi Jinping and reiterating his call for Beijing to use its leverage against North Korea. Tillerson on Thursday welcomed Chinese efforts on North Korea, but said Beijing could do more to limit its oil exports to the country. “The Chinese are doing a lot. We do think they could do more with the oil. We’re really asking them to please restrain more of the oil, not cut it off completely,” Tillerson said at the State Department. China is North Korea’s neighbour and its sole major trading partner. While Trump has been bellicose at times in rhetoric towards North Korea, Tillerson has persistently held out hopes for a return to dialogue if North Korea shows it is willing to give up its nuclear weapons. 

Trump administration escalates threat to “utterly destroy” North Korea - The Trump administration is escalating its incendiary threats against North Korea in the wake of the test Tuesday of an intercontinental ballistic missile reportedly capable of reaching the east coast of the United States.At an emergency meeting of the United Nations Security Council on Wednesday, the US ambassador to the UN, Nikki Haley, warned that “if war comes, make no mistake, the North Korean regime will be utterly destroyed.” The “utter destruction” of the regime can only mean a genocidal war against the country of 25 million people.Haley directed her fire as much toward China as toward North Korea, reporting that President Trump had called Chinese President Xi to demand that China cut off all oil exports to the impoverished Asian country. “China must show leadership and follow through. China can do this on its own,” she said, “or we can take the oil situation into our own hands.” What precisely was meant by this threat, Haley did not elaborate.It is clear that the United States is in the advanced stage of planning some form of military operation against North Korea, which, if carried out, would have catastrophic consequences even if it did not develop into an exchange of nuclear weapons. In a signal that the Trump administration is moving to formally abandon its pretenses of diplomacy, the New York Times reported on Thursday that the White House is planning to push out Secretary of State Rex Tillerson, whom Trump previously publicly rebuked for “wasting his time” by pursuing negotiations with North Korea. Tillerson had said on Tuesday, following the ICBM test, that “diplomatic solutions remain viable and open for now.”

Is There a More Dangerous Member of Congress than Tom Cotton? - A reshuffling of President Trump’s foreign policy apparatus, reported by The New York Times on Thursday, would see Secretary of State Rex Tillerson ushered out the door, to be replaced by current director of the CIA, Mike Pompeo.  That opening at the CIA would, in turn, be filled by Tom Cotton, a Republican senator from Arkansas. Is there a more dangerous member of Congress than Tom Cotton? The hawkish Republican senator and former U.S. Army captain has never hidden his relentless obsession with confronting Iran. He has led the charge on Capitol Hill to dismantle the nuclear deal with the Islamic Republic while constantly banging the drum for tougher sanctions and even airstrikes against Iranian nuclear facilities. With apologies to Winston Churchill, Cotton wants “war-war” not “jaw-jaw” — and he seems to have won over the know-nothing president of the United States.  Trump refused to certify to Congress that the Iran nuclear deal is in the U.S. national interest and warned that U.S participation in that agreement could “be cancelled by me, as president, at any time.” You might call Cotton, who is now being touted as the next director of the CIA, the “Trump whisperer.” In fact, according to the Weekly Standard, in a recent meeting with his top national security and foreign policy advisers, “having failed to receive the decertification option from his own team, Trump called Senator Tom Cotton and put him on speakerphone. The president asked Cotton to make the case for decertifying the Iran deal. Cotton took five minutes and walked Trump and his team through the case, emphasizing one point in particular: re-certifying the deal would be declaring that it was in the national security interest of the United States, something Cotton understood that Trump didn’t believe.”

 Trump Is Staying in Syria, Where America’s Enemies Hold All the Cards - It’s usually the victors who convene peace conferences, to cement their gains, and that’s what Russia and Iran are trying to do in Syria. The wild card in their calculations is Donald Trump’s America. U.S. troops, in Syria to fight Islamic State, won’t be packing their bags now the jihadist group is essentially beaten. They’re staying on. But it’s not clear what role they’ll play in the wider Syrian conflict that’s also entering its endgame. Washington is in the unaccustomed position of watching from the sidelines -- while its rivals, and some of its allies, team up on a peace plan.  In charge of that plan is Russian President Vladimir Putin, who hosted a crucial meeting Wednesday with his counterparts from Iran and Turkey. There’s a “ real chance” to end the war, Putin said at the start of the summit in the Black Sea resort of Sochi. Few concrete details emerged as it wrapped up.  Some elements of the settlement Russia is seeking are clear – Bashar al-Assad is set to stay in power – and others are more contentious, like the fate of Syrian Kurds. America’s sole effective allies on the ground, they’re distrusted in Ankara and Tehran. Beyond those details, a wider pattern is emerging. America has thrown in its lot with Saudi Arabia and Israel. Ranged against that unlikely coalition is an increasingly powerful alliance between the three leaders meeting in Sochi. When it comes to designing the settlement that could reshape the Middle East, they hold most of the cards. . “They’re the most dominant on the battlefield, and they’re the most dominant in terms of diplomacy. The U.S., in comparison, is strategically adrift.’’

Pentagon To Admit To 2,000 Troops In Syria; Number Likely Far Higher - General Had Previously Said US Had 4,000 Troops There... US officials said on Friday that the Pentagon is expected to concern confirm that there are “about 2,000” US ground troops in Syria, a major increase from the roughly 500 that they officially claim is the case.An accounting system, known as the Force Management Level (FML), was introduced in Iraq and Syria under the Obama administration as a way to exert control over the military.But the numbers do not reflect the extent of the US commitment on the ground, since commanders often find ways to work around the limits, sometimes bringing in forces temporarily or hiring more contractors.Current FML figures are officially 5,262 in Iraq and 503 in Syria, but officials have privately acknowledged that the real number for each country is more. The US has overtly lied about troop levels in Syria consistently throughout their deployment.Less than a month ago, Gen. James Jarrard told reporters the US had about 4,000 troops in the country...though the Pentagon at the time claimed he was wrong and the real number was only 503. Adding to the confusion, the Defense Department had also offered figures to Congress on overseas deployments, and those figures said 1,723 troops were in Syria at the time. Despite this, the official troop figure has not changed. President Trump has made a point of troop levels needing to be kept secret from “the enemy,” but consistent lies from the Pentagon about their deployments have made the figures less a closely guarded secret than a mockery of transparency. While 2,000 is almost certainly closer to the truth than 500, it’s not necessarily the actual figure.

American policy totally failed in Syria — let’s be thankful -- The Syrian and Russian presidents spent last Monday talking by the seaside, as was widely reported. This was their first encounter since the fall of 2015, just after Russia, fed up with American support for jihadists in the service of another “regime change” operation, intervened to turn the war to Damascus’ advantage. The occasion this time is just as momentous. The war has entered it mop-up phase; it is time to structure a political solution. This was Putin’s explicit point.  Fold into this the telephone exchange Putin had Tuesday with President Trump. It was an hour long. A settlement in Syria was the primary but not the only topic, we are told. And note this connection: Putin’s report to the Trump White House on his talks with Assad came 10 days after the Russian and American presidents agreed in Vietnam to make a concerted effort to end the Syria tragedy. There is a great deal of good in these events. There may be many readers incapable of seeing this, such has been the astounding wall of propaganda erected to obscure a plain view of the Syria crisis. Accommodations to reality are now not likely to be far off. The media are already making theirs, a point I will revisit. The war in Syria indeed draws to an end, most obviously. There will be more mess, in all likelihood — wars almost always having frayed ends — but the outcome is clear. The Islamic State, along with the sectarian Salafists the U.S. financed and armed, are headed into history. Syria will remain intact — averting, if narrowly, failed-state status. The Putin-Assad meeting anticipated by a week another round of the peace talks Russia, Iran and Turkey have sponsored all year. In effect, the Russian leader has just shown Assad his chair at the mahogany table.  Simultaneously, Iran and Turkey agreed to support a Russian-sponsored “peace congress,” date unspecified, with very large ambitions. These include “a framework for the future structure of the state,” as Putin put it, “the adoption of a new constitution, and, on the basis of that, the holding of elections under United Nations supervision.”

Report: Trump Is Expected to Announce Embassy Move to Jerusalem -- Trump is reportedly going to announce that the U.S. embassy in Israel will be moving to Jerusalem:The Israeli government considers it extremely likely that US President Donald Trump will declare in the next few days that he recognizes Jerusalem as Israel’s capital and that he is instructing his officials to prepare to move the US Embassy to Jerusalem from Tel Aviv, an Israeli TV report claimed Wednesday.The Hadashot news report came a day after US Vice President Mike Pence said Trump was “actively considering” moving the US embassy.Presidents have routinely issued a waiver to block the relocation of the embassy for more than twenty years. Trump signed a waiver to this effect in June, and the next deadline comes up on Friday. Like many previous presidential candidates, Trump had promised during his campaign to relocate the embassy if elected. If this report is correct, it seems that he may follow through. That would be consistent with the extremely one-sided hawkish “pro-Israel” views of his administration and his party, but it would represent a break with decades of U.S. policy and risks triggering a new round of violence between Palestinians and Israelis. There is a real chance that it could be the spark that leads to a third intifada with all of the destruction and loss of life that would entail.  Moving the embassy would be a reckless symbolic gesture that threatens to have very serious consequences for Israeli and Palestinian security. It is a sop to hard-liners and extremists that benefits no one. It goes without saying that doing this would snuff out what little hope of resuming peace negotiations still remains, and it would gain the U.S. absolutely nothing except more opprobrium and hostility throughout the region.

Supreme Court denies review of Yemen drone strike - Jurist - The US Supreme Court stated on Monday that it would not review [order list, PDF] a lawsuit over a drone strike in Yemen that killed five people.  Earlier this year, the US Court of Appeals for the District of Columbia [official website] dismissed [decision, PDF] a lawsuit by the families of two Yemeni men allegedly killed by a US drone strike in 2012. The plaintiffs argued that two family members were victims of a "'signature strike,' an attack where the US targets an unidentified person ... based on a pattern of suspicious behavior as identified through metadata." Further, the plaintiffs argued that the drone operators waited until the two men joined the other three men to strike, in direct violation of international law, partly because the operators had ample opportunity to strike when the men were not nearby. A unanimous ruling by a three-judge panel upheld a lower court's finding that the suit lacked the authority to question the government's decision over the missile strike because "a court should not second-guess an Executive's decision about the appropriate military response." The court went on to say that it is a congressional, rather judicial, power to check the executive branch's authority of military power. It urged the Executive and Congress to work together to "establish a clear policy for drone strikes and precise avenues for accountability." Drone use has been a controversial issue both in terms of small domestic drones and larger drones being used abroad by the US military. In October 2014 UN experts urged the international community to have greater accountability [JURIST report] and transparency when it comes to the use of drones. In August of 2014 the UN stated that if the US is to use drones they must comply [JURIST report] with international law.

New Drone Strikes Underscore, Again, How Much Power We Give Trump - Matt Taibbi– While all of us were preparing for Thanksgiving dinner, the United States was busy preparing an attack on the Yemeni province of Badhya. One minority-ish report by Gulf News Yemen,one of the few on-the-ground sources that covers such attacks, had details of the killings. Quoting an on-the-ground activist, it added:  "The recent US drone strikes have also killed five civilians, displaced residents and caused panic in the two areas." Drone strikes have intensified since Donald Trump assumed the presidency. This fact should surprise no one. The ability to kill by remote control without judicial review was one of the many gifts we bequeathed to Trump prior to his inauguration. Donald Trump is unpopular, and members of both parties will use incidents like this to highlight his genuine lack of leadership, his tasteless interactions with soldiers and his lack of a clue as it pertains to how to stabilize the Middle East.But the basic premise of his military's presence in this part of the world has consistently gone unchallenged in the U.S. media since January, as it was mostly unchallenged under both Obama and Bush. The core idea of our presence in places like Niger is to partner with local countries, often ones with monstrous human rights records themselves, to make remote war easier. These countries often accept massive amounts of military aid and other geopolitical goodies, and repay us in on-the-ground intel about whom to drone-bomb in our ongoing, undeclared, ever-bloodier War on Terror.

Russia Responds: Putin Signs 'Foreign Agents' Media Bill Into Law -- Nearly two weeks after the Duma, the lower house of Russia’s parliament, approved legislation allowing authorities to designate US-backed media organizations as foreign agents, Russian President Vladimir Putin has officially signed the bill into law. The law allows Moscow to label foreign media outlets as “foreign agents” in response to Washington’s decision to force Russia Today, a media organization funded by the Russian government that has been operating in the US since 2005, to register as a foreign agent. As Reuters points out, the new law has been rushed through both Russian houses of parliament in the last two weeks. It will now allow Moscow to force foreign media to brand news they provide to Russians as the work of “foreign agents” and to disclose their funding sources. The US intelligence community has accused the Kremlin of using Russian media organizations it finances to influence US voters, and Washington has since required Russian state broadcaster RT to register a U.S.-based affiliate company as a “foreign agent." Last week, the Russian judiciary published a list of nine US-funded media organizations that would be added to the list. The outlets are the US-government-sponsored Voice of America (VOA) and Radio Free Europe (RFE), otherwise known as Radio Liberty, radio channels, along with seven separate Russian or local-language news outlets run by Radio Free Europe and Radio Liberty.

 Diplomats Sound the Alarm as They Are Pushed Out in Droves - Of all the State Department employees who might have been vulnerable in the staff reductions that Secretary of State Rex W. Tillerson has initiated as he reshapes the department, the one person who seemed least likely to be a target was the chief of security, Bill A. Miller.. Congress even passed legislation mandating that the department’s top security official have unrestricted access to the secretary of state. But in his first nine months in office, Mr. Tillerson turned down repeated and sometimes urgent requests from the department’s security staff to brief him, according to several former top officials in the Bureau of Diplomatic Security. Finally, Mr. Miller, the acting assistant secretary for diplomatic security, was forced to cite the law’s requirement that he be allowed to speak to Mr. Tillerson.  Mr. Miller got just five minutes with the secretary of state, the former officials said. Afterward, Mr. Miller, a career Foreign Service officer, was pushed out, joining a parade of dismissals and early retirements that has decimated the State Department’s senior ranks. Mr. Miller declined to comment. The departures mark a new stage in the broken and increasingly contentious relationship between Mr. Tillerson and much of his department’s work force. By last spring, interviews at the time suggested, the guarded optimism that greeted his arrival had given way to concern among diplomats about his aloofness and lack of communication. By the summer, the secretary’s focus on efficiency and reorganization over policy provoked off-the-record anger. Now the estrangement is in the open, as diplomats going out the door make their feelings known and members of Congress raise questions about the impact of their leaving.

Trump Takes Rare Trade Action Against China -- During his recent trip to Beijing, Donald Trump sounded less like a pugnacious populist than a giddy globalist. The president raved about the superlative beauty of Chinese military parades, the joys of eating dinner with Xi Jinping, and the “absolutely terrific” bilateral meetings he had with the Communist leader. Meanwhile, Trump neglected to utter a critical word about Beijing’s human-rights abuses at home or belligerent activities in the South China Sea.  But on Tuesday morning, Ely Ratner of the Council on Foreign Relations predicted that Trump’s love affair with Beijing would be short-lived for three reasons:

  • 1) Trump is finally getting his national security team in place — and that team is composed almost entirely of China hawks.
  • 2) That team is soon to produce two official strategy documents, which will likely name China as “first and foremost a strategic competitor.”
  • 3) Politics. As Ratner writes:  Consider how Democrats and even some Republicans have pulled Trump back to a more moderate position on Iran. With China, it’s going to be the opposite. The dominant criticism in Washington — across the political spectrum — is that Trump has failed to deliver on China.

On Tuesday afternoon, the Trump administration lent credence to Ratner’s theory: The Commerce Department announced that it will be launching a pair of investigations into alleged Chinese trade violations. Specifically, the administration will investigate whether China is exporting aluminum to the United States at artificially low prices, thereby causing unfair injury to U.S. firms. The investigations could lead steep duties on more than $600-million-worth of aluminum sheet imports by early next year. Notably, the Commerce Department “self-initiated” these investigations — as opposed to taking them up in response to a petition from a U.S. firm. The American government has not self-initiated such a trade measure since the George H.W. Bush administration cracked down on Canadian softwood lumber imports in 1991. Trump “made a promise to American businesses, workers and farmers that he would vigorously enforce our trade laws and be more enforcement-minded than our predecessors,” Commerce secretary Wilbur Ross said Tuesday. “Today’s action shows that we intend to make good on that promise to the American people

On Trade, Trump Puts Corporate America First - Dani Rodrik - The latest round of North American Free Trade Agreement negotiations came to an end last week without a deal. It’s not clear whether a compromise will be reached or President Trump will make good on his threat of pulling out. But we have seen enough of his approach to trade to know it is fundamentally mistaken and counterproductive. Mr. Trump is not wrong to think that trade agreements have shortchanged America as a whole while enriching corporate and financial interests. He was right to walk away from the Trans-Pacific Partnership, an agreement that was less about free trade and more about special privileges for investors, large companies and pharmaceutical businesses.But Mr. Trump made a mistake by prioritizing a Nafta renegotiation. The jobs lost to Mexico will almost certainly never come back. Automation ensures that manufacturing employment will continue to be a small percentage of the labor force. Moreover, trade barriers would be disruptive to employment in their own right: United States auto production now relies on extensive North American supply chains in auto parts.Mr. Trump’s focus on the bilateral trade deficit with Mexico is also a red herring. The overall trade deficit of the United States is determined primarily by macroeconomic factors — American consumers’ saving propensities, domestic corporations’ investment behavior and the federal government’s fiscal and monetary policies. Trade policies with Mexico can do very little to alter this picture. But the biggest flaw of this administration’s trade policy is that it falls squarely within the pervasive established mercantilist tradition. For mercantilists, the purpose of trade agreements is to open up other countries’ economies to our companies to the maximum extent possible while minimizing how much we open up ours. Everybody else must adjust how their economy works, while we maintain our own ways. Under the guise of fairness to workers as a whole, this approach equates national interest with the profit-seeking behavior of United States corporations or protectionist groups. 

Trump Sparks Outrage In UK With "Truculent Tweet" To Theresa May After Retweeting Far-Right Videos --President Trump sparked outrage among Britain’s political establishment on Thursday with a sharp rebuke on Twitter of Prime Minister Theresa May on Twitter after she criticized him for retweeting British far-right anti-Islam videos. Following Trump's condemnation by British politicians who lashed out at the US president for sharing videos originally posted by a leader of a British far-right fringe group, in an unprecedented attack on Theresa May, Trump replied with what Reuters dubbed an "unrepentant message":“Theresa @theresamay, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine,” he tweeted..@Theresa_May, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine!— Donald J. Trump (@realDonaldTrump) November 30, 2017Trump initially addressed his tweet to a Twitter handle that was not May‘s, though he later retweeted to the British leader’s correct account.Trump truculent response prompted a new round of indignation and anger in Britain, where there have been several major Islamist militant attacks this year, with one minister describing Trump’s tweets as “alarming and despairing”. London’s Muslim mayor, Sadiq Khan, a Muslim, said May should withdraw an offer of a state visit to Britain which has already been extended.   President Trump has used Twitter to promote a vile, extremist group that exists solely to sow division and hatred in our country. It's increasingly clear that any official visit from President Trump to Britain would not be welcomed.https://t.co/rwJJ5saSAb pic.twitter.com/bus3kMWIfk — Mayor of London (@MayorofLondon) November 30, 2017

Video Shared By Trump Featured US-Backed FSA Commander Destroying Virgin Mary Statue In Syria - While Trump's Twitter activity from yesterday continues to drive media and political outrage,especially in the UK, and with the focus of the frenzied coverage being that the president retweeted a far-right U.K. leader's "anti-Muslim videos", there is actually something much more interesting concerning the context to the “Muslim Destroys A Statue Of Virgin Mary” video. That particular video shared by the president is from 2013 and shows a Free Syrian Army (FSA) commander named Omar Gharba destroying a Virgin Mary statue as the group invaded a Syrian Christian town. In a geopolitical and deeply ironic twist demonstrating the absurdity and contradictions of US foreign policy, the radical Islamist commander was actually supported by the United States at the time as part of the FSA, which the media and US government deemed "moderate".  So a sitting US president shared a video which reveals a Syrian "rebel" fighter committing war crimes who was part of one of the very groups backed by the CIA as official US policy under the Obama administration. Of course it is likely that Trump himself is not fully aware of this, yet the astounding geopolitical irony in this should not be missed, even as public outrage is reduced to merely discussing "anti-Muslim bigotry" and whether or not Trump is being "presidential".

Trump Cancels UK "Working Visit" Amid Outrage Following "Britain First" Retweets -- As discussed yesterday, President Donald Trump’s decision to unleash a series of "truculent tweets" showing videos of Islamist mobs destroying Christian artifacts and, in one video, pushing a boy off a building has elicited howls of outrage from both American lawmakers and liberal leaders across the "open" west.Amid the growing global outrage, no world leader responded more stridently than UK Prime Minister Theresa May, who successfully pressured US diplomats to drop plans for Donald Trump to conduct a visit to Britain in January amid a war of words between the two countries’ leaders. May emphatically criticized Trump for tweeting the videos, saying “I think we must all take seriously the threat that the far-right poses.”Trump had been scheduled for a ‘working visit’ in the first month of 2018 to formally open America’s new London embassy, according to the Telegraph.The trip, a scaled down version of a state visit with no meeting with the Queen, was organized to allow Trump to visit the UK without triggering the outpouring of protests that would accompany an official state visit.According to the Telegraph, rather than being cancelled, Trump’s brief working visit has been “pushed into the long grass.” Meanwhile, no new data have been released.A senior US diplomat appeared to confirm this: "The idea of a visit has obviously been floated, but not December and not January. I would not expect a Trump visit in January."  Amber Rudd, the Home Secretary, hinted the trip could be delayed, telling MPs on Thursday morning that “we have yet to make the arrangements” and “dates have not yet been agreed."

GOP tax bill draws fire from AARP, universities | TheHill: The tax bills that Republican leaders have put forward in the House and Senate have broad support from their members, conservative activists and business groups. But other stakeholders have been sounding alarms over provisions in the legislation. Those groups are lobbying furiously for their preferred changes, but there’s no guarantee their requests will be heard, given that GOP lawmakers are aiming to move quickly and are hoping to get legislation enacted by Christmas. Here’s a rundown on who’s pushing back against aspects of the GOP’s tax plans.

  • The AARP has raised concerns about provisions in both the House and Senate bills, warning they would be harmful to older Americans. Both bills would increase the deficit and could trigger cuts to Medicare if Congress doesn’t waive sequestration rules for federal spending. The AARP is also concerned that many seniors would see their taxes go up under the bills. There are also provisions unique to the House and Senate bills that the group opposes. The AARP opposes the House’s push to repeal the deduction for medical expenses and the Senate’s push to repeal the ObamaCare individual mandate.
  • Key groups in the housing industry took issue with the tax bills even before they were released, warning that they reduce incentives for homeownership.  Both bills would substantially increase the size of the standard deduction taxpayers can take. This would reduce the number of people who take the mortgage interest deduction and concentrate those who do claim the preference at the upper end of the income scale. The House bill would cap the mortgage interest deduction for new mortgages at the first $500,000, down from $1 million under current law, and would eliminate the deduction for second homes. It also would eliminate the deduction for state and local income and sales taxes and would cap the deduction for state and local property taxes at $10,000.
  •  The bills would have a significant impact on the municipal bond market, which plays a key role in the financing of infrastructure. A broad array of groups are involved in the market, including state and local governments that issue the bonds; nonprofit and private parties that benefit from tax-exempt debt; and individuals, banks and insurance companies that purchase the bonds. Both bills would do away with the ability for state and local governments to sell tax-exempt “advance refunding bonds,” which allow municipalities to refinance their debt at lower interest rates and realize savings.
  • Nonprofits have several concerns with the GOP’s legislation. The increase in the standard deduction in the House and Senate bills would reduce the number of people who would claim the itemized deduction for charitable contributions. Charities are concerned that this change could lead to a decline in charitable giving. Additionally, the House bill would scale back the “Johnson amendment” that prevents churches and other organizations with 501(c)(3) tax-exempt status from endorsing or opposing political candidates. Under the House bill, nonprofits would be allowed to engage in political speech from 2019 to 2023 as long as the speech is in the ordinary course of business and expenses related to the speech is minimal.
  • Higher education officials are concerned that colleges and their students would be hurt by a number of provisions in the legislation. Like other nonprofits, private colleges are concerned that fewer people would take the charitable contribution deduction, and both the House and Senate bills would include an excise tax on certain university endowments. There are also several provisions that are only in the House bill that worry colleges. These include the elimination of tax-exempt private-activity bonds, the elimination of a lifetime learning credit for part-time students and the elimination of the deduction for student loan interest payments.

GOP tax agenda is a grave threat to people in poverty | TheHill - What do taxes have to do with poverty and opportunity? A great deal, actually. Taxes might seem painful and tedious — painful to pay and tedious to deal with — but they are important. Taxes pay for vital services that ensure equal opportunity, promote upward mobility, and ultimately benefit all of us. Tax policies are the less glamorous half of our public budgets — those profoundly moral documents that reflect our country’s priorities and values. Congressional Republicans have a once-in-a-generation opportunity to reform the tax code to make it more fair and just, and to improve the lives of working people and people living in poverty. And what have they produced? An agenda that is a moral and fiscal disaster. Just as the season of Giving takes hold, Congressional Republicans are advancing tax legislation at a breakneck pace that would deliver massive giveaways to the ultra-rich at the expense of everyone else. House Republicans voted earlier this month to pass their legislation, while the Senate could vote as early as this week to advance theirs. Though there are some differences between the two plans, the broad contours are largely the same: both would give lavish tax cuts to our country’s largest corporations and wealthiest people, while raising taxes on millions of middle- and moderate-income households. Furthermore, both plans pave the way for a large-scale assault on crucial basic assistance programs. After driving up the federal deficit by some $1.5 trillion dollars over the next decade to pay for those tax cuts to the super-wealthy, lawmakers will likely use these shortfalls as pretext to slash programs like Medicaid, Medicare, and food and housing assistance — just as Congressional Republicans voted to do earlier this year. 

The Republican Tax Plan Contains More Middle-Class Pain Than Even Its Critics Are Saying -- On the morning of November 16th, a few hours before a vast majority of Republicans in the House of Representatives voted for their party’s tax-reform plan, four Republican congressmen from New York held a press conference to express their displeasure with the bill. “A lot of the numbers we’ve seen over the last few days don’t apply to New York,” Representative Daniel Donovan, of Staten Island—the only Republican congressman from New York City—said. He and his colleagues had gathered to make a point that has become one of the sharpest criticisms of the legislation: that it penalizes states that tend to vote for Democrats over Republicans. “There was a study I saw showing four states will end up paying sixteen billion dollars more in taxes, and forty-six states will pay less,” Donovan said. “Those states are New York, New Jersey, California, and Maryland. Those are the people that are subsidizing this tax break for the rest of America.”  This blue-state argument has been persuasive—Donovan and twelve other Republicans from New York, California, New Jersey, and North Carolina bucked their party and voted against the House bill. Yet it risks missing the provision that might have the most devastating effect on middle-class taxpayers nationwide: the elimination of the personal exemption. Currently, married couples earning up to around three hundred and twenty thousand dollars in adjusted gross income can deduct a personal exemption of approximately four thousand dollars from their taxable income per family member (for self, spouse, and dependents). The elimination of these exemptions—which was part of the bill the House passed, and is part of the bill now making its way through the Senate—will translate to a roughly $1.6 trillion tax increase over the next ten years. “That is by far the single largest tax increase in the bill,”. Eliminating the personal exemption could affect many more families, in more parts of the country, than most critics of the bill have previously made clear to the public. This change could especially penalize families with more than one child. And while many analyses of the Republican plan have looked ahead to its effects five or ten years from now, dropping the personal exemption will have repercussions from the outset.

A Tax Plan for the Season - Menzie Chinn - The Joint Committee on Taxation (JCT) has evaluated the distributional impact of the Senate’s plan. CBPP has graphically depicted the impact on households, adjusting the JCT figures to account for the provisions regarding estate taxes:  In other words, by 2025, households with income less $30,000 experience a net decrease in after-tax income. Households with income greater than that experience net increases. The category of $500,000-$1,000,0000 experience a 3.1% gain(!).  CBPP summarizes the causes for this regressivity concisely:The bill’s large tax cuts for high-income households reflect a series of provisions that provide large benefits to the wealthy but little or nothing to everyone else. These include: corporate rate cuts, the benefits of which flow overwhelmingly to wealthy investors and CEOs; the large estate tax cut; a tax cut for “pass-through” income, or income that owners of such businesses as partnerships, S corporations, and sole proprietorships claim on their individual tax returns and that is taxed at the same rates as wages and salaries; repeal of the Alternative Minimum Tax, which is designed to ensure that the wealthiest households pay at least some minimum level of tax; and a cut in the top individual income tax rate. The CBPP calculations do not take into the expenditure-side implications of implementing the tax plan and budget bill. As noted in this post, spending cuts may be necessary in order to conform to the Senata budget bill, which limits deficit increases relative to baseline to $1.5 trillion over ten years. Nor do they take into account the higher premiums that would likely occur with the elimination of the ACA individual mandate. Let me just say, I am unsurprised by the sheer brutality of the Senate GOP leadership. This tax plan perfectly epitomizes the Hobbesian view of these people

Trump tormenting trio endangers the tax plan - Axios - With the Senate aiming for a tax vote late this week, White House and Senate aides express constant behind-the-scenes concern about three senators who are a) worried about the deficit, (b) wholly unbeholden to leadership and (c) relish the opportunity to snub President Trump.  Sens. John McCain, Bob Corker and Jeff Flake all despise Trump, and aren't likely to face voters again.  Senate leaders recently added a new name to the problem list: Sen. Steve Daines of Montana. He hasn't gone public with his concerns, but is withholding his support for the bill because he believes it favors corporations over other types of businesses.

  • Other holdouts who are being lobbied: Susan Collins (Maine) and Ron Johnson (Wis.). Collins has constituents who love it when she bucks the party line.
  • WashPo just posted a good piece on changes being considered to win over holdouts.

Why it matters: Lose any three of those six — and several could move together — and tax cuts are dead.  The bottom line: GOP leaders hoped to lock all of these folks down before Thanksgiving. But that didn't work: Leadership doesn't yet have 50 votes.

  • But, but, but: Even my most pessimistic sources tell me they think the political urgency to get something done will override the concerns of the holdouts.
  • The consensus view is that Collins wants to get to yes, and Daines could help Johnson get on board, since they have similar concerns.

Second Republican Senator Says He's Voting 'No' On Tax Reform -- Just hours after Sen. Rand Paul announced he would vote 'yes' on the Senate's tax-reform plan, handing the White House a win, a second Republican senator has publicly declared his intention to vote against the bill, joining Wisconsin's Ron Johnson in opposition. And that senator is: Montana's Steve Daines.#BreakingNews: Sen. @SteveDaines aides to FBN: "No" on tax bill but optimistic about changes pic.twitter.com/2P07bfGIZo— FOX Business (@FoxBusiness) November 27, 2017According to Politico, Daines and Johnson have similar objections: They both believe the bill is too generous to corporations while not doing enough to help small businesses, many of which would benefit from a more charitable pass-through rate. For "pass-through” entities, taxes are generally filed through the individual income tax code and not the corporate tax code.There are millions of these entities, and they are most often sole proprietorships, limited liability companies or partnerships.Daines reportedly discussed his reservations about the bill with President Trump over the weekend. According to the Washington Post, GOP leaders are working on a change to the bill that would assuage Daines' and Johnson's concerns. However, there's one potential snag: Such changes could also personally benefit Trump, who has stakes in many business partnerships that are taxed at the pass-through rate.Still, even if the White House manages to win back Daines and Johnson, there are at least seven other senators who are either undecided or leaning toward a no. Only three Republican no votes would be needed to sink the bill, assuming no Democrats defect. Unfortunately for GOP leaders, Daines's opposition is just the latest sign that tax reform's chances of passing by year end are virtually nonexistent.

"Make Or Break": Senators Push For Sweeping Changes To Tax Bill As GOP Leaders Struggle To Vote It Out Of Committee -- With roughly 14 sessions of Congress left before the New Year break, the GOP’s chances of passing comprehensive tax reform by the end of the year – as the White House has promised to do - are looking increasingly remote. So far, the biggest obstacle – as with the Republicans disastrous failure to repeal and replace Obamacare – is the Senate, where disparate groups of lawmakers are opposing the bill for different, and sometimes contradictory, reasonsIn what has been called a "make or break" marathon negotiating session, at least two Senators have come out against the bill in its current form, sending the administration scrambling to hammer out a compromise on the pass-through rate that would entice Wisconsin’s Ron Johnson and Montana’s Steve Daines to vote ‘yes’.But according to Bloomberg, the bill could get held up in committee, largely thanks to the opposition of the two senators named above, who are working to block it even as the leadership desperately tries to secure passage by end-of-day. To keep up with Mitch McConnell’s timetable, which would see a floor vote on Thursday, Republicans must successfully shepherd it through the budget committee by early Wednesday at the very latest. As Bloomberg explains, normally the Senate Budget Committee vote on the tax legislation would be a mere formality. However, given Republicans’ razor-thin majority on the committee a single dissenting senator could block the bill. So far, two of the 12 Republicans on the committee have expressed serious reservations about the bill that they say will prevent them from voting on it. Senator Ron Johnson of Wisconsin wants a deeper tax cut for pass-through businesses - and says he won’t vote for the bill as written. Senator Bob Corker of Tennessee wants a provision that would impose tax increases if the bill doesn’t generate enough economic growth to cover the $1.4 trillion in revenue losses it’s estimated to produce over 10 years.“I’m not exactly sure what’s going to happen in committee, we’re working diligently to fix the problem,” Johnson told Wisconsin reporters on Monday, according to his office.“If we develop a fix prior to committee, I’ll probably support it but if we don’t, I’ll vote against it.”

Senators Scramble to Advance Tax Bill That Increasingly Rewards Wealthy - The Republican tax bill hurtling through Congress is increasingly tilting the United States tax code to benefit wealthy Americans, as party leaders race to shore up wavering lawmakers who are requesting more help for high-earning business owners. On Monday, as Republican lawmakers returned to Washington determined to quickly pass their tax overhaul, senators were in feverish talks to resolve concerns that could bedevil the bill’s passage. With pressure increasing on Republicans to produce a legislative victory, lawmakers are contemplating changes that would exacerbate the tax bill’s divide between the rich and the middle class.Those include efforts to further reward certain high-income business owners who are already receiving a tax break in the Senate bill but who are at the center of a concerted push by conservative lawmakers and trade groups to sweeten those benefits. The Congressional Budget Office said this week that the Senate bill, as written, would hurt workers earning less than $30,000 a year in short order, while delivering benefits to the highest earners throughout the next decade. Those estimates echo other analyses, like that by the Joint Committee on Taxation, which have found the biggest benefits of the bill increasingly flowing to the rich over time. By 2027, the budget office said, Americans earning $75,000 a year and below would, as a group, see their taxes increase, because individual tax cuts are set to expire at the end of 2025. At the heart of the debate is whether to more favorably treat small businesses and other so-called pass-through entities — businesses whose profits are distributed to their owners and taxed at rates for individuals. Seventy percent of pass-through income flows to the top 1 percent of American earners, according to research by Owen Zidar, an economist at the University of Chicago’s Booth School of Business. Two Republican senators, Ron Johnson of Wisconsin and Steve Daines of Montana, have said that they will vote against the plan if it does not do more to help the owners of those businesses, possibly by increasing the individual income tax deduction for such owners from the 17.4 percent rate currently in the Senate bill.Republicans, who control the Senate 52 to 48, can afford to lose only two of their members if they hope to pass the bill on party lines in the upper chamber.Mr. Johnson could stall the bill by himself on Tuesday, when it is scheduled for a vote in the Senate Budget Committee. Mr. Johnson sits on that committee, where Republicans have a single-vote majority. On Monday, he said he would vote “no” unless his concerns were addressed.“I need a fix beforehand,” Mr. Johnson said.

Senate committee advances GOP tax bill, moving closer to floor vote - The Senate Budget Committee on Tuesday approved the Republican tax bill, a crucial procedural step toward a vote by the full chamber later this week.With the party-line 12-11 vote to advance the plan, Republicans overcame one possible roadblock in their push to chop tax rates for businesses and individuals by the end of the year.Two GOP members of the panel had separate concerns that threatened to upend the bill's momentum. Sen. Bob Corker, R-Tenn., wants a "trigger" to raise revenues should the bill's economic growth effects not go far enough to make up for the nearly $1.5 trillion in estimated tax cuts over 10 years. The senator had fears about expanding budget deficits and suggested Monday that he could vote "no" to advance the proposal.In a statement Tuesday, Corker said he backed the bill after reaching a tentative deal on a "trigger" to "ensure greater fiscal responsibility should economic growth estimates not be realized." The senator added that the proposal needs to be finalized but said he is "encouraged."  Meanwhile, Sen. Ron Johnson, R-Wis., sought to further reduce the tax burden on pass-through businesses, which pay individual rates. He argued that those businesses got worse treatment under the plan than corporations, which would see their tax rate chopped to 20 percent from 35 percent.Both senators ended up voting to advance the bill. Johnson later said he got assurances that his concerns would be addressed either in the Senate bill or in a joint bill with the House.    Republican Senate leaders want to pass the plan later this week. As it holds 52 seats, the GOP can lose only two votes and still approve the bill under special budget rules, assuming all Democrats and independents oppose it.

A Republican Tax Scam Advances in the Senate -  In a party-line vote on Tuesday afternoon, the Senate Budget Committee sent the Republican tax bill to the floor of the Senate, where it will be put to a vote sometime later this week or early next week. G.O.P. leaders seem confident that the bill will pass, and their confidence may be justified, although the outcome isn’t quite clear yet. If the Republican Party does pull this off, it will be another marker in the erosion of American governance.  The vote in the Budget Committee was taken before some of the legislation’s key details had been finalized, and before the Joint Committee on Taxation, the official keeper of the numbers on budget issues, had time to issue a proper analysis of the bill. (On Tuesday evening, there were reports that the Joint Committee on Taxation would put out a report on Wednesday.) The chairman of the Budget Committee, Senator Mike Enzi, of Wyoming, summoned no experts, commissioned no studies, and held no public hearings to consider the bill. “I thought, Mr. Chairman and colleagues, I had seen just about everything,” a Democratic member of the committee, Senator Ron Wyden, of Oregon, said shortly after the vote was taken. “But this committee has just completed a key discussion on the budget foundations for ten trillion dollars of tax-policy changes in less time than it takes to wash a car.”

Senate GOP gets breathing room as tax plan advances -- Politico -- Senate Republicans got some sorely needed momentum behind their tax overhaul Tuesday as key GOP swing votes inched closer to backing the legislation — after Senate leaders launched a frenzied round of negotiations to convince the holdouts. The Senate Budget Committee voted to advance the GOP tax reform bill on Tuesday on a party-line vote, with both Sens. Bob Corker (R-Tenn.) and Ron Johnson (R-Wis.) backing the measure a day after threatening to withhold their support. That critical vote came after President Donald Trump came to Capitol Hill to rally the troops in the tax battle. Johnson voted for the tax bill after a back-and-forth with Trump during the lunch, according to multiple sources, over the Wisconsin Republican’s main concern: that the current proposal gives more benefits to corporations than to businesses that pay taxes through the individual system. At one point, Johnson — who has persistently pressed his case for so-called pass-throughs to other senators — said jokingly that no one grandstands better than him, according to one senator who attended the lunch. Corker, one of the fiscal hawks concerned about the deficit impact of tax cuts, said he was satisfied with details for a "trigger" to reverse tax cuts if economic growth fell short of projections in years to come. He expects details to be released Thursday. "I've got details but I want to get it all sort of put to bed," before disclosing them, he told reporters. "It's an agreement in principle, a very strong agreement, with [Senate Majority Leader Mitch] McConnell, with [the] Finance Committee, and of course the White House has been in the midst of all this too."

Republican Victory May Rest Once Again With McCain, This Time on Taxes NYT -- Once again, it could all come down to Senator John McCain. After sinking his party’s hopes of repealing the Affordable Care Act this year with a dramatic thumbs-down, the fate of a tax overhaul may now sit in the hands of the Republican from Arizona. In recent days, Mr. McCain has been fairly tight-lipped about his views on the tax proposal speeding through the Senate, saying he sees some problems with the existing bill but is waiting for a final plan before making a decision. Asked about what concerned him about the Senate tax bill this week, Mr. McCain replied tersely: “A lot of things.” Even those who know Mr. McCain best are unsure how he will vote, but if history is any guide, Republicans have reason to worry. Mr. McCain has voted against big tax cuts before, including two that passed under another Republican president: George W. Bush. In that case, he bucked the majority of his party on the grounds that the 2001 and 2003 cuts overwhelmingly benefited the rich — a widespread criticism of the current Senate legislation and the bill that has already passed the House. Mr. McCain is also a deficit hawk and could find it hard to swallow a tax cut that will add around $1.5 trillion to the federal debt over 10 years. With their slim majority in the Senate, Republicans can lose no more than two votes, and several others are on the fence. “I don’t know,” Douglas Holtz-Eakin, policy adviser to Mr. McCain’s 2008 presidential campaign, said when asked how his former boss would vote on the tax overhaul. “For most people there are going to be things in there they don’t like and the question is what is preferable, the status quo or the bill.” 

The Republican Tax Plan -- The Penn Wharton Budget Model has analysis (both static and dynamic) of the impact on the federal budget and the economy of both the original and amended House and Senate versions of the Tax Cut and Jobs Act (TCJA). The Centre on Budget and Policy Priorities looks at the distributional impact, showing that under the amended Senate bill, in 2025 (when most of its provisions would be in place), high-income households would get the largest tax cuts as a share of after-tax income, on average, while households with incomes below $30,000 would on average face a tax increase (Figure 1). By 2027, when many of its provisions would have expired, those at the top would still get large tax cuts, but every income group below $75,000 would face tax increases, on average (Figure 2). Despite raising taxes on millions of middle- and lower-income households, the bill would add $1.5 trillion to deficits over the decade due to its large tax cuts for high-income households and corporations.The Economist compares the current administration’s tax plan with the Reagan administration’s Tax Reform Act of 1986, as Republicans embark on yet another sweeping rewrite of the tax code, which many point to as a model to emulate. However, while the authors of the 1986 Act relied heavily on advice from professional economists, President Trump’s Treasury department is yet to find a credible study supporting its claim that tax cuts will deliver enough economic growth to pay for themselves. Instead of seeking bipartisan support, Republicans are using the restrictive procedure of budget reconciliation to try to push the legislation through on a party-line vote. The substance of the current Republican tax proposal also differs greatly from the 1986 Act. Congressional Republican leaders originally promised that any reform would not reduce the federal government’s overall revenues, but the current plan is expected to raise deficits by as much as $1.5 trn over ten years. And, according to figures from the Joint Committee on Taxation, most of the benefits will go to the rich, unlike Reagan’s reform (Figure 1).

Republicans still don’t have the votes to pass their version of tax reform: With administration and leadership aides frantically negotiating with holdout senators, the Senate’s tax vote scheduled for late this week could lapse into next week. That would raise everyone’s blood pressure: Everything is fragile.

  • A senior administration official told me: “We’re still getting it done in a matter of a couple months, instead of a couple of years. It’s OK if it takes a few extra days.”
  • The bill is in the ugly sausage-making phase, with senators taking advantage of their leverage to make demands. At least six GOP senators are holding out (John McCain and Jeff Flake of Arizona, Bob Corker of Tennessee, Susan Collins of Maine, Ron Johnson of Wisconsin and Steve Daines of Montana).
  • Lose three of those, and the bill is dead.
  • McCain says he’s undecided. His concerns? “A lot of things.”
  • Will be drama to the end: The well-wired Chris Krueger of Cowen has “~8 Republican Senators on fence/lean-no … Any slippage, and momentum goes other direction with Alabama Senate election [Dec. 12], and shutdown negotiations next week.”

Additionally, as Allen states, there are indications that there are more than enough potential “no” votes to defeat the bill in much the same manner that health care reform failed on the Senate floor in July. Wisconsin Senator Ron Johnson, for example, says that he remains opposed to the bill in its present form, and it’s unclear what if any changes could persuade him to change his mind. Johnson’s opposition seems to be based largely on the manner in which the bill would treat so-called “pass-through” businesses such as LLCs and Subchapter S corporations. Montana Senator Steve Daines has also said he’s currently a “no” vote based largely on the same grounds as Johnson, Additionally, Tennessee Senator Bob Corker, who has spent the past year clashing with the President and recently announced that he would not run for re-election is signaling that he too could end up being a “no” vote on the bill. Other potential “no” votes include John McCain, Susan Collins, Lisa Murkowski, Jeff Flake, James Lankford of Oklahoma, Jerry Moran of Kansas, and perhaps as many as a dozen other Republican Senators according to a report yesterday in Politico. While it’s likely that changes will be made to the bill to bring a good deal of these Senators on board, Republicans, this puts the Senate GOP in much the same position it was on health care reform since McConnell can only afford to lose two “yes” votes before the bill dies due to the failure to garner even the fifty votes needed to allow for the Vice-President’s tie-breaking vote.

It Started as a Tax Cut. Now It Could Change American Life. -  The tax plan has been marketed by President Trump and Republican leaders as a straightforward if enormous rebate for the masses, a $1.5 trillion package of cuts to spur hiring and economic growth. But as the bill has been rushed through Congress with scant debate, its far broader ramifications have come into focus, revealing a catchall legislative creation that could reshape major areas of American life, from education to health care.Some of this re-engineering is straight out of the traditional Republican playbook. Corporate taxes, along with those on wealthy Americans, would be slashed on the presumption that when people in penthouses get relief, the benefits flow down to basement tenements.Some measures are barely connected to the realm of taxation, such as the lifting of a 1954 ban on political activism by churches and the conferring of a new legal right for fetuses in the House bill — both on the wish list of the evangelical right.With a potentially far-reaching dimension, elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending on health care, education, public transportation and social services. In their longstanding battle to shrink government, Republicans have found in the tax bill a vehicle to broaden the fight beyond Washington.

Senate Bill Nearly Killed By Deficit Hawks: Will Include $350 Billion In New Tax Hikes  -- Following a report from the Joint Committee on Taxation, which unveiled late on Thursday afternoon that the Senate Tax bill would generate enough economic growth to lower its $1.4 trillion revenue cost by only about $458 billion over a decade - in other words it would still boost the deficit by roughly $1 trillion - in a dramatic showdown on the Senate floor, GOP leaders agreed to effectively increase taxes by $350 billion in response to a procedural ambush by deficit hawks led by Sen. Bob Corker that nearly killed the GOP tax reform bill.According to Bloomberg, Senator David Perdue, a Georgia Republican, said that GOP Senators are "discussing a new compromise for their planned tax overhaul that would increase taxes in future years." Quoted by The Hill, Senate Republican Whip John Cornyn told reporters after a round of intense discussions on the floor, “we have an alternative, frankly, tax increase we don’t want to do to try to address Sen. Corker’s concerns.”  Cornyn said the details of the proposal are being worked out.Corker had insisted on a "trigger" proposal that would have rolled back tax relief in case economic projections fell short of expectations; the flipside is that it would have also made any recession in the near future far worse by staggering tax increases just as the economy slowed down, in the process sending the deficit soaring and accelerating the economic contraction.And in an unexpected, 11th hour reversal, the Senate parliamentarian ruled Tuesday afternoon that the trigger would not pass procedural muster. “It doesn’t look like the trigger’s going to work according to the parliamentarian,” Cornyn said. Cornyn’s remarks came after an hourlong standoff on the Senate floor in which three Republicans - Corker, Ron Johnson and Jeff Flake - held up a procedural vote that would have sent the measure back to the Senate Finance Committee.

What the Experts Are Saying About Outsourcing and the GOP Tax Bill AFL-CIO -- We know the Republican tax plan favors the super-rich and the wealthy corporations over working people. One of the many ways it will hurt working people is by setting up a territorial tax system, under which the active income of U.S. companies earned offshore will no longer be subject to U.S. taxes. This will further entice U.S. multinationals to shift their jobs and profits overseas. But don't take our word for it. Here's what the experts are saying about outsourcing and the Republican tax bill:

  • Jared Bernstein, senior fellow, Center on Budget and Policy Priorities; former chief economist to Vice President Joe Biden: “The Republican tax plan….is likely to lead to more outsourcing of U.S. jobs and a larger trade deficit. The tax plan moves to what’s called a territorial system of international taxation, which means the U.S. tax rate on the overseas earnings of U.S. foreign affiliates would become zero.”
  • Rebecca Kysar, professor of law, Brooklyn Law School: “A pressing goal of tax reform is to reduce the incentives for companies to move their operations overseas. This bill does the opposite.”
  • Edward Kleinbard, former chief of staff, Joint Committee on Taxation; University of Southern California Gould School of Law:“The administration’s tax cut proposal is coupled with a territorial tax system, which permanently exempts foreign income from taxation; this will further tilt the playing field in favor of foreign, rather than U.S., investment.”
  • Kimberly Clausing, professor of economics, Reed College:The House and Senate Republican tax bills create a territorial tax system that “exempts foreign income from U.S. taxation. This tilts the playing field even further toward doing business abroad rather than at home, since there will always be countries with lower rates. A territorial system makes explicit and permanent the preference for foreign income over domestic income. It accelerates the profit shifting behind our corporate tax base erosion problem.”
  • Carl Levin, former senator:“The House and Senate tax bills would be a monumental mistake for the country for many reasons, but one compelling reason is the disastrous way they treat foreign corporate profits and encourage companies to shift their operations and the economic benefits of intellectual property overseas.”

The Four Big Tax Deceptions - The independent evaluations of the Trump tax plan have been rough. They show a plan that deeply cuts taxes on the wealthy, causes the deficit to jump and does little to lift economic growth. Yet the plan’s defenders continue to describe it as a “beautiful” thing (President Trump’s word) that would transform the economy and bestow gifts on ordinary Americans. How do they keep making these claims? I count four major tactics that they’re using:

  • 1. Describe the benefits of a different tax plan — and make it sound as if they’re talking about this one. A group of longtime Republican economists took this approach in a long open letter, published yesterday by The Wall Street Journal. It’s titled “How Tax Reform Will Lift the Economy,” which sure sounds like an article praising the current plan before the Senate. But it actually describes a very different plan, a “revenue-neutral” plan that would offset its corporate tax cuts with fewer corporate loopholes. The Senate bill is radically different from this imaginary plan the economists are praising. Instead of being revenue neutral — technical talk for a bill that neither grows nor shrinks the deficit — the Senate plan would increase the deficit by more than $1 trillion over its first decade.
  • 2. Talk about the plan’s middle-class tax cuts — and ignore the middle-class tax increases.  The plan is a windfall for the wealthy, but it’s quite mixed for the middle class and poor. Some provisions raise taxes on the middle class and poor. Others cut taxes. Long term, most families would probably be worse off, as I’ve explained before. Take Senator Rob Portman, the Ohio Republican, who went on “Meet the Press” this weekend to sell the bill. “The middle class tax cuts are in there,” Portman said. “It doubles the standard deduction up to 24 grand for a family. It doubles the child tax credit. It actually — it lowers the rates.” All that is true. Unfortunately, Senator Portman left out the elimination of the personal exemption, which protects $4,000 per person from income taxes. He left out the elimination of various tax breaks that help the middle class. And he left out the introduction of a new inflation measure that will push more families into higher tax brackets over time.
  • 3. Pretend that the future will never arrive.  To hold down the estimated cost of the bill, Senate leaders have set some of its biggest provisions — the ones that most benefit the middle class — to expire over the next decade. The corporate tax cuts, by contrast, are permanent.
  • 4. Rush, rush, rush.  Perhaps the biggest giveaway about the plan is the way that its supporters are trying to push it through Congress as quickly as possible. They’re not holding hearings where experts can debate the content of the plan. They are not even waiting for a final analysis from Congress’s official tax arbiter, the Joint Committee on Taxation. They understand that facts and debate hurt their cause. They are hoping that partisan loyalty is strong enough to overcome substance.

The Biggest Tax Scam in History, by Paul Krugman, NY Times: ...The bill Republican leaders are trying to ram through this week ... is the biggest tax scam in history. It’s such a big scam that it’s not even clear who’s being scammed — middle-class taxpayers, people who care about budget deficits, or both.One thing is clear, however: One way or another, the bill would hurt most Americans. The only big winners would be the wealthy — especially those who mainly collect income from their assets rather than working for a living...The core of the bill is a huge redistribution of income from lower- and middle-income families to corporations and business owners. ...Meanwhile, the bill would partially repeal Obamacare, in a way that would sharply reduce aid to lower-income families and raise the cost of insurance for many in the middle class.You might wonder how such a thing could possibly pass the Senate. But that’s where the scamming comes in.While the underlying structure of the bill involves raising taxes on the middle class, the bill also includes a number of temporary tax breaks..., in the first few years most middle-class families would see modest tax cuts.But the operative word here is “temporary.” All of these tax breaks either dwindle over time or are scheduled to expire at some point; by 2027 the bill is ... a tax increase on the middle class used to pay for tax cuts that mainly benefit the wealthy. ... So it’s a giant scam. And while the exact nature of the scam may be unclear, ordinary American families would end up being the victims either way. So will they manage to pull off this giant con job? The reason they’re rushing this to the Senate floor without a single hearing, without a full assessment from Congress’s own official scorekeepers, is their hope that they can pass the thing before people figure out what they’re up to. And the question is whether there are enough Republican senators with principles, who believe that policies should not be sold with lies, to stop this bum’s rush.

A modest proposal: time to rethink the impact of US tax reform - Jason Furman & Lawrence Summers --You recently wrote an open letter to Treasury Secretary Mnuchin quantifying the economic impact of tax reform. We are interested in and surprised by your analysis. We share your commitment to the idea that well-designed tax reform can make the economy stronger and that careful economic analysis is essential. And we know that you all share our belief that such careful analysis is well served by discussion and debate of these issues that is at least as frank and vigorous as what we are all accustomed to in the average economics seminar. To that end, we think it would be useful to lay out some of the questions we have about your analysis.First, many members of Congress are citing growth estimates consistent with your letter to claim that the tax cuts would pay for themselves and that the legislation currently being considered by Congress would not add to the deficit or debt over the next decade. Your letter, however, does not say that tax cuts would pay for themselves. Would it be fair to say that you agree with Martin Feldstein (who did not sign the letter) that these tax cuts will not pay for themselves and, in fact, would add more than $1tn to the debt over the next decade?Second, can you explain how the studies you cite justify the conclusions you reach? You cite three studies to justify your conclusion that the annual growth rate would rise by 0.3-0.4 percentage points over the next decade. But two of these studies actually appear to have estimated substantially lower growth rates — potentially as low as a 0.01 percentage point increase in the annual growth rate.You cite a Treasury study of the Bush tax reform commission’s growth and investment tax plan that you asserted found a 4.8 per cent increase in long-run GDP. But the study you refer to provides estimates from three different models ranging from 1.4 per cent to 4.8 per cent increases in national income and does not express any views on which model is preferred. What was your reason for citing only the upper end of the range of Treasury’s estimates, from one model and ignoring its other calculations? Also, why did you not mention that the middle of the range of Treasury’s 10-year estimates was 1 per cent, a figure that would corroborate the views of critics of the tax bills since there would be only a 0.1 percentage point increase in the growth rate? (much more…)

No Trigger: The Umpire Strikes Back - Menzie Chinn --The Senate parliamentarian ruled the trigger to prevent a revenue shortfall as unacceptable, thereby temporarily stymieing the bill.  This is just as well, as the trigger would have been procyclical, raising tax rates if the economy hit a recession. The current working concept — to reduce the tax reduction by $350 billion — makes a lot more sense from a macroeconomic perspective. That’s because we’re already at full employment. Cutting taxes in this situation risks overheating the economy if the Fed does not respond, and worsening trade deficits if the Fed does not.  So, the smaller, the better. Of course, even better would be a revenue neutral, progressive, tax reform, but I don’t see anything like a middle-class friendly package coming from this group.

Republicans rewriting tax bill — with fight pushed into Friday - Senate Republicans are frantically re-writing their massive tax overhaul to win over wavering senators just hours before a potential vote.  GOP leaders had hoped to pass the bill late Thursday night or early Friday morning, but were forced to delay action after a ruling by the Senate parliamentarian threw out a crucial provision to prevent hundreds of billions in deficit spending. But in good news for Senate Majority Leader Mitch McConnell, Sens. Ron Johnson (R-Wis.) and Steve Daines (R-Mont.), two hold-outs, said they would back the bill Friday morning after getting assurances the bill would change to their liking. It’s still not clear when the Senate will vote — or what they’ll actually be voting on, as key pieces of the multi-trillion-dollar bill are being rewritten in hopes of getting a major legislative victory to President Donald Trump’s desk by Christmas. Republicans were sent scrambling after the Senate Parliamentarian told GOP senators Thursday that a key proposal for deficit hawks — a trigger to raise tax rates if sufficient economic growth did not materialize — would not pass procedural muster and would need to find something else to satisfy the bloc of deficit hawk holdouts, led by Sen. Bob Corker (R-Tenn.). “It doesn’t look like the trigger is going to work, according to the parliamentarian,” Senate Majority Whip John Cornyn (R-Texas) said. “So we have an alternative, frankly: a tax increase we don’t want to do to try to address Sen. Corker’s concerns.” Corker told reporters: “My understanding is, that the parliamentarian has ruled against it so they’re just going to automatically put [tax increases] in, period.” Corker and Sen. Jeff Flake (R-Ariz.) said the revenue raised with tax increases — which senators say would kick in six years after the enactment of the tax legislation — would total about $350 billion, although Cornyn suggested that figure may need to go higher.  

Rubio: Offset Tax Cuts By Reducing Social Security, Medicare Benefits - Tax reform is only one piece of the overall puzzle needed to revitalize the American economy, Sen. Marco Rubio (R-Fla.) told a group of Washington, D.C., lobbyists and policy analysts this morning at a Politico Playbook Interview sponsored by the Financial Services Roundtable. The other part? Reduce the deficit and offset the cost of the reform, which the Congressional Budget Office estimates at $1.3 trillion.“I analyze this very differently than most,” Rubio told the crowd. “Many argue that you can’t cut taxes because it will drive up the deficit. But we have to do two things. We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future,” the senator said.  If lawmakers can act strategically sooner rather than later to come up with some combination of reforms to reduce benefits and raise retirement age, the pain of change and reduced benefits will be greatly mitigated, said the lawmaker who ran for president in 2016 and is once again sounding presidential.  “We don’t need to reduce benefits on current retirees or even near-term retirees, but we can make changes for future generations such as mine, and do so in a way that people can prepare for, so the changes will barely be felt,” Rubio said.As much as 23 percent of Social Security benefits and 14 percent of Medicaid benefits could disappear by 2034 unless Congress acts, according to a the most recent report from trustees. Without a political fix, future retirees could experience a 23 percent reduction in benefits or a 20 percent increase in payroll taxes to fund the shortfalls, the trustee analysis found.“Tax reform is the economic component of this equation,” said Rubio, who expressed doubts that there will be a government shutdown. “When more people are working, there are more taxpayers and more revenue, but that alone won’t be enough. You are still going to have a debt problem in the absence of spending cuts.”

The Health Coverage Stakes In The Tax Debate: The Individual Market And Beyond -- It is being reported that Maine senator Susan Collins (R), whose opposition helped doom Affordable Care Act repeal votes over the summer, is considering supporting a Republican tax bill containing a repeal of the ACA’s individual responsibility penalty in return for congressional enactment of two health care bills and other concessions. The two bills are the Alexander-Murray bipartisan health reform bill, which would provide funding to reimburse insurers for reducing cost sharing for low-income enrollees for 2018 and 2019, and another bill that Senator Collins is co-sponsoring with Senator Bill Nelson (D-FL). The Collins-Nelson bill would provide $2.25 million in funding for 2018 and for 2019 for states that obtained 1332 innovation waivers to institute reinsurance programs. The assumption underlying this trade-off is presumably that adoption of Alexander-Murray and Collins-Nelson would offset the damage done to the individual market by repeal of the individual mandate. However, on November 29, 2017, the Congressional Budget Office released a letter to the Senate Health, Education, Labor, and Pension Committee ranking member, Senator Patty Murray (D-WA), confirming that adoption of the Alexander Murray bill would not begin to offset the dramatic increase in the number of uninsured that would be caused by the individual mandate repeal.In its November 8, 2017 report on individual mandate repeal, the CBO estimated that repeal would cause 4 million individuals to lose coverage by 2018 and 13 million by 2025. In its October 25, 2017 analysis of the Alexander-Murray bill, the CBO estimated that it “would not substantially change the number of people with health insurance coverage, on net, compared with [the CBO’s] baseline projection.” The CBO had assumed in its baseline for this analysis that the cost-sharing reductions (CSRs) would be paid, so Alexander-Murray’s funding of the CSRs would not be expected to make a difference (although other provisions of Alexander-Murray, like funding outreach efforts or expanding the availability of lower-actuarial value “copper plans,” might make a small difference). Of course, the CSRs are in fact not being paid, so this assumption is incorrect.

The Senate’s tax bill is a sweeping change to every part of federal health care - Sarah Kliff  --The Senate tax bill is really a health care bill with major implications for more than 100 million Americans who rely on the federal government for their health insurance.The bill reaches into every major American health care program: Medicaid, Medicare, and the Obamacare marketplaces.  These are expected outcomes based on two significant policy changes in the bill. First, the bill repeals the individual mandate, a key piece of Obamacare that requires most Americans get covered. Economists expect its elimination to reduce enrollment in both the Affordable Care Act’s private marketplaces and Medicaid by millions. The money saved will be pumped into tax cuts for the very wealthy. The bill also includes tax cuts so large that they would trigger across-the-board spending cuts — including billions for Medicare. The last time Medicare was hit with cuts like this, patients lost access to critical services like chemotherapy treatment.This tax bill deserves a broader name. Its policies will cause millions of vulnerable Americans to lose coverage, disrupt care for the elderly, and potentially change the health care system in other ways we can’t fully predict.The Senate bill includes a provision to repeal the Affordable Care Act’s requirement that nearly all Americans carry insurance coverage, known as “the individual mandate.”Republicans see it as a winning move. The individual mandate is very unpopular. And repealing it will save more than $300 billion — which can pay for big tax cuts for corporations and the very wealthy. The best economic evidence we have shows that if the individual mandate disappears, premiums go up and millions of Americans lose coverage. The Congressional Budget Office pegs the decline in the number of insured at 13 million. Some Republican senators have protested this number, arguing that the CBO attributes too much impact to the mandate and saying that fewer people would actually lose coverage if it went away.  Some economists I spoke with agreed — they thought the CBO might be on the high end with its estimate. Others thought the number sounded right. But all agreed that the fundamental outcome isn’t up for debate: Millions of Americans would lose coverage. It’s not a question of if; it’s a question of how many millions.

A Republican backup plan for killing Obamacare - A last-ditch effort among Senate Republicans to repeal and replace the Affordable Care Act (ACA), popularly known as Obamacare, dominated nationwide headlines in September, and in October, President Donald Trump issued an executive order that would cut critical subsidies to health insurance companies. Now Senate Republicans are trying to use their proposed tax bill to repeal a key part of the law. But while the nation has been fixated on Congress and the president, Republicans in Kentucky have been quietly pursuing a different strategy to undercut Obamacare. In the state that arguably gained the most from the health law, Republican Gov. Matt Bevin is working with the Trump Administration to gut Obamacare without legal battles or congressional votes. Other states with Republican leadership are closely watching Kentucky, and crafting similar plans. If Kentucky succeeds, other states will likely follow like dominos.  Obamacare’s success in poor, underinsured states like Kentucky centers around an optional component of national healthcare -- statewide expansion of Medicaid. In 2013, Former Democratic Gov. Steve Beshear expanded the popular federal program that provides healthcare to low-income consumers. It guarantees coverage to all Kentuckians with incomes at or below 138 percent of the federal poverty level, or about one in three Kentuckians. For a brief period, Kentucky had arguably the most streamlined health care plan of the ACA, and brought a historically unhealthy group of people into doctor’s offices and county clinics from the western coalfields to the eastern hills.

Senators ready mortgage servicing fix as tax reform nears finish line  -- Lawmakers were attempting to add a fix Friday to tax reform legislation intended to avoid steep tax hikes for mortgage servicers.  A provision in the original Senate tax reform bill would have required companies acquiring mortgage servicing rights to pay taxes upfront for their anticipated servicing income, rather than when they had booked revenues. The measure was said to be intended for other purposes but it would have imposed a costly tax burden on mortgage servicers. As Senate Republicans appeared to have the votes to pass the overall tax reform bill, lawmakers were developing an amendment — sponsored by Sen. Mike Rounds, R-S.D. — to exempt mortgage servicers from the upfront tax hikes. "This amendment will fix the problem," said Anne Canfield, a partner at the consultancy Michael Best Strategies and executive director of the Consumer Mortgage Coalition. Under current law, accrual taxpayers pay taxes on income in the year that it is earned. However, the bill approved by the Senate Finance Committee would have changed the tax treatment of deferred income by requiring mortgage servicers and other companies to pay tax upfront. In the case of mortgages, that would be when the servicing right is created. Without a fix to exempt mortgage servicers, the Senate MSR tax provision would “depress MSR values and would particularly harm smaller independent mortgage bankers,” according to Scott Olson, executive director of the Community Home Lenders Association. Rounds’ amendment is supported by other senators, according to several sources, and the Senate was expected to vote on the measure Friday — with a vote on the overall bill expected later in the evening or over the weekend.

Prepare for Massive Deficits As Far As the Eye Can See --  Menzie Chinn -- Signs are the putative Republican “deficit hawks” are about to sign away whatever integrity they had. What are the implications for the deficit going forward, keeping in mind the fact we are near or at full employment. The projections here do not incorporate dynamic effects. As we now know, mainstream analysis as incorporated in the JCT score, the deficit will still increase relative to baseline. The Tax Policy Center finds even less dynamic feedback effect, and hence larger deficit impacts than the JCT analysis. (Just for completeness, the JCT/CBO static score indicates a deficit over 6% of GDP by FY2027.)  What happens if we hit a recession along the way? Since the baseline forecast assumes the economy at near full employment, the teal line is the cyclically adjusted budget balance as ratio to potential GDP under implementation of TCJA and static score.

U.S. Tax Bill Could Trigger Historic Spending Cuts - Republicans are on the verge of a massive tax overhaul that would hand President Donald Trump his first major legislative victory. But the $1.5 trillion tax package could trigger eye-popping cuts to a slew of federal programs, including Medicare. Unless Congress acts swiftly to stop it, as much as $150 billion per year would be cut from initiatives ranging from farm subsidies to student loans to support services for crime victims. Medicare alone could see cuts of $25 billion a year. And the specter of those cuts has thrust Congress into a high-stakes game of political chicken. With so much attention focused on the tax bill itself, neither lawmakers nor many of the advocacy groups had paid as much attention to the depth and breadth of the cuts that will ensue unless the House and Senate come up with a bipartisan deal to stop them. Some groups had run Medicare ads, but they were largely overshadowed by the tax debate itself. The tax bill hit snags in the Senate late Thursday, as Republicans worked on ways to ease the concerns of deficit hawks. Leaders were still scrambling for votes. But within the GOP, leaders are confident that once the tax bill is passed, they can strike a quick deal to waive the federally mandated cuts. But Democrats deeply opposed to the tax bill aren’t making any promises they’ll agree to bail out their rivals — raising the risk of a historic gutting of government programs. 

Senate Republicans trim tax bill to secure needed votes (Reuters) - Senate Republicans rallied around a U.S. tax overhaul bill on Friday, with Maine moderate Susan Collins announcing her support for it after obtaining agreements for several changes, giving the sweeping legislation sufficient votes to win passage. In a legislative push moving so fast that a final draft of the bill was still unavailable late in the afternoon, Republican leaders were planning for an evening vote. Approval would launch talks, likely next week, between the Senate and the House of Representatives on crafting a single bill. That would then go to the White House, where President Donald Trump was expected to sign it into law before the end of the year. The House, which has already approved its own bill, was expected largely to defer to the Senate measure. In Senate speeches, Democrats hammered the bill as a giveaway to corporations and the rich that will balloon the federal deficit, but the Democrats lacked the votes to block it. Six Republican senators whose commitments had been in doubt announced on Friday they would back the bill: Collins, Steve Daines, Ron Johnson, Jeff Flake, James Lankford and Jerry Moran. Republicans hold a 52-48 majority in the Senate. Senator Bob Corker, a leading fiscal hawk who pledged early to oppose any bill that expanded the federal deficit, stood out as the lone remaining Republican dissenter. As drafted, the bill was projected to add $1 trillion in 10 years to the $20 trillion national debt, even after counting its boost to the economy. “I am not able to cast aside my fiscal concerns and vote for legislation that ... could deepen the debt burden on future generations,” said Corker, who is not running for re-election. 

GOP Releases All 479 Pages Of The Tax Reform Bill - "Vote-A-Rama" Begins --  The Senate tax bill is headed for a potentially unlimited series of decisions on possible amendments - known as “vote-a-rama” - as the full text of the revised bill has just been released.As Bloomberg reports, it’s unclear how long that process might take, though we do note that unlike Obamacare, Senators will at least get to see what's in the bill before they vote on it.Democrats could spend hours offering numerous amendments meant to highlight any flaws they believe the bill contains.  Full Text:  (embedded scribd)

Sen. Cruz Announces Support for Senate Tax Bill - U.S. Sen. Ted Cruz (R-Texas) on Friday evening announced his intention to vote in favor of the Senate’s tax reform bill, the Tax Cuts and Jobs Act. Sen. Cruz also filed an amendment to the bill under consideration that would expand school choice by expanding the definition of the popular 529 College Savings Plans. “The Senate’s tax reform bill takes a significant step toward fulfilling our promise to provide tax relief for American families across our country,” said Sen. Cruz. “This bill significantly lowers our corporate tax rate – currently the highest in the developed world – which will bring needed jobs back to America and up to $2.9 trillion in capital back to our economy. Most importantly, this legislation brings relief to working families, doubling the child tax credit and providing rate cuts for individual taxpayers in all brackets.  “The bill also moves the ball forward on several key priorities I have pushed for throughout this legislative effort. While there are other provisions for which I advocated that I would have liked to see included – specifically more rate cuts and consolidation of the brackets on the individual side, a complete end to the death tax, and full repeal of the AMT – the result of what passed the Senate today will improve outcomes for American people and American job creators.” Additionally on Friday, Sen. Cruz filed an amendment to the bill that seeks to expand school choice by expanding  popular 529 College Savings Plans to include K-12 elementary and secondary school tuition for public, private, and religious schools, and also to include K-12 educational expenses for homeschool students. Adding homeschoolers and expanding 529’s would help ensure that each child receives an education that meets their individual needs, instead of being forced into a one-size-fits-all approach to education. Currently, more than 75% of 529 savings plans are from families making $150,000 or less, and this expansion of the 529 program to help K-12 expenses will further help hardworking Americans and their families save and prepare for their children’s future educational expenses.

In Major Victory For Trump, Senate Passes Tax-Cut Bill Which Nobody Read: Here's What's In It -- Shortly before 2am on Saturday, the Senate passed "the most sweeping rewrite of the U.S. tax code in three decades, slashing the corporate tax rate and providing temporary tax-rate cuts for most Americans" handing Republicans a badly needed legislative and political victory. Senators voted across party lines in a 51-49 vote, ending days of debate and "hand wringing" as leadership worked frantically behind the scenes to win over holdouts and get the proposal in line with the chamber’s rules.Tennessee Senator Bob Corker, who had cited concerns over the bill’s effects on federal deficits, was the only Republican dissenter. Corker, who is retiring after 2018, said in a statement ahead of the vote that he "wanted to get to yes" on the tax plan. "But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” he said. Corker's dissent however was not enough to halt passage, and shortly thereafter Vice President Mike Pence presided over the final passage vote. GOP senators, who stayed on the Senate floor until the vote closed after midnight, broke out into applause after Pence announced the bill had passed. The bill would lower tax rates for individuals through 2025 and permanently cut the corporate tax rate from 35% to 20% (more details below). The bill’s tax cuts for individuals are temporary in order to comply with budget rules that the measure can’t add to the deficit after 10 years. The bill would also repeal ObamaCare’s individual mandate, a priority for President Trump and many Republicans. While we have yet to get confirmation, below is a list of last minute changes and revisions that made it into the final bill per Reuters:

  • Senators Ron Johnson and Steve Daines announced their support for the tax bill after securing agreement on a bigger tax break for the owners of pass-through enterprises, including small businesses, S-corporations, partnerships and sole-proprietorships. An original 17.4 percent deduction would rise to 23 percent.
  • Senator Jeff Flake, who was a holdout over deficit concerns, agreed to vote "yes" after Republican leaders agreed to change a provision allowing the full expensing of business capital investments to sunset after five years. Flake worried that Congress would be unable to eliminate the benefit cold turkey, allowing it to bleed red ink for years to come. But the Arizona Republican says the change would instead phase out full expensing over three years beginning in year six.
  • Senator Susan Collins said she persuaded Republican leaders to retain catch-up contributions to retirement accounts for church, charity, school and public employees.
  • Collins also said she was able to include language to reduce the threshold for deducting unreimbursed medical expenses for two years to 7.5 percent of household income from 10 percent.
  • Collins has proposed an amendment that would retain a federal deduction for up to $10,000 in state and local property taxes.
  • Rescinding a proposed repeal of the AMT and instead increase exemption levels and phase-out thresholds is also on the table.
  • So is rescinding a proposed repeal of the corporate AMT.
  • Another change could be to increase tax rates on U.S. corporate profits held overseas to 14 percent for liquid assets and 7 percent for illiquid holdings, up from 10 percent and 5 percent, respectively

Senate passes sweeping GOP tax plan in early hours of Saturday morning - The Senate passed its tax reform bill in the early hour of Saturday morning, following a day full of Republican leaders making changes to bring enough members on board and a long night full of heated rhetoric on both sides of the aisle. The vote was 51-49, mostly along party lines. Sen. Bob Corker of Tennessee was the only Republican to vote against the bill, citing concerns about growing the deficit.Congressional negotiators continued to make changes to the bill -- including handwriting alterations on to the document -- up until just hours before the final vote, with Democrats sharply criticizing Republicans for not giving members enough time to read the sweeping legislation that would overhaul the US tax system. The House of Representatives approved its own tax reform plan last month, and the two chambers are expected to go to conference to reconcile the two bills, but passing the legislation Saturday was a huge victory for Senate Republicans and President Donald Trump, both looking for significant legislative achievements. Arizona Sen. Jeff Flake, a key holdout, announced just after noon that he would back the plan. Republicans could pass the legislation with 50 members and a tie-breaking vote from Vice President Mike Pence, but after Sen. Susan Collins of Maine announced her support Friday afternoon, Pence's would-be vote was unnecessary, as Collins' vote brought the tally to 51. Sen. Bob Corker of Tennessee is the only expected Republican to vote no.  "We have the votes," Senate Majority Leader Mitch McConnell said walking to the Senate floor following a conference meeting Friday. In a public statement announcing his support, Flake said he was given promises from Senate GOP leadership and the Trump administration for a "growth-oriented legislative solution" to protect recipients of the Deferred Action for Childhood Arrivals program. But behind the scenes, Republican members and aides were fuming at Corker, who was demanding last-minute offsets for the GOP tax bill out of fear that it would raise the deficit.Corker's demands weren't entirely new, but were crystallized further Thursday afternoon when the Joint Committee on Taxation, the independent tax scorekeeper, announced that even with projected economic growth, the Republican tax bill still would add more than $1 trillion to the deficit over 10 years. Then, Corker learned that a trigger he demanded in the tax bill that would automatically increase taxes if the tax legislation didn't generate the growth that Republicans anticipated, wouldn't pass Senate rules and couldn't be included.

Tax bill: Trump victory as Senate backs tax overhaul - BBC News: US senators have passed a sweeping tax cuts bill, paving the way for Donald Trump's first big legislative victory. The package would mark the biggest tax overhaul since the 1980s. It was passed by 51 votes to 49, after a series of amendments in a marathon session. Democrats complained it only benefited the wealthy and big business. The plan sees a sharp cut in corporation tax, but a Senate committee finding has warned it would add $1tn (£742bn) to the budget deficit. President Trump wants the measures enacted by the end of the year and he congratulated Republicans for taking the US "one step closer to delivering massive tax cuts for working families". The Senate will now have to merge its legislation with that passed last month by the House of Representatives, before it can be signed into law by the president.The move will be seen as a major victory for Mr Trump, who since taking office has struggled to get major legislative movement in Congress - including fulfilling his vow to repeal and replace Obamacare. His presidency has also been dogged by an independent investigation into Russian attempts to influence the 2016 US election and possible collusion with his campaign team. On Friday, ex-national security adviser Michael Flynn became the Trump administration's most senior member to be charged in the investigation. The US Senate, a seemingly insurmountable roadblock for the Republican agenda for much of this year, has at last given its assent to a major piece of legislation.  Perhaps unsurprisingly it was sweeping tax cuts - always beloved by conservatives - that finally brought the party together and gave President Donald Trump the opportunity to claim a landmark legislative achievement.

GOP Tax Bill is Even Worse Than We Think - naked capitalism - Yves here. This nightmare of a tax bill just passed the Senate, and we’ll learn more about what was actually in it in the coming days since a lot of pork to buy particular votes was thrown in at the last minute. This Real News Network segment gives an overview. (video and transcript)

A Capitol Hill Scorekeeper Eviscerates the G.O.P.’s Tax Math - For weeks now, White House officials, Treasury Department officials, and G.O.P. leaders on Capitol Hill have been blithely asserting that their big tax plan—which features huge giveaways for corporations and wealthy investors in private partnerships—would pay for itself.   Yet there was never much credible evidence to support these claims. The Republicans’ own budget, which the House of Representatives passed in October, assumed that the G.O.P. tax proposals would cost about $1.5 trillion over ten years, and a number of unofficial but independent analyses of the plan concluded that its price tag was in that range.  But as the G.O.P.’s dual tax bills made their way through the House and Senate, their authors dismissed these analyses, saying that they were hopelessly static and didn’t take account of dynamics—i.e., all the supercharged economic growth that the tax cuts would generate. It just so happens, however, that over the past decade, the official Capitol Hill scorekeeper on tax proposals, the Joint Committee on Taxation, has invested a lot of time and money developing an explicitly dynamic scoring model that does take into account the feedback between taxation and economic growth. In the Joint Committee’s “Dynamic Stochastic General Equilibrium” model, lower taxes prompt people to work longer hours and businesses to invest more, just as Republicans claim. After incorporating these types of effects, the model spits out multi-year predictions for G.D.P., tax revenues, and other variables. On Thursday afternoon, just hours before McConnell was due to ask the full Senate to vote on a final version of the Republican bill, the Joint Committee issued its official analysis of the plan. The analysis—based on a preliminary version of the bill—incorporated the results from three different models: the committee’s traditional macroeconomic model; its newer dynamic one; and a third model, also dynamic, which it leased from a private consulting firm. After averaging the results from all of these models, the Joint Committee estimated that, over the next ten years, the bill would boost the level of G.D.P. by about 0.9 per cent, expand the capital stock by 1.1 per cent, and increase the budget deficit by about a trillion dollars ($1,006,700,000,000.00, to be precise).

Senate GOP repeals ObamaCare mandate | TheHill: Senate Republicans have approved the repeal of ObamaCare’s individual mandate as part of their tax-cut bill, a major step toward ending an unpopular part of the health-care law. “Families ought to be able to make decisions about what they want to buy and what works for them — not the government,” Sen. John Barrasso (R-Wyo.) said, hailing the accomplishment. “I believe if people don’t want to buy the ObamaCare insurance, they shouldn’t have to pay a tax penalty to the IRS.”The Senate tax bill must still be reconciled with House legislation that does not include the mandate’s repeal. But that is unlikely to be a major issue, given support in the GOP conference for repealing the mandate. No Democrats in either chamber voted for the GOP tax bills. It’s unclear what repeal of the mandate will mean for ObamaCare. Many experts and health-care groups warn that repeal will destabilize ObamaCare markets, leading to premium increases or insurers simply dropping out of certain areas. Without a financial penalty under the mandate for lacking health coverage, there is less incentive for healthy people to sign up and balance out the costs of the sick. Some experts counter that the effects will not be as severe as others say, given that there are doubts the mandate had a strong effect on people to begin with. 

GOP’s List of Economists Backing Tax Cut Includes Ghosts, Office Assistants, Ex-Felons, and a Sprinkling of Real Economists - Touting support for their tax cut legislation, House Speaker Paul Ryan, R-Wis., the Senate Finance Committee, and Sen. Rob Portman, R-Ohio, released a letter this week signed by 137 economists who say they strongly endorse the Republican legislation before Congress. President Donald Trump on Friday afternoon tweeted a short video featuring the list of 137 economists.  But a review of the economists listed on the letter reveals a number of discrepancies, including economists that are supposedly still academics but are actually retired, and others who have never been employed as economists. One might not even exist. One of the signatories, Gil Sylvia of the University of Georgia, does not have a biography page or any online trace of employment at the university. A university representative told The Intercept that no one with the name Gil Sylvia is employed there.  The RATE Coalition did not respond to The Intercept’s request for comment. Another signatory to the RATE letter, Seth Bied, is not an economist. He is a low-level office assistant at the New York State Tax Department, whose spokesperson said Bied does not remember signing the economists’ letter. Other names on the economists’ letter may raise eyebrows. John P. Eleazarian is listed as an economist with the American Economic Association. But membership to the AEA is open to anybody who coughs up dues, and membership simply grants access to AEA journals and discounts at AEA events. Eleazarian is a former attorney who lost his law license and the ability to practice law in California after he was convicted and sentenced to six months in prison for forging a judicial signature and falsifying other documents. His current LinkedIn profile lists him as a paralegal at a law firm.

Sen. Rubio tells a secret: After giving a tax cut to the rich, GOP will cut Social Security and Medicare - Advocates for seniors and the middle class have been warning for weeks that the Republican drive to cut taxes for the wealthy is the prelude to a larger attack on Social Security and Medicare.  In a videotaped interview with two Politico reporters Wednesday, Sen. Marco Rubio (R-Fla.) said the quiet parts out loud. Asked by interviewers Anna Palmer and Jake Sherman how to address the federal deficit, he replied: “We have to do two things. We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future.” (A video of Rubio’s appearance is here, with his remarks on Social Security and Medicare beginning at the 21:45 mark.)The only thing that’s new here is the explicit admission by a Republican officeholder that this is the GOP’s master plan to eviscerate the welfare and retirement of American workers. Budget analysts have seen it coming with all the subtlety of a freight train. As we reported earlier this month, the damage begins with the so-called Paygo law (for “pay as you go”), which requires Congress to offset any increase in the federal deficit with spending cuts. The law limits Medicare cuts to 4% of its budget per year, or $25 billion of its $625-billion budget. Because the tax cut proposals the Senate was preparing to vote on late Friday would expand the deficit by about $1.5 trillion over 10 years, it’s likely to trigger the cuts. “The driver of our debt is the structure of Social Security and Medicare for future beneficiaries.” — Sen. Marco Rubio (R-Fla.) conveniently forgets that GOP tax cuts will create $1.5 trillion in new debt.

 Extreme digital vetting of visitors to the US moves forward under a new name - The Department of Immigration & Customs Enforcement is taking new steps in its plans for monitoring the social media accounts of applicants and holders of US visas. At a tech industry conference last Thursday in Arlington, Virginia, ICE officials explained to software providers what they are seeking: algorithms that would assess potential threats posed by visa holders in the United States and conduct ongoing social media surveillance of those deemed high risk. The comments provide the first clear blueprint for ICE’s proposed augmentation of its visa-vetting program. The initial announcement of the plans this summer, viewed as part of President Donald Trump’s calls for the “extreme vetting” of visitors from Muslim countries, stoked a public outcry from immigrants and civil liberties advocates. They argued that such a plan would discriminate against Muslim visitors and potentially place a huge number of individuals under watch.ICE officials subsequently changed the program’s name to “Visa Lifecycle Vetting.” But, according to the ICE presentation, the goal of the initiative—enhanced monitoring of visa holders using social media—remains the same.Speaking to a room of information-technology contractors, hosted by the Government  Technology & Services Coalition, Louis Rodi, deputy assistant director of ICE Homeland Security Investigations’ National Security Program, said the agency needs a tool equipped with “risk-based matrices” to predict dangers posed by visa holders, with the social media of those considered a threat under continuous surveillance throughout their stay in the US.

Clock ticking down on NSA surveillance powers | TheHill: Congress will return from its weeklong Thanksgiving break facing a rapidly-shrinking timeline to reform and renew an authority the intelligence community says is critical to identifying and disrupting terrorist plots. The key piece of the Foreign Intelligence Surveillance Act, known as Section 702 and passed in 2008, is set to expire at the end of the year. It allows the National Security Agency (NSA) to collect the texts and emails of foreigners abroad without an individualized warrant — even when the subjects communicate with Americans in the U.S. Throughout the fall, privacy advocates on Capitol Hill pushed for changes to the law to curtail what critics say is a violation of Americans’ Fourth Amendment protections — a push that seemed to gain some momentum despite the objections of the Trump administration. House Judiciary Chairman Bob Goodlatte (R-Va.) has long said that a clean reauthorization of Section 702 would not pass the House, where the powerful Freedom Caucus has banded together with privacy-minded Democrats to advocate for tighter restrictions on how government investigators can use data gathered under the program. But with just a few weeks left until the Dec. 31 deadline, even those tracking the debate closely aren’t sure what reforms, if any, will see the floor in either chamber.

Congress poised to jam through reauthorization of mass surveillance | TheHill: Congress doesn’t have much time left on the legislative calendar for the year, but there’s still a lot on the agenda to get across the finish line. In the few remaining days, Republicans hope to pass a tax reform bill and either another short-term continuing resolution or an omnibus to fund the government. Another item on the agenda is the reauthorization of Title VII of the Foreign Intelligence Surveillance Act (FISA), including the controversial Section 702. The current authorization for Section 702 expires on December 31, and it’s the first time Congress has faced this reauthorization since Edward Snowden’s earth-shattering disclosures about the National Security Agency’s mass surveillance apparatus. Committees in the Senate and House have competing proposals to reauthorize the program. But with the clock running out, Congress once again appears to be poised to jam through reauthorization.Passed in 1978, FISA allows federal intelligence agencies to collect the electronic communications of foreign persons to surveil for certain illicit activities, including terrorism. But not all of the electronic communications collected by the National Security Agency (NSA) are those of foreign persons. According to a 2014 Washington Post report, 90 percent of account holders whose communications were collected were not the intended targets. “Many of them were Americans,” the Post explained. “Nearly half of the surveillance files, a strikingly high proportion, contained names, e-mail addresses or other details that the NSA marked as belonging to U.S. citizens or residents.” Civil libertarians have urged Congress to take this reauthorization as an opportunity to implement meaningful reforms to shield innocent Americans from mass surveillance while ensuring that federal intelligence agencies have the tools they need to protect the United States from foreign threats. Some in Congress, however, seem committed to running roughshod over the Fourth Amendment. 

Reddit, Twitter, and 200 others say ending net neutrality could ruin Cyber Monday - More than 200 businesses and trade organizations have signed a letter to the FCC asking that the agency reconsider its plan to end net neutrality. The letter is signed by an array of big and recognizable tech and web companies: that includes Airbnb, Automattic (which owns WordPress), Etsy, Foursquare, GitHub, Pinterest, Reddit, Shutterstock, Sonos, Square, Squarespace, Tumblr (certainly to the displeasure of its owner, Verizon), Twitter, and Vimeo, among quite a few others. The letter is being released on Cyber Monday and speaks directly to the internet’s constantly growing role in the US economy. “The internet is increasingly where commerce happens,” the letter says. It cites figures saying that $3.5 billion in online sales happed last year on Cyber Monday and $3 billion on Black Friday. Throughout all of last year, online purchases accounted for $400 billion in sales. “This economic growth is possible because of the free and open internet,” the letter says. Our current net neutrality rules allow all businesses to compete equally, the companies write. But without those rules, online businesses may be stymied by internet providers that prioritize their own interests. “An internet without net neutrality protections would be the opposite of the open market, with a few powerful cable and phone companies picking winners and losers instead of consumers.” The lack of rules, they say, could force businesses into internet slow lanes. Or they could be blocked altogether, or forced to pay a toll. “This would put small and medium-sized businesses at a disadvantage and prevent innovative new ones from even getting off the ground,” the letter says.

FCC will also order states to scrap plans for their own net neutrality laws - In addition to ditching its own net neutrality rules, the Federal Communications Commission also plans to tell state and local governments that they cannot impose local laws regulating broadband service. This detail was revealed by senior FCC officials in a phone briefing with reporters today, and it is a victory for broadband providers that asked for widespread preemption of state laws. FCC Chairman Ajit Pai's proposed order finds that state and local laws must be preempted if they conflict with the US government's policy of deregulating broadband Internet service, FCC officials said. The FCC will vote on the order at its December 14 meeting. It isn't clear yet exactly how extensive the preemption will be. Preemption would clearly prevent states from imposing net neutrality laws similar to the ones being repealed by the FCC, but it could also prevent state laws related to the privacy of Internet users or other consumer protections. Pai's staff said that states and other localities do not have jurisdiction over broadband because it is an interstate service and that it would subvert federal policy for states and localities to impose their own rules.FCC officials did not take questions from Ars during today's phone briefing, but we have followed up with Chairman Pai's office to get more details on the scope of the proposed preemption. We will update this story if we get a response. Pai's draft order will be released publicly tomorrow and may provide more detail.  The arguments made by Pai's staff echoed those made previously by Internet service providers. Comcast, Verizon, and mobile industry lobby group CTIA had all urged the FCC to preempt state laws in the weeks leading up to today's announcement by Pai. CTIA argued last week that broadband Internet access shouldn't be regulated by states because it is an interstate service "within the sole jurisdiction of the FCC, and Congress has advanced a national policy of non-regulation for information services." That's the exact position the FCC chairman's office is now taking.

There’s a big math problem with the FCC chairman’s main argument for repealing net neutrality -- Ajit Pai says the Federal Communications Commission needs to ditch its net-neutrality rules because they're hindering investment. The rules the agency put in place in 2015 bar broadband providers from blocking, throttling, or offering preferential treatment to particular sites or services. Hampered by those rules, broadband companies are cutting back on investing in things like expanding their services to new customers or upgrading their networks, Pai, the FCC chairman, argues. If that's really what's been happening, that would be terrible, especially in a country that's ever more dependent on the internet and where the digital divide remains pronounced. But there's no evidence to prove Pai's assertion. In fact, the data Pai points to doesn't show anything close to a marked decrease in broadband investment. Instead, it shows that while broadband investment has risen and fallen a little bit over the years, it's been mostly flat since 2013.  Additionally, a study in May by the consumer advocacy group Free Press, which opposes repealing the rules, found that broadband investment had increased since 2015.   The debate over broadband investment is coming to a head as the vote on whether to repeal the rules nears. With Pai and his Republican allies outnumbering Democrats on the commission three to two, his proposal is expected to sail through on December 14.

Net Neutrality Hits a Nerve, Eliciting Intense Reactions — It usually doesn’t take much to get people on the internet worked up. To get them really worked up, make the topic internet regulation. In the week since the Federal Communications Commission released a plan to scrap existing rules for internet delivery, more than 200,000 phone calls, organized through online campaigns, have been placed to Congress in protest. An additional 500,000 comments have been left on the agency’s website. On social media sites like Twitter and Reddit, the issue has been a leading topic of discussion. In some cases, views on the sweeping change, which would repeal landmark regulations meant to ensure an open internet, have turned into personal attacks. The agency’s chairman, Ajit Pai, said threatening calls and emails had poured into his home and his wife’s work. An image of a protest poster with his children’s names was posted online and spread widely. Ethnic slurs aimed at Mr. Pai, whose parents immigrated from India, littered his Twitter feed. There are also echoes of the 2016 presidential election, with accusations that not all of the reaction is coming from Americans. The federal agency is for the first time dealing with a powerful technology foe as automated software, known as bots, appears to have sent many comments to the site, according to data researchers. And at least 400,000 comments about the issue since April on the F.C.C. site appear to have originated from an apartment in St. Petersburg, Russia, the agency said. It is unclear whether the emails did originate from there, or were made to look as if they did. But none of that has overshadowed the heated reaction to the agency’s proposal. “There doesn’t seem to be middle ground on this issue,” said John Beahn, a lawyer at Skadden Arps who specializes in regulation. At the center of the debate is whether telecom companies like AT&T and Verizon should be able to charge internet sites for delivering their data to consumers’ homes. In 2015, the F.C.C. voted to prohibit those charges, in a policy often called net neutrality.

Ajit Pai blames Cher and Hulk actor for ginning up net neutrality support - Internet users have made it clear to US telecom regulator Ajit Pai that his proposal to scrap net neutrality rules is unpopular with the masses. But with two weeks left before the Federal Communications Commission votes to eliminate net neutrality rules, Pai today blamed actress/singer Cher and other celebrities for boosting opposition to his plan. In a speech hosted by conservative group R Street and the Lincoln Network, Pai also addressed criticism from MCU actor Mark Ruffalo, actress Alyssa Milano, former Star Trek actor George Takei, and Silicon Valley actor Kumail Nanjiani. Pai also claimed that Twitter and other Web companies pose a greater threat to Internet freedom than Internet service providers like Comcast.Pai said: Another concern I've heard is that the plan will harm rural and low-income Americans. Cher, for example, has tweeted that the Internet "Will Include LESS AMERICANS NOT MORE" if my proposal is adopted. But the opposite is true. The digital divide is all too real. Too many rural and low-income Americans are still unable to get high-speed Internet access. But heavy-handed Title II regulations just make the problem worse! They reduce investment in broadband networks, especially in rural and low-income areas. By turning back time, so to speak, and returning Internet regulation to the pre-2015 era, we will expand broadband networks and bring high-speed Internet access to more Americans, not fewer.As in the above quote, Pai continues to claim that net neutrality rules decrease network investment despite the fact that ISPs themselves have told investors that the rules do not harm their network investments. Meanwhile, Pai's FCC is scaling back the federal Lifeline program that helps poor people purchase broadband.

 The FCC's Attack On Net Neutrality Is Based Entirely On Debunked Lobbyist Garbage Data - For several years now one of the broadband industry's biggest criticisms of net neutrality is that it "utterly devastated" investment into broadband networks. But for just as long, we've noted how every time a journalist or analyst actually dissects that claim, they find it's completely unsupportable. What objective analysts do tend to find is that the telecom sector hires an army of economists, consultants, fauxcademics and lobbyists more than happy to manipulate, distort and twist the data until it supports whatever conclusion they're paid to parrot. That net neutrality didn't harm sector investment isn't really debatable. Just ask industry executives from Frontier, Comcast, Cablevision, Sprint, AT&T, Sonic and even neutrality public enemy number one, Verizon all of who are on public record telling investors the "net neutrality killed sector investment" claim simply isn't true. That this concept is a canard is also supported by public SEC filings and earnings reports, as well as the billions being spent on spectrum as these companies rush toward the fifth generation (5G) wireless networks of tomorrow. Most of the sector's dollar-per-holler economists just cherry picked specific windows of time to track CAPEX increases and declines, intentionally ignoring that many of these changes have nothing to do with net neutrality (for example, Charter's CAPEX dipped when it completed its deployment of digital cable converters) as well as numerous large scale fiber deployments (in areas with competition, at least). But no matter how many times this claim is debunked, it has remained the centerpiece of Ajit Pai's facts-optional assault on net neutrality protections. That said, the claim that net neutrality harmed investment has, of course, once again popped up again this week as the agency tries to defend its extremely unpopular plan to gut the rules. In fact, it was part of a rather fact-optional fact sheet (pdf) provided by the FCC as it tried to convince consumers that giving a giant middle finger to consumers was a really nifty idea. Unfortunately for the FCC, reporters capable of basic fact checking are, again, pointing out that this claim is entirely untrue:

The Internet Is Dying. Repealing Net Neutrality Hastens That Death. - The internet is dying. Sure, technically, the internet still works. Pull up Facebook on your phone and you will still see your second cousin’s baby pictures. But that isn’t really the internet. It’s not the open, anyone-can-build-it network of the 1990s and early 2000s, the product of technologies created over decades through government funding and academic research, the network that helped undo Microsoft’s stranglehold on the tech business and gave us upstarts like Amazon, Google, Facebook and Netflix. Nope, that freewheeling internet has been dying a slow death — and a vote next month by the Federal Communications Commission to undo net neutrality would be the final pillow in its face.Net neutrality is intended to prevent companies that provide internet service from offering preferential treatment to certain content over their lines. The rules prevent, for instance, AT&T from charging a fee to companies that want to stream high-definition videos to people. Because net neutrality shelters start-ups — which can’t easily pay for fast-line access — from internet giants that can pay, the rules are just about the last bulwark against the complete corporate takeover of much of online life. When the rules go, the internet will still work, but it will look like and feel like something else altogether — a network in which business development deals, rather than innovation, determine what you experience, a network that feels much more like cable TV than the technological Wild West that gave you Napster and Netflix.

What Actually Happens the Day Net Neutrality Is Repealed --- On December 14th, the Federal Communications Commission (FCC) will vote to replace current rules enforcing net neutrality. Nothing short of an extinction-level event will prevent it. But before abandoning all hope, know that while the battle for net neutrality at the FCC may have been lost, the war isn’t even close to a conclusion. In reality, the net neutrality fight is merely migrating to a different theater, namely, the US Courts of Appeals. And excluding the possibility of a Supreme Court challenge, the outcome may very well drag on for another year and a half or more. In roughly two weeks, the FCC’s three Republican commissioners, led by its chairman, Ajit Pai, will vote to adopt what’s known as the Restoring Internet Freedom Order. As the minority, the two Democrats who serve on the commission, both of which favor net neutrality, will be powerless to stop them. This order will replace and reverse the Open Internet Order, which was passed in 2015 and reclassified broadband internet service under Title II of the Communications Act—the legal foundation upon which the former administration established the “open internet” regulations imposed on internet service providers (ISPs).  Without net neutrality, ISPs like Comcast, AT&T, and Verizon will legally be able to conduct their businesses very differently than they do now. For example, they could give preferential treatment to services they directly profit from and block those they don’t, all the while charging internet companies like Netflix additional fees for speedier access to consumers—costs that you can count on being reflected in your monthly billing statement.

Why the Courts Will Have to Save Net Neutrality - On Tuesday, the F.C.C. chairman, Ajit Pai, announced plans to eliminate even the most basic net neutrality protections — including the ban on blocking — replacing them with a “transparency” regime enforced by the Federal Trade Commission. “Transparency,” of course, is a euphemism for “doing nothing.” Companies like Madison River, it seems, will soon be able to block internet calls so long as they disclose the blocking (presumably in fine print). Indeed, a broadband carrier like AT&T, if it wanted, might even practice internet censorship akin to that of the Chinese state, blocking its critics and promoting its own agenda. Allowing such censorship is anathema to the internet’s (and America’s) founding spirit. And by going this far, the F.C.C. may also have overplayed its legal hand. So drastic is the reversal of policy (if, as expected, the commission approves Mr. Pai’s proposal next month), and so weak is the evidence to support the change, that it seems destined to be struck down in court. The problem for Mr. Pai is that government agencies are not free to abruptly reverse longstanding rules on which many have relied without a good reason, such as a change in factual circumstances. A mere change in F.C.C. ideology isn’t enough. As the Supreme Court has said, a federal agency must “examine the relevant data and articulate a satisfactory explanation for its action.” Given that net neutrality rules have been a huge success by most measures, the justification for killing them would have to be very strong. It isn’t. In fact, it’s very weak.   Because he is killing net neutrality outright, not merely weakening it, he will have to explain to a court not just the shift from 2015 but also his reasoning for destroying the basic bans on blocking and throttling, which have been in effect since 2005 and have been relied on extensively by the entire internet ecosystem. This will be a difficult task.  There is a long history of anticompetitive throttling and blocking — often concealed — that the F.C.C. has had to stop to preserve the health of the internet economy. Examples include AT&T’s efforts to keep Skype off iPhones and the blocking of Google Wallet by Verizon. Services like Skype and Netflix would have met an early death without basic net neutrality protections. Mr. Pai needs to explain why we no longer have to worry about this sort of threat — and “You can trust your cable company” will not suffice. 

 Experts Are Really, Really Worried About The State Of The 2020 Census - The U.S. Census Bureau is significantly scaling back its preparations for the 2020 census, which experts say could compromise the agency’s ability to accurately conduct its constitutionally mandated count of people. An inaccurate census could have drastic consequences, with the potential to hit minority communities the hardest.The survey, which the Constitution requires take place every 10 years, helps allocate hundreds of billions of federal dollars to state and local governments, according to the Census Project, a group that tracks the census. The survey data is also used to draw electoral districts, because each district is legally required to have roughly the same number of people.Census officials initially planned to do three dress rehearsals of the census ahead of 2020, but cut two of those tests because of a funding shortfall. Experts also note that members of minority communities may be hesitant to give personal information to the government, and that the bureau currently doesn’t have enough partnership specialists in place to begin to build their trust.The 2010 census form.  (blackwaterimages via Getty Images)The bureau has been hampered by budget issues ― specifically, a congressional mandate that it cannot spend more on the 2020 census than it did in 2010. This is the first time in modern history that the bureau has faced such a cap, said Terri Ann Lowenthal, a census consultant who worked as staff director of the House census oversight subcommittee from 1987 to 1994.The bureau has also faced a shortfall of a little over $200 million since 2012, said John Thompson, who served as the director of the Census Bureau from 2013 until he abruptly resigned in May.  This has resulted in the agency prioritizing certain crucial technological and automation upgrades, Thompson told HuffPost. It has also resulted in the bureau putting less money behind advertising and local partnerships that do long-term work in communities and encourage people to respond to the census.

Aurelius Capital Sues to Dismiss (Our Colony) Puerto Rico’s Bankruptcy Case Based on the Appointments Clause -  by Lambert Strether - Aurelius Capital is a hedge fund chaired by Mark Brodsky, a lawyer formerly employed by Paul Singer’s Elliott Associates (yes, that Paul Singer). Aurelius, bless their hearts, is trying avoid taking a haircut on some Puerto Rican bonds they vultured, but in the process the extremely smart lawyers they’ve hired (chief among them Theodore B. Olson, of Gibson, Dunn & Crutcher) have come up with some amazing arguments with broad potential implications, regarding both the appointments clause and Puerto Rico’s colonial status. Here is a link to the key filing (Case: 17-03283-LTS):(PDF)[1]. And here is the Financial Oversight and Management Board’s (FOMB’s) response: (PDF). Now, I should state at the outset that I’m not a lawyer, have never been a lawyer, and don’t play one on TV, so I’m not going to attempt to assess the legal merits of Aurelius’s claims. Nor will I attempt to trace the progress of the case through the docket. However, I’ve got to say that as a layperson, I wish that what Olsen et al. are claiming is correct, even if the courts ultimately don’t accept their argument. (This is distinct from the question of whether I wish Puerto succumbs to the tender gnawings of a vulture fund; I don’t[2].) I should also state that I began this post thinking I’d be looking at Puerto Rico’s financial status under the FOMB after Hurrricane Maria, but when I ran across this case doing my research, I thought I’d better bring it to your attention, given Brodsky and Singer’s success in vulturing Argentinian bonds. All that said, first I’ll briefly look at the background of the case, then I’ll look at the public policy aspects of the Appointments Clause and the Insular Cases, and conclude.[3]

Bernie Sanders to unveil a $146 billion “Marshall Plan” for Puerto Rico -  On Tuesday, Sen. Bernie Sanders (I-Vt.) will unveil an ambitious $146 billion Puerto Rico recovery plan he says will allow renewable power sources such as solar and wind to provide about 70 percent of the island’s energy needs within the decade.The bill, which has the backing of San Juan Mayor Carmen Yulín Cruz, also calls on Congress to consider retiring Puerto Rico’s debt and would give the island billions in additional federal funding for transportation, health care and education in the hopes of stemming a feared mass exodus to the mainland. It would also allocate funds to the Virgin Islands, which were similarly devastated by Hurricane Maria. “This is the closest we have to a Marshall Plan for Puerto Rico,” said Ramón Luis Nieves, a former member of the Senate of Puerto Rico who has testified to Congress about the hurricane’s impacts.  Sanders's bill is highly unlikely to get a vote in Congress and is more generous even than the $94 billion requested by Ricardo Rosselló, Puerto Rico’s governor.  Sanders’s bill would give $62 billion to help the cash-strapped Puerto Rican government; $51 billion for economic development; $27 billion for infrastructure, including new energy infrastructure; and billions more for education and environmental remediation. The Trump administration has requested $29 billion in emergency natural disaster funding to be shared between Puerto Rico, Florida, and Texas — but only a fraction is designated for Puerto Rico. That package is expected to pass.“More than two months after Hurricane Maria, in the wealthiest nation in the history of the world, most of the homes in Puerto Rico and the U.S. Virgin Islands are still without electricity. This is beyond belief,” Sanders said. “Congress must work with the people of Puerto Rico to fundamentally transform its expensive, antiquated and unreliable system.”

Sanders Intros $146 Billion 'Transformation Blueprint' for Puerto Rico and Virgin Islands - Calling on the federal government to bring its "full resources to bear" on the crisis in Puerto Rico and the U.S. Virgin Islands, Sen. Bernie Sanders (Vt.-I) unveiled a $146 billion recovery package for the U.S. territories on Tuesday, two months after Hurricane Maria left destruction across the islands. Sanders and the Democratic co-sponsors of the new bill argue it is necessary to treat the recovery as the emergency it is, but that rebuilding the islands' battered infrastructure should not mean simply returning to things as they were. "It is absolutely without any sense at all to rebuild Puerto Rico's antiquated, centralized and inefficient electric grid that was dependent on expensive and dirty imported fossil fuels," Sanders said in a press conference where he introduced the bill, adding that with the nickname "La Isla Del Sol," the island could be leading the way in the use of solar power and other sustainable energy. "Before the storm Puerto Rico only had two percent of its electricity coming from sustainable energy," remarked Sanders. "Beyond rebuilding damaged facilities, our bill makes a major proactive investment in Puerto Rico and the U.S. Virgin Islands' infrastructure." The bill—formally called The Puerto Rico and Virgin Islands Equitable Rebuild Act—was referred to as "a Marshall Plan for Puerto Rico" by Ramon Luis Nieves, former lawmaker on the island. It would give $62 billion to the territory to help it pay off its debts, $51 billion for economic development, and $27 billion for infrastructure.  Sanders noted in his press conference with Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.) and other coo-sponsors, that more than two months after Maria made landfall, "half of the people there—American citizens all—still have no electricity, many are still struggling to get clean drinking water and more than 100,000 people have left Puerto Rico."

The mainstream media didn’t care about Puerto Rico until it became a Trump story -  President Trump’s apathy to the plight of 3.4 million U.S. citizens in Puerto Rico has been apparent since Hurricane Maria devastated the island in September. He’s failed to focus consistently on recovery from the storm, and when he does discuss conditions in Puerto Rico in public remarks or on Twitter, he’s as likely to threaten or blame the island for its desperate situation as he is to offer help.Perhaps Trump has been counting on American voters not caring much about the story, either. Puerto Ricans cannot vote in presidential elections; polls show that almost half of Americans don’t even know Puerto Ricans are U.S. citizens. But even those in charge of American newsrooms who are aware that Maria and its aftermath is a domestic disaster did not cover the catastrophe as extensively they did Texas and Florida, hit just weeks before Puerto Rico was by massive hurricanes.Most national media only started to pay attention to Puerto Rico after days of silence by Trump (as they jumped on the story, they seemed to forget the fact that they had also undercovered the island’s plight). When Trump started a fight with San Juan Mayor Carmen Yulín Cruz, Puerto Rico finally started to get more coverage. An examination of over 80 print and online media coverage across the United States shows that more than 1,100 news outlets carried stories about Harvey and Irma, the two other monster storms that struck U.S. soil this hurricane season, while only about 500 carried stories on Maria in a similar time frame. Overall, Hurricane Maria received only a third as many mentions in text as hurricanes Harvey and Irma.

Supreme Court’s cake case pits gay rights versus Christian faith (Reuters) - When conservative Christian baker Jack Phillips in 2012 politely but firmly told Colorado gay couple David Mullins and Charlie Craig he would not make them a cake to celebrate their wedding, it triggered a chain of events that will climax on Tuesday in highly anticipated U.S. Supreme Court arguments. Phillips contends the U.S. Constitution’s free speech guarantees protect him from making a cake that would violate his religious beliefs against gay marriage. To Mullins and Craig, the baker’s refusal represented a simple case of unlawful discrimination based on sexual orientation. In one of the biggest cases of the conservative-majority court’s nine-month term, the justices -- just two years after legalizing gay marriage -- must decide whether Phillips’ action was constitutionally protected and he can avoid punishment for violating Colorado anti-discrimination law. A ruling favoring Phillips could open the door for certain businesses to spurn gay couples by invoking religious beliefs, as some wedding photographers, florists and others already have done. 

Why Roy Moore Matters  - Patrick Buchanan - Why would Christian conservatives in good conscience go to the polls Dec. 12 and vote for Judge Roy Moore, despite the charges of sexual misconduct with teenagers leveled against him? Answer: That Alabama Senate race could determine whether Roe v. Wade is overturned. The lives of millions of unborn may be the stakes.Republicans now hold 52 Senate seats. If Democrats pick up the Alabama seat, they need only two more to recapture the Senate, and with it the power to kill any conservative court nominee, as they killed Robert Bork.Today, the GOP, holding Congress and the White House, has a narrow path to capture the Third Branch, the Supreme Court, and to dominate the federal courts for a decade. For this historic opportunity, the party can thank two senators, one retired, the other still sitting.The first is former Democratic Majority Leader Harry Reid of Nevada.In 2013, Harry exercised the “nuclear option,” abolishing the filibuster for President Obama’s judicial nominees. The Senate no longer needed 60 votes to confirm judges. Fifty-one Senate votes could cut off debate, and confirm.Iowa’s Chuck Grassley warned Harry against stripping the minority of its filibuster power. Such a move may come back to bite you, he told Harry. Grassley is now judiciary committee chairman. And this year a GOP Senate voted to use the nuclear option to shut down a filibuster of Supreme Court nominee Neil Gorsuch, who was then confirmed with 55 votes. Yet the Democratic minority still had one card to play to block President Trump’s nominees - the “blue slip courtesy.” Sen. Al Franken of Minnesota used the blue slip to block the Trump nomination of David Stras of Minnesota to the 8th U.S. Circuit Court of Appeals. Franken calls Stras too ideological, too conservative.But Grassley has now decided to reject the blue slip courtesy for appellate court judges, since their jurisdiction is not just over a single state like Minnesota, but over an entire region. Thus have the skids been greased for a conservative recapture of the federal judiciary unseen since the early days of FDR.

Senate panel scraps deadline for Kushner to turn over documents | TheHill: The Senate Judiciary Committee has relaxed its Monday deadline for White House adviser Jared Kushner to turn over documents relating to WikiLeaks and Russian overtures to the Trump campaign, Politico reported Monday. “There is no current deadline as both the Committee and Mr. Kushner's counsel are working in good faith to produce whatever else may be responsive and relevant to the Committee's inquiry,” Kushner’s lawyer, Abbe Lowell, told Politico in a statement. Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and ranking member Dianne Feinstein (D-Calif.) sent a letter earlier this month to Lowell demanding additional documents from Kushner as part of the committee’s investigation into Russian meddling in the 2016 election. In the letter, the two senators said Kushner received and forwarded emails about WikiLeaks, as well as a communication about a “Russian backdoor overture and dinner invite.” Kushner was originally given a deadline of Nov. 27 to turn over relevant documents.

Jared Kushner questioned by Mueller’s team about Michael Flynn, insider says -- Jared Kushner was questioned this month by special counsel Robert Mueller’s team of investigators about the former national security adviser Michael Flynn, a person familiar with the investigation confirmed on Wednesday to the Associated Press.  The person said the questioning of Donald Trump’s son-in-law took about 90 minutes or less and was aimed in part at establishing whether Kushner had any information on Flynn that might be exculpatory. The person added that multiple White House witnesses had been asked about their knowledge of Flynn, who was forced to resign from the White House in February after officials concluded he had misled them about his contacts with the Russian ambassador.  The confirmation of Kushner’s interview came as prosecutors working for Mueller postponed grand jury testimony related to Flynn’s private business dealings. The reason for the postponement, first reported by CNN, was not immediately clear, but it comes one week after attorneys for Flynn alerted Trump’s legal team that they could no longer share information about the case. That discussion between lawyers was widely seen as a possible indication that Flynn was moving to cooperate with Mueller’s investigation or attempting to negotiate a deal for himself.  An attorney for Flynn, Robert Kelner, did not immediately respond to email and phone messages on Wednesday afternoon. Peter Carr, a spokesman for Mueller, declined comment.

Flynn Used White House Position To Lobby For Mid-East Nuclear Reactors: WSJ -- Rumors that former National Security Adviser Mike Flynn might be the next former Trump administration official to be indicted by Special Counsel Robert Mueller have been circulating for weeks now. Last week was no exception, with US media reporting that Flynn’s legal team had decided to stop cooperating with the White House council and President Donald Trump’s administration.  Now, in the latest Flynn development to arrive Tuesday evening, the WSJ reports on Flynn’s push during his brief tenure in the administration to convince President Trump to support a plan to build roughly a dozen nuclear power plants across the Middle East.Private-sector backers of a controversial Middle East nuclear plan worked with former national security adviser Mike Flynn to promote it inside the White House, to the point of sending him a draft memo for the president to sign authorizing the project.At issue was a proposal to build dozens of nuclear reactors, billed by its backers as a “Marshall Plan for the Middle East.” Before joining the White House, Mr. Flynn, a retired lieutenant general, had advised some of the U.S. companies involved in the plan in his capacity as a consultant.At the heart of the issue is whether Flynn abused his position within the administration to help benefit his consulting clients.Mr. Flynn’s efforts to promote the plan included telling a National Security Council staffer to create an official directive detailing the plan for President Donald Trump to sign, according to people familiar with the matter. He also brought the project to the attention of a key administration ally, these people say. That said, if passed, the plan was projected to generate $250 billion in revenue for U.S. companies. However, according to WSJ, the memo never made it to the president’s desk. But this may not matter: Mueller is separately investigating Flynn’s work before he joined the White House as part of a probe into whether he improperly concealed financial ties to Turkey and to Russia.

Michael Flynn Pleads Guilty to Lying to the F.B.I. and Will Cooperate With Russia Inquiry - — President Trump’s former national security adviser, Michael T. Flynn, pleaded guilty on Friday to lying to the F.B.I. about conversations with the Russian ambassador last December, becoming the first senior White House official to pledge cooperation in the special counsel’s wide-ranging inquiry of election meddling. Mr. Flynn’s pre-inauguration discussions with Sergey I. Kislyak, the Russian ambassador, were part of a coordinated effort by aides running Mr. Trump’s transition into the White House to create foreign policy before they were in power, documents released as part of Mr. Flynn’s plea agreement show. Their efforts undermined the existing policy of President Barack Obama and flouted a warning from a senior Obama administration official to stop meddling in foreign affairs until after the inauguration. Court documents do not disclose what Mr. Trump knew about Mr. Flynn’s discussions. But in at least one instance, federal prosecutors say, Mr. Flynn was directed by a “very senior member” of the presidential transition team. Mr. Trump’s lawyers believe that unnamed aide was Mr. Trump’s son-in-law and close adviser, Jared Kushner, according to a lawyer briefed on the matter. The transition team was led by Vice President Mike Pence, and its top members included Mr. Kushner; Reince Priebus, Mr. Trump’s first chief of staff; and K.T. McFarland, who was Mr. Flynn’s deputy and was appointed to be the ambassador to Singapore. Mr. Flynn spoke to her about discussing sanctions against Russia with Mr. Kislyak, according to the lawyer.  Mr. Flynn’s decision to plead guilty marked a significant new phase in the investigation of the special counsel, Robert S. Mueller III, and a politically treacherous development for the president and his closest aides, whose activities in the West Wing are being scrutinized by F.B.I. agents and federal prosecutors.

Michael Flynn's guilty plea: A comprehensive timeline -Former national security adviser Michael Flynn pleaded guilty on Friday to lying to the FBI about contacts he had with a Russian ambassador. Here is a comprehensive timeline of the actions and events that led to this moment, based on government documents and news reports.

  • Dec. 22, 2016 The Obama administration signals that it may not veto an Egyptian-sponsored United Nations Security Council resolution that condemned Israeli housing construction in East Jerusalem and the occupied West Bank as a “flagrant violation under international law” that was “dangerously imperiling the viability” of a peace deal between the Israelis and Palestinians. Flynn spoke to Sergey Kislyak, the then Russian ambassador, and asked Russia to delay or defeat a pending U.N. Security Council resolution, according to a criminal information filed in federal court by the special prosecutor. The conversation concerned Resolution 2334, demanding Israel stop all settlement activity. A statement of offense filed in court says that a “a very senior transition official” directed Flynn to call Russia and other governments about the resolution. The official is not identified but media reports said it is Jared Kushner, Trump’s son-in-law. President-elect Trump was vocally opposed to the U.N. resolution, tweeting on the morning of Flynn’s conversation that it should be vetoed.
  • Dec. 29, 2016. The Obama administration announces measures against Russia in retaliation for what U.S. officials characterized as interference in the 2016 election, ordering the expulsion of Russian “intelligence operatives” and slapping new sanctions on state agencies and individuals suspected in the hacks of U.S. computer systems. Russia’s Foreign Minister Sergey Lavrov announces 35 U.S. diplomats will be declared persona non grata. “We, of course, cannot leave unanswered the insults of the kind; reciprocity is the law of diplomacy and foreign relations,” Lavrov says.   Flynn speaks by phone with Kislyak and discusses the sanctions and suggests the possibility of sanctions relief once Trump is sworn into office. The call is monitored by U.S. intelligence agencies.The criminal information says Flynn asked Kislyak to “refrain from escalating the situation in response to sanctions that the United States had imposed on Russia that same day.”
  • Dec. 30 In a surprise, Russian President Vladimir Putin announces in a statement that Russia will not take action against the sanctions.“As it proceeds from international practice, Russia has reasons to respond in kind,” Putin says. “Although we have the right to retaliate, we will not resort to irresponsible ‘kitchen’ diplomacy but will plan our further steps to restore Russian-US relations based on the policies of the Trump Administration.” Putin’s announcement is made in the afternoon of Dec. 30, or morning in the United States. Trump tweets approvingly and pins the tweet at the top of his Twitter page. (The White House insists that Trump had no prior knowledge of Flynn’s conversations about sanctions with Kislyak.)
  • (much more)

Kushner Is Said to Have Ordered Flynn to Contact Russia -- Former national security adviser Michael Flynn's guilty plea Friday for lying to the FBI is alarming news for Donald Trump. But the first person it's likely to jeopardize will be the president's son-in-law, Jared Kushner. Two former officials with the Trump transition team who worked closely with Flynn say that during the last days of the Obama administration, the retired general was instructed to contact foreign ambassadors and foreign ministers of countries on the U.N. Security Council, ahead of a vote condemning Israeli settlements. Flynn was told to try to get them to delay that vote until after Barack Obama had left office, or oppose the resolution altogether. That is relevant now because one of Flynn’s lies to the FBI was when he said that he never asked Russia's ambassador to Washington, Sergey Kislyak, to delay the vote for the U.N. Security Council resolution. The indictment released today from the office of special prosecutor Robert Mueller describes this lie: "On or about December 22, 2016, Flynn did not ask the Russian Ambassador to delay the vote on or defeat a pending United Nations Security Council resolution." At the time, the U.N. Security Council resolution on Israeli settlements was a big deal. Even though the Obama administration had less than a month left in office, the president instructed his ambassador to the United Nations to abstain from a resolution, breaking a precedent that went back to 1980 when it came to one-sided anti-Israel resolutions at the U.N. This was the context of Kushner's instruction to Flynn last December. One transition official at the time said Kushner called Flynn to tell him he needed to get every foreign minister or ambassador from a country on the U.N. Security Council to delay or vote against the resolution. Much of this appeared to be coordinated also with Israeli prime minister Benjamin Netanyahu, whose envoys shared their own intelligence about the Obama administration's lobbying efforts to get member states to support the resolution with the Trump transition team.  

Flynn plea brings Mueller closer to the White House | TheHill: The guilty plea from former national security adviser Michael Flynn has brought special counsel Robert Mueller’s investigation onto the front lawn of the White House. Flynn, who on Friday pleaded guilty to lying to federal investigators about the nature of a series of calls with the Russian ambassador, is the first person successfully prosecuted by Mueller who held a formal position in the Trump administration. And multiple outlets on Friday reported that current senior White House adviser Jared Kushner was the one who directed at least some of Flynn’s calls to the ambassador — in a potential violation of a law prohibiting private citizens from engaging in foreign policy. Flynn is now cooperating with the special counsel’s investigation, which is examining potential ties between the campaign and Moscow during the 2016 presidential race, as part of his plea deal. A White House lawyer who is handling matters related to the various Russia investigations said Friday that the plea deal implicated no one other than Flynn, and he said the false statements Flynn made to the FBI “mirror the false statements to White House officials which resulted in his resignation in February of this year.” But government prosecutors on Friday raised new questions about who in Trump’s orbit knew Flynn was misrepresenting the content of the calls — and what kind of testimony the former intelligence official might be providing to investigators. Mueller is authorized to investigate any other matters that may arise during the course of his investigation. Under the plea agreement he negotiated with Mueller, Flynn will face at most six months in prison and a $9,500 fine — a light sentence compared with the various crimes of which he is accused, legal analysts say. 

Trump On Flynn's Plea: "I'm Not Worried At All; What Has Been Shown Is No Collusion" -- After cancelling a press briefing Friday afternoon following Gen. Flynn’s decision to plead guilty to lying to the FBI during Special Counsel Robert Mueller’s probe into collusion between the Trump campaign and the Russians, President Trump has spoken out about the situation for the first time.  No, I’m not” worried about what Michael Flynn will tell investigators Trump told reporters. “What has been shown is no collusion. There’s been absolutely no collusion so we’re very happy.”Flynn has agreed to cooperate with Mueller's investigation into Russian election hacking and alleged collusion between Trump campaign officials and Moscow, a probe which Trump has called a "witch hunt".“We'll see what happens,” Trump told reporters of the investigation on Saturday.

Flynn to testify Trump told him to contact Russians - NY Daily News - Disgraced national security adviser Michael Flynn is prepared to testify that President Trump “directed him to make contact with the Russians” during last year’s presidential campaign, according to reports.  Flynn has promised special counsel Robert Mueller his full cooperation as he pleads guilty to lying to the FBI, ABC News’ Brian Ross reported on Friday. Flynn pleaded guilty to lying to the FBI about his contacts with a Russian diplomat, but was convinced to cooperate after he learned the extent of the information Mueller's team had on him, Ross said. “He is prepared to testify, we are told by a confidant, against President Trump, against members of the Trump family and others in the White House,” Ross said. He is prepared to testify that, as a candidate, Trump “directed him to make contact with the Russians.” U.S. District Court Judge Rudolph Contreras said during Flynn’s plea hearing that the government will decide how effectively Flynn is cooperating as part of a plea agreement.Flynn said, “my guilty plea and agreement to cooperate with the Special Counsel's Office reflect a decision I made in the best interests of my family and of our country.”ABC also reported that Flynn made the decision to cooperate with Mueller only in the past 24 hours, as he faced mounting legal bills and intense pressure from prosecutors.  “If true, what kinds of things did Trump direct Flynn to request from Russians officials during and after the campaign?” former federal attorney Preet Bharara tweeted. “Trump is not know for caution or modest requests.” Robert Costello, the former deputy chief of the Criminal Division for the U.S. Attorney’s Office of New York’s southern district, said Flynn’s guilty plea is “highly significant” for Mueller’s team. “This can clearly create problems for Donald Trump,” Costello said. Flynn may have violated the obscure Logan Act, a 1799 law barring citizens from negotiating with foreign governments. “Unless you’re the U.S. government, you’re simply not allowed to contact the Russian government to discuss policy. That’s just a fact,” he said.

The Scalp-Taking of Gen. Flynn - Russia-gate enthusiasts are thrilled over the guilty plea of President Trump’s former National Security Adviser Michael Flynn for lying to the FBI about pre-inauguration conversations with the Russian ambassador, but the case should alarm true civil libertarians. What is arguably most disturbing about this case is that then-National Security Adviser Flynn was pushed into a perjury trap by Obama administration holdovers at the Justice Department who concocted an unorthodox legal rationale for subjecting Flynn to an FBI interrogation four days after he took office, testing Flynn’s recollection of the conversations while the FBI agents had transcripts of the calls intercepted by the National Security Agency. In other words, the Justice Department wasn’t seeking information about what Flynn said to Russian Ambassador Sergey Kislyak – the intelligence agencies already had that information. Instead, Flynn was being quizzed on his precise recollection of the conversations and nailed for lying when his recollections deviated from the transcripts.For Americans who worry about how the pervasive surveillance powers of the U.S. government could be put to use criminalizing otherwise constitutionally protected speech and political associations, Flynn’s prosecution represents a troubling precedent. Though Flynn clearly can be faulted for his judgment, he was, in a sense, a marked man the moment he accepted the job of national security adviser. In summer 2016, Democrats seethed over Flynn’s participation in chants at the Republican National Convention to “lock her [Hillary Clinton] up!” Then, just four days into the Trump presidency, an Obama holdover, then-acting Attorney General Sally Yates, primed the Flynn perjury trap by coming up with a novel legal theory that Flynn – although the national security adviser-designate at the time of his late December phone calls with Kislyak – was violating the 1799 Logan Act, which prohibits private citizens from interfering with U.S. foreign policy.

Susan Sarandon: Hillary Clinton Would've Been "More Dangerous" Than Trump -- In an interview with the Guardian published Sunday night, actress Susan Sarandon – a noted anti-war and climate progressive – described her former friend Hillary Clinton as “very dangerous” in response to an interviewer’s question about why she supported Green Party candidate Jill Stein. Furthermore, Sarandon, who has been the subject of vicious and persistent attacks by leftists for supporting a third-party candidate that many blame, wrongly, for throwing the election to Trump. She said she had to change her phone number because  angry Clinton supporters left a torrent of death and rape threats on her voicemail. Sarandon, who fist became involved in activism as a young woman when she became an early and vocal proponent of the anti-War movement in the late 1960s and early 1970s, even suggested that Clinton might’ve been “more dangerous” than Trump. Did she really say that Hillary was more dangerous than Trump? “Not exactly, but I don’t mind that quote,” she says. “I did think she was very, very dangerous. We would still be fracking, we would be at war [if she was president]. It wouldn’t be much smoother. Look what happened under Obama that we didn’t notice." Though she supported Clinton’s first bid for the senate in 2001, Sarandon said her support for Clinton evaporated when the then-senator voted in favor of the war in Iraq.

Former Secret Service Agent Threatens To Reveal Details About Bill Clinton And Epstein's "Lolita Express" In a furious twitter exchange with a Clinton aide on Friday, former secret service agent Dan Bongino threatened to reveal new details about Bill Clinton’s 26 documented trips aboard notorious pedophile Jeffrey Epstein’s private jet, nicknamed the “Lolita Express." For those who are unfamiliar with his story, Jeffrey Epstein is a New York City financier who pled guilty in 2008 to a single count of soliciting sex from an underage girl. He eventually spent 13 months in prison and was forced to register as a level three sex offender (considered the highest risk of re-offending) though stories of his lust for girls as young of 12 have spread like wildfire in recent years.Epstein allegedly installed beds in his custom jet, and also purportedly filmed powerful men during romps with underage girls to obtain materials for blackmail. According to Fox News, Epstein allegedly had a team of traffickers who procured girls as young as 12 to service his friends on Epstein’s “Orgy Island,” an estate on Little St. James in the US Virgin Islands. Epstein now lives permanently in the US Virgin Islands. Clinton chose to continue his association with Epstein even after the lurid trial, according to the Alliance to Rescue Victims of Trafficking, “everyone within his inner circles knew was a pedophile." Speculation that Clinton was involved with Epstein was noted in "Bill Clinton Was Here": The Elite One-Percent’s 'Orgy Island' Exposed." An article by the now defunct Gawker titled "Flight Logs Put Clinton, Dershowitz on Pedophile Billionaire’s Sex Jet" added to speculation about Clinton's troubling relationship with the convicted sex offender.

Don’t Look to India’s Universal ID System as Model for Biometrics to Replace Social Security Numbers --Jerri-lynn Scofield - India’s leading financial newspaper, The Economic Times, featured a piece today, You can’t make citizens safer by making them more vulnerable. Aadhaar does exactly that that spotlighted flaws in India’s Aadhaar universal identification number scheme– including its undue reliance on biometrics. As I discussed at greater length in an October post, Biometric ID Fairy: A Misguided Response to the Equifax Mess that Will Only Enrich Cybersecurity Grifters and Strengthen the Surveillance State, the Aadhaar system is being held up as a model by those who would like to capitalize on the Equifax data breach by replacing US Social Security numbers with a biometric identification system.Given that the Aadhaar scheme is being touted as a model for the US to consider, I thought it would be worth spelling out some of its flaws, many of which are well known in India but with which the core of Naked Capitalism’s readership is not familiar.

Otting takes reins from Noreika at OCC - Former bank CEO Joseph Otting was sworn in Monday as the country's top regulator of national banks. Otting succeeds Keith Noreika, who served since May as acting comptroller of the currency. During Noreika’s short tenure atop the Office of the Comptroller of the Currency, he took numerous stances that drew cheers from bankers, including his opposition to a proposed ban on mandatory arbitration clauses. Otting is expected to support a similar industry-friendly agenda. Joseph Otting was president and CEO of OneWest Bank from 2010 to 2015. Bloomberg News “I look forward to enhancing the value of national bank and federal savings charters, reducing unnecessary burden, and promoting economic opportunity while maintaining the safety and soundness of the federal banking system,” Otting said in a statement. Otting is widely expected to continue Noreika’s push to roll back Obama-era initiatives that placed greater emphasis on consumer protection. Otting was president and CEO of OneWest Bank from 2010 to 2015, and after his nomination by President Trump, he drew criticism over the bank’s treatment of financially strapped homeowners. Progressive groups called the Pasadena, Calif.-based bank a foreclosure mill. Still, the Senate confirmed Otting by a 54-43 margin on Nov. 16, with two Democrats joining Republicans in supporting his nomination. Otting was sworn in by Treasury Secretary Steven Mnuchin, the onetime chairman of OneWest. 

How Fed's Powell would reshape banking regs — Jerome Powell’s nomination hearing Tuesday was a textbook in how federal regulators must walk a political tightrope in 2017.  Chosen to run the Federal Reserve Board in a post-crisis, deregulatory and yet highly partisan environment, Powell was quick to assure Republican senators of his regulatory relief credentials. But Democrats still worry that he and other Trump appointees might upend the Dodd-Frank Act regulatory regime. For the most part, Powell showed his preference for the former, expressing resistance to writing new regulations and support for tailoring rules for smaller banks. He backed steps to ease the burden for community banks on capital requirements and the Volcker Rule, while appearing to agree with the legislative framework Senate Banking Committee Chairman Mike Crapo has crafted with Democrats on a regulatory relief bill. “We want regulations to be the most intense and most stringent for the very largest most complex institutions and decrease in intensity, stringency as we move down” to regional and community banks, Powell said in his hearing before the Banking Committee.But Powell, now a Fed governor, has largely supported the central bank’s post-crisis regulatory regime. At the hearing, he sought to ease concerns by Democrats about the influence of the Trump administration.“I’m strongly committed to an independent Federal Reserve,” he said.  Here are key takeaways from the hearing:

  • Powell is strongly committed to regulatory relief. The Fed nominee clearly has come down on the side of easing banks’ regulatory burden, pledging to prioritize steps to tailor requirements based on the size or complexity of an institution while saying the Fed does not have plans to advance further rules. “Tailoring of regulation is one of our most fundamental principles,” he said.
  • There is still skepticism regulatory relief will help community banks. Some senators needed further convincing that the Federal Reserve under Powell would be sufficiently focused on easing the regulatory burden for community banks. Sen. John Kennedy, R-La., asked Powell if he thought community banks shared any of the responsibility for the 2008 financial crisis. “It’s fair to say that community banks did not contribute to the crisis in 2008,” Powell said.  But then Kennedy followed up by asserting that the Fed had “punished” smaller banks with the bevy of post-crisis rules.
  • Democrats are worried the Fed’s independence will suffer in Trump administration. As Republicans sought assurances that Powell will direct the central bank to take a lighter approach to regulation, Democrats expressed concern about the Trump administration’s growing influence on financial regulators and that the agencies will go too far in rolling back crisis-era rules.  “The current administration does not appear to value independence — in the judiciary, the FBI, or the Federal Reserve,” said Sen. Sherrod Brown, D-Ohio, the Banking Committee’s ranking member.“In unprecedented ways, the president has made comments about the current Fed chair, as well as interest rates,” Brown said. “The search for the Fed chair seemed like an episode of 'The Apprentice,' ” he said.
  • The Fed nominee supports softening asset thresholds. One of the biggest regulatory relief issues involves the asset cutoffs at which bigger banks face a tougher level of regulation. For example, many support raising the $50 billion threshold in Dodd-Frank for “systemically important” banks, with some arguing that a numeric threshold should be replaced with an activities-based trigger. Powell said, in general, he supports having both components — a “discretionary approach” and a numeric threshold — having a role.
  • Powell does not see big risk from cryptocurrencies in the short term.  “There’s no question, the valuation [of cryptocurrencies] have gone up a lot in the last year or so,” Powell said. “In the long, long run, I think cryptocurrencies could matter, but they don’t really matter today.”
  • Stress test rollback isn’t a done deal.  Brown further pressed Powell on whether he thought that the kinds of regulatory changes envisioned by the administration and Congress might “pave the way” for a future financial crisis. Powell said that, while “certainty is kind of a high standard,” he was confident that the changes would not lead to that kind of an effect. “What about fewer stress tests?” Brown asked.  “That’s not something we’ve decided,” Powell responded. “Stress testing is a really important post-crisis innovation, and the banks will tell that to you privately.”
  • No free pass for Wells Fargo.  Cortez-Masto asked Powell whether he thought the Fed has been too harsh in its responses to bank misbehavior, citing specifically the cross-selling scandal that has embroiled Wells Fargo in the past year. While not referring to Wells by name, Powell said he found the behavior of the firm in that case to be “very disturbing” and did not think the Fed or other regulators have been too harsh in its responses.

Regulators must finish the job of penalizing Wells Fargo -- On Nov. 14, Federal Deposit Insurance Corp. Chairman Martin Gruenberg issued a stern warning about the deregulatory mindset of Congress and Trump-appointed bank watchdogs. Gruenberg, whose term is winding down, said recent proposed changes in post-financial crisis regulations threaten the “guardrails” that ensure a well-functioning banking sector.  He’s right. But Congress repealing provisions of Dodd-Frank is not the biggest threat to those guardrails. The most immediate threat involves the failure of regulators, including the FDIC itself, to assertively use powers that are still on the books.  Take the appalling case of Wells Fargo. For over a year, the bank has been hit with a flurry of revelations about wrongdoing. The number of accounts in the notorious fake-accounts scandal has swelled from 2.1 million to 3.5 million. The bank has been implicated in charging 800,000 auto loan borrowers unnecessarily for car insurance, with the added costs leading to nearly 25,000 cars being wrongly repossessed. It has saddled student loan borrowers with illegal late fees and other bogus charges. It has seized hundreds of cars from active-duty service members without the court order required by federal law. Wells Fargo’s prudential regulator, the Office of the Comptroller of the Currency, has found that the bank’s violations in the fake-accounts scandal constitute “unsafe or unsound” practices. By statute, this alone is grounds for the FDIC to terminate a bank’s deposit insurance. Yet there is no indication the FDIC has even begun an investigation into whether Wells Fargo deserves continued access to that privilege. The benefits of deposit insurance backed by the full faith and credit of the U.S. government (courtesy of the U.S. taxpayer) and a federally granted bank charter both come with responsibilities. When a bank repeatedly violates the public’s trust through fraud, abuse and violations of law, regulators are rightly empowered to reexamine its eligibility for such benefits. With missions of ensuring public confidence in the financial system and fair treatment of consumers, regulators also have the moral charge to do so. But they must be prepared to use that authority.

OCC To Dub Wells Fargo 'Repeat Offender' In Latest Enforcement Action -- It's beginning to seem like every day there's a new scandal breaking out at Wellls Fargo. Earlier this week, the Wall Street Journal dished on Wells Fargo’s latest scandal when it reported that several regulators and even one US attorney were investigating the bank for gouging clients of its foreign-exchange trading desk. Among the many humiliating details, the public learned that Wells had tacitly encouraged this behavior with an idiosyncratic bonus structure and even embarrassed and demoted an employee who complained to management about this behavior. The scandal marked the latest blemish on Wells Fargo’s once-pristine public image following a series of other scandals in its retail lending and banking division. Earlier this year, the public learned that Wells had forced customers in its auto-lending division to buy collision insurance they didn’t need. And when 20,000 customers refused or failed to pay the insurance, the bank had their cars repossessed. While the bank’s CEO Tim Sloane has been making the media rounds trying to rehabilitate its image, the Comptroller of the Currency, one of the bank’s regulators, has been preparing yet another enforcement action against the bank – what would be its fifth in as many years, according to WSJ. The paper reported that the OCC has informed Wells Fargo’s board of directors that it is considering an enforcement action known as a consent letter over the bank’s failure to remedy internal controls following its infamous cross-selling scandal – when 5,000 branch managers opened fake accounts in customers’ names that the customers themselves were often unaware of – and the auto-insurance scandal, which the bank publicly admitted over the summer. In the letter would label the bank a repeat offender and purportedly increase the penalties that could be assessed if the bank doesn't finally fix its compliance controls.

Report: Wells Fargo may face more federal sanctions over insurance, mortgage practices - Wells Fargo & Co. may face new sanctions from a key federal regulator over bad practices the bank has copped to over the last several months, including forcing auto loan customers into unneeded insurance policies and charging improper fees on some mortgage borrowers, according to a news report. The Wall Street Journal reported Wednesday that the Office of the Comptroller of the Currency, one of the regulators that last year fined Wells Fargo for its creation of sham bank accounts, has advised the San Francisco bank’s board that it may face a new formal reprimand for willingly harming customers and failing to correct problems in its mortgage and auto-lending businesses.The report, which cited unnamed sources familiar with the matter, suggested the OCC may issue a cease-and-desist order, a regulatory action that demands a bank stop certain practices and take corrective action.Such orders are sometimes accompanied by big fines. When federal regulators and the Los Angeles city attorney’s office reached a $185-million settlement with Wells Fargo last year over its sham-accounts scandal, that sum included a $35-million fine required by an OCC cease-and-desist order. A spokesman for the OCC said the agency does not comment on “supervisory matters pertaining to specific banks.” The potential OCC action focuses on two lines of business where Wells Fargo has admitted to bad practices that harmed customers. In July, the bank said that an internal investigation found that about 570,000 auto loan customers may had been forced to pay for auto insurance policies they didn’t need and that some 20,000 may have had their vehicles repossessed because the added cost of the unneeded policies pushed them into default. The policies in question are those put in place by lenders when borrowers don’t have or can’t prove they have auto insurance of their own. However, the Wells Fargo borrowers either had their own insurance or were not properly informed about the bank-placed policies. In October, the bank acknowledged that some mortgage borrowers may have been pushed to pay interest rate-lock fees that should have been paid by the bank. Those fees are owed when a mortgage application is delayed, and are supposed to be paid by borrowers only if they are responsible for the holdup. The rate-lock issue was first reported by ProPublica, and later led to lawsuits and an investigation by the Consumer Financial Protection Bureau.

Ex-OCC chief says bank holding companies may be obsolete -- On his final day at the Office of the Comptroller of the Currency, Keith Noreika took one last shot at well-entrenched U.S. banking regulations.A vocal champion of deregulation, Noreika argued that a 61-year-old federal law that encourages the formation of bank holding companies should be scaled back.“Our country is unusual among modern nations to invoke the concept of bank holding companies,” he said during a speech in Washington. “Canada, Germany, France, Switzerland all have robust, competitive banks without holding companies.” During Noreika’s six-month tenure as acting comptroller, one of the longstanding regulatory policies he questioned was the separation of banking from other commercial activities. The history of bank holding companies is intertwined with efforts to keep banking separate from commerce, and Noreika said Tuesday that bank holding companies may now be obsolete.

Will The Blockchain Render This Multibillion-Dollar Industry Obsolete? - Blockchain technology is on the cusp of disrupting another billion-dollar industry that most Americans rarely think about: Boring old title insurance.   Since the blockchain technology craze swept the US in 2015, technologists working to pinpoint new use-cases for the technology have been squawking about its potential to revolutionize how governments store and track ownership of land. The system used by most modern governments was developed centuries ago: In the US, property titles are public documents recorded with roughly 3,600 counties, towns and other jurisdictions. In some cases, the record is available only in writing and can be viewed only by visiting a town clerk’s office. Since the system in its present form leaves plenty of room for error, many homeowners purchase title insurance to protect against the possibility that their claim to the property is challenged – either because the records were lost of destroyed, or for any other reason. Several countries, including Ukraine, the Republic of Georgia, Honduras and Sweden have already partnered with Bitfury and other blockchain startups to develop a blockchain-based title-registry system. As WSJ reports, some of these systems are nearly ready to be implemented. For anybody familiar with how blockchain technology works, the utility here is obvious: Since the blockchain provides an immutable record of transactions, storing property titles on a blockchain-based system would substantially decrease the risk that a landowners’ claim is challenged. WSJ posits that title insurance could be among the industries that's most ripe for blockchain disruption. It's just one example of a multibillion-dollar industry that could be rendered obsolete overnight. To help get ahead of the problem, WSJ says many title insurers are investing resources into studying and developing blockchain technology, which could allow these companies to pivot by developing and managing the systems that otherwise would’ve put them out of business.

 Ethereum Now Handles More Transactions Than All Digital Currencies Combined - Via: Trusted Nodes: Ethereum, the barely two years old digital currency, now processes more transactions than all other digital currencies combined, including bitcoin. Ethereum currently processes 52.3% of all cryptocurrency transactions, followed by bitcoin at 33%, while Bitcoin Cash, currently third in market cap, is handling only 1.8% as pictured above. More than half a million transactions were processed yesterday by ethereum, a level that is now becoming common for the platform, rising considerably since early last year when it stood at just 10,000. While bitcoin is currently processing around 330,000 transactions, with no change in volumes for an entire year despite considerable growth and a claimed increase in capacity. Bitcoin’s transaction levels have been moving very much in a straight line due to a limited 1MB capacity. Although segregated witnesses (segwit) claimed to double it, in effect it has added as good as no capacity since its activation in August 2017. 

World’s biggest bitcoin exchange launches in U.S. as currency nears $10K - The Japanese cryptocurrency exchange bitFlyer picked a good day to expand to the United States. With bitcoin bumping against a new all-time high price of $10,000 — it has broken through on some foreign exchanges, though not yet in U.S. markets — bitFlyer, the world's largest bitcoin exchange by trading volume, opened its doors on Tuesday to American traders and institutional investors. It hopes to serve a rarefied user base: professional traders who buy and sell $100,000 or more in digital currency each month. To that end, bitFlyer's U.S. exchange offers sophisticated trading tools and an application programming interface for programmatic traders, according to a press release. Both bitcoin's string of record-setting highs — it took barely a week to climb from $8,000 to $9,000 — and the U.S. expansion of bitFlyer, which has processed more than $100 billion in digital currency trades this year alone, are accelerating cryptocurrency's rapid shift into the mainstream, despite the banking industry's fears. By early 2018, the company plans to add support for other cryptocurrencies such as litecoin and Ethereum as well as Bitcoin Cash and Ethereum Classic, which are alternative versions of their namesakes. 

PwC Becomes First "Big Four" Firm To Accept Payment In Bitcoin - Regulators may be skeptical of the burgeoning ICO market, where outright fraud isn’t uncommon, but that isn’t stopping some of the world’s largest audit and consulting firms from trying to win their business. PWC revealed that it will begin accepting payment for its consulting services in bitcoin because it is increasingly working with startups in the city involved in cryptocurrencies and blockchain, the open-ledger technology that processes bitcoin transactions by logging them on a public record. The firm also noted its advisory work for initial coin offerings – which typically collect payment in bitcoin and Ethereum – along with crypto exchanges and crypto funds, according to the Wall Street Journal. “This decision helps illustrate how we are embracing new technology and incorporating innovative business models across our full range of services,”Raymund Chao, chairman of PwC Asia-Pacific, said. “It is also an indication that bitcoin and other established cryptocurrencies have now developed into more broadly accepted forms of settlement."

Is it time for bankers to rethink bitcoin? -- This week bitcoin roared to new heights, took a steep dive and then leveled off — all the while grabbing major headlines and prompting a radio gabfest coast to coast. But it’s the evolving conversation among mainstream financial institutions — which may have accelerated just a bit in recent days— that bears close watching. Bitcoin got a Wall Street endorsement of sorts on Wednesday when Nasdaq said it plans to introduce bitcoin futures in the first half of 2018. Previously, Cantor Fitzgerald had announced plans to launch bitcoin derivatives, and CME Group in Chicago also said it would provide futures on bitcoin contracts.News that Nasdaq will begin supporting bitcoin futures is “a clear message that the traditional parts of the financial services industry are embracing digital currencies,” said Richard Levin, chair of the financial services technology and regulation practice at the law firm Polsinelli PC.  You look at the fact that the Chicago Mercantile Exchange and Nasdaq — two of the leading exchanges — are embracing financial products connected to a digital asset," Levin said. "They aren’t charging into this cavalierly. They had discussions with their regulators. And many [institutional investors] are taking a look at this digital asset class and asking, is this a new asset we can trade? Just like the development of derivatives, some may feel this is a new area they can make money trading in.”Still, Levin said, regulators are likely to be concerned with the rise in popularity in bitcoin among individual retail investors who may not be as sophisticated and aware of bitcoin’s propensity for fluctuations. Indeed, top Federal Reserve officials are already warning about the speculative nature of bitcoin. “I think they’re worried that retail investors deemed not sophisticated enough might get burned,” he said.

Coinbase ordered to give the IRS data on users trading more than $20,000 - Most digital currencies exist in a sort of twilight state just beyond the grasp of federal regulators, but the U.S. tax authority is starting to get savvy to this whole bitcoin thing. On Wednesday, a federal judge in San Francisco ruled that Coinbase must supply the IRS with identifying information on users who had more than $20,000 in annual transactions on its platform between 2013 and 2015. After noticing that the number of tax returns claiming gains from virtual currency didn’t line up with the emerging popularity of digital currencies like bitcoin as an investment vehicle, the IRS asked Coinbase to hand over a broad swath of information on its users. Coinbase pushed back, and now the court has landed on a compromise that the company is calling a “partial victory.”“Coinbase itself admits that the Narrowed Summons requests information regarding 8.9 million Coinbase transactions and 14,355 Coinbase account holders. That only 800 to 900 taxpayers reported gains related to bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin in a given year suggests that many Coinbase users may not be reporting their bitcoin gains,” the court documents read.While cryptocurrency users who value the relative decentralization and privacy afforded by digital currencies won’t be happy, Coinbase succeeded in limiting the government’s initial request for information on all Coinbase users who made transactions from 2013 to 2015 to the smaller subset of high-value users.  Today the court narrowed the scope of documents that the IRS can request from Coinbase to taxpayer ID number, name, date of birth, address, transaction logs and account statements, deeming the rest of the documents “not necessary.” Again, these personal data requests will only apply to accounts that have bought, sold, sent or received more than $20,000 in any of those types of transactions between 2013 and 2015.As the court documents specify, the narrowed IRS request “applies to far fewer, but still more than 10,000, Coinbase account holders.” You can read the court decision in full below.

Wider cryptocurrency use could harm system stability: Fed’s Quarles — Federal Reserve Vice Chairman for Supervision Randal Quarles warned Thursday that widespread adoption of cryptocurrencies could undermine financial stability in the event of an economic downturn. “While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage,” Quarles said in his first formal speech since being sworn in in October. “Risk management can act as a mitigant, but if the central asset in a payment system cannot be predictably redeemed for the U.S. dollar at a stable exchange rate in times of adversity, the resulting price risk and potential liquidity and credit risk pose a large challenge for the system.”Quarles, speaking at a fintech conference sponsored by the Office of Financial Research and the Federal Reserve Bank of Cleveland, and held at the U.S. Treasury, said that digital currencies do hold the potential for innovation, particularly in the area of modernizing the payments system. But those considerations have to be tempered by an even more heightened need for the financial system to remain secure and resilient.  “It is appropriate not only to evaluate the potential of innovations to improve on existing services, but also to judge their ramifications for the safety and soundness of the institutions we supervise and for financial stability,” Quarles said. “Although many of these technologies are still nascent, it is important to have an eye on the potential financial stability implications both in the short- and long-run. Payment systems need to be resilient during adversity. Without that resilience, we could face a sudden loss of public confidence and the seizing up of systems and critical activities.” Cryptocurrencies, and particularly the distributed ledger — or blockchain — technology underlying them, have grown in adoption as the Fed has engaged in a multiyear evaluation of the national payments system, Quarles said. One of the takeaways from that examination has been that payments changes occur gradually, and can be “measured in decades, not years.”

Is Bitcoin A Speculative Bubble? - As near as I can tell there are only two other cryptocurrencies that have any relation to the real world out of the multitude of crytpos. They are etherium and ripple. The first has been a matter of much speculation itself, given its potential for writing contracts, giving it a serious possibility of much longer use and actual usefulness in the real world. This may yet occur, although for its future it would probaby be better for it if it could be bought directly with cash/dollars from the real world rather than having to use the horribly socially inefficient bitcoin, a bad example of first mover advantage, or perhaps the ultimate proof that the first mover should be sent to last.  Which gets us to the quiet and most obscure member of the crypto world, ripple. This cryptocurrency, which is the hardest to buy of them all, is probably the one with the most serious actual real world use, and thus possibly providing a real foundation for bitcoin to have a fundamental, although I confess at this point that I am not certain to what degree purchasing it does rely on using bitcoins. I know that as of fairly recently one had to use bitcoins to buy etherium, but I am not sure about ripple, which moves with bitcoin, but probably more weakly than any other of all the cryptocurrencies.  The source of its value is that has been adopted by a significant number of banks for their interbank transactions. This now appears to be firmly established, not to go away whatever happens to bitcoin or any of the other cryptocurrencies. Indeed, the underlying idea of blockchains is clearly a brilliant and useful forward movement in managing financial and economic transactions, assuming that is managed in a reasonable and efficient manner, without me remotely dealing with issues of transparency or legality. But it seems that at least some banks have decided to use ripple, which I understand uses a more efficient mining technology. So, there may well be a fundamental for bitcoin, despite what I understand to be the current consensus among smartass bitcoin traders. But, of course, that fundie is probably way below the current price, as if that matters at all.

Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says -- Nobel Prize-winning economist Joseph Stiglitz said “bitcoin is successful only because of its potential for circumvention, lack of oversight.”   “So it seems to me it ought to be outlawed,” Stiglitz said Wednesday in a Bloomberg Television interview with Francine Lacqua and Tom Keene. “It doesn’t serve any socially useful function.” Bitcoin surpassed $11,000 in a matter of hours after hitting the $10,000 milestone, taking this year’s price surge to almost 12-fold as buyers shrugged off increased warnings that the largest digital currency is an asset bubble.  “It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down,” Stiglitz added.

Bitcoin is a global supernova - When does BTC become too big to succeed? That’s the question. Not yet clearly but the rate of growth is so out of this world that it is already sight. BTC rose 4200% in 2017. If it repeats that in 2018 then its market capitalisation will be roughly $7 trillion. That will make it the fourth largest economy on earth. This is all pure conjecture, bullshit really, but it gives some notion of how ridiculous the phenomenon of the world’s first global pyramid scheme and bubble is. At that size, it is likely that were the value to crash, then it will destabilise the global economy. Especially so if the run-up is being driven by debt at the margin, which it almost certainly is. Global GDP is roughly $80 trillion. If BTC reached $7tr then crashed 90% then the asset, and possibly monetary, shock would be material. It would be the same size as wiping one third off the value of the US stock market though obviously more diffuse. And crash it will. If it reaches such sizes, BTC will be a threat to every bank and taxation regime on earth. Governments are dumb and slow but they’ll wake in fright when it’s big enough. Joe Stiglitz is exactly right: BTC is shaping as the stupidest thing that I have ever seen in global markets.

 Exit Sign - Kunstler - Shoeshine boys in airports ‘round the world must be whispering about Bitcoin as the crypto-currency coils upward to tickle the $10,000 line. Ethereum’s roaring up, too, along with most other cryptos, from Byteball Bytes to Tattoocoin (Limited Edition). Whatever else you think about it, this action is sending a message, perhaps several.One would be Get Rich Quick, of course. Eight months ago, you could have copped Bitcoin for a mere $1000, and around Labor Day it touched $5000, which seemed, well, figment-ish. In the last two weeks it went all out hockey-stick, doubling. To a certain sort of mind this must seem irresistible. The result: a good old-fashioned mania. Digital tulip bulbs.Another message probably goes something like duck-and cover. Some nervous nellies are seeking shelter in Bitcoin as they detect tremors in the more traditional markets creeping ever-higher to new records. To some degree, Bitcoin may be doing the job that gold used to do, providing the aura of a “safe haven” from a possible global financial mega-storm. The last time such an event came out nowhere (ha!) after the “permanent plateau” of 1929 collapsed, the government confiscated as much physical gold as it could get its paws on. So who wants to be there? (Echo answers….)  These days, the zeitgeist also points to new-and-improved government monkey business for shoving global populations into cashless monetary regimes where the authorities could monitor and control (and collect a vig on) all transactions — and there is the theory, at least, that Bitcoin’s block-chain computer math would be secure from any government’s clutches.

The Blockchain Is Bigger Than Any Bubble -- An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios -- and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud.”Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin -- blockchain, or distributed-ledger technology -- could be transformative.The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages.Tokens that are privately created -- "mined,” if you insist -- can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. Moreover, bitcoin has no fundamental value as an asset -- no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance -- a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes.All this said, the distributed-ledger technology that underlies bitcoin ispotentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications.Blockchain technology might also be used one day to produce new kinds ofcentral-bank money. Central-bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts.

Dallas Fed president: Stock market 'excesses' pose potential threat to economy - Concern over stock market values is growing at the Fed, with one official worrying that waiting too long to tighten policy could have more serious effects later.In an essay released Monday, Dallas Fed President Robert Kaplan warned about "excesses" in the economy, pointing specifically to stocks and the government debt. The S&P 500 market cap is at 135 percent of GDP, the highest since 1999-2000, just as the dot-com bubble was about to pop, the central banker said."I am aware that, as excesses build, we are more vulnerable to reversals which have the potential to cause a rapid tightening in financial conditions, which in turn, can lead to a slowing in economic activity," Kaplan wrote."Measures of stock market volatility are historically low. We have now gone 12 months without a 3 percent correction in the U.S. market.," he added. "This is extraordinarily unusual."His comments echoed those made at the Federal Open Market Committee's most recent policy meeting on Oct. 31-Nov. 1. Minutes from that session, released last week, showed members concerned about "imbalances" in the financial markets that ultimately could lead to a "sharp reversal" that would have substantial effects. Kaplan is a voting member on the FOMC, though he will not be in 2018. He will, however, still provide policy input, and indicated he is in favor of the Fed hiking rates "in the near future," part of what he hopes will be "gradual and patient" removal of the historically high level of accommodation the Fed has provided since the financial crisis.The market is pricing in a near-certainty of a rate hike at the committee's December meeting."I would like to avoid a situation where the FOMC is playing 'catch-up' in raising interest rates," he said.In addition to stocks, Kaplan pointed out that corporate and government debt levels have been rising rapidly.But he's less concerned with corporate America's balance sheet than he is with the government's $20.5 trillion in IOUs. Of that total, the public owes $14.9 trillion, which is about 75 percent of GDP.

Morgan Stanley Turns Apocalyptic On Credit: "A Cycle Turn Is Closer Than Many Believe" -- While many have repeatedly warned over the past year that the record gains in credit are simply too good to stay.  few are as bearish on credit as Morgan Stanley, which today issued ots 2018 US Credit Outlook which is, in a word, "dire." In the report titled "When the Levee Breaks" strategist Adam Richmond list the three biggest headwinds for credit as follows: "Fed policy should become a material headwind, markets seem very late cycle, and valuations look extremely rich" and details each below:An unprecedented central bank unwind... We think there is way too much complacency regarding what is a notable and growing shift in central bank policy globally. Remember, monetary policy has been massive in this cycle, and extremely supportive for credit markets. The Fed is now tightening in an untested way, through the balance sheet, while also pushing rates near restrictive territory. Markets expect a seamless unwind. We do not....with markets late cycle, and very dependent on ultra-easy liquidity... It is not a coincidence that fundamental problems are becoming more apparent in one sector after the next, as the Fed withdraws liquidity. In fact, we see late-cycle risks popping up all over the place, and as is often the case near a top, these risks are mistakenly (we think) being rationalized as purely 'idiosyncratic' problems. Defaults should remain low in 2018, but that is expected. Credit markets anticipate defaults one year ahead of time, and we think a cycle turn is closer than many believe. ...and valuations very rich: Spreads are near all-time tights, adjusting for the quality deterioration in the indices over time. Yes, the technicals have been strong, but that may change as the Fed's balance sheet shrinks faster. We note, a recession is not necessary to see negative excess returns, especially in the second half of a cycle, and particularly late in a Fed tightening cycle. Credit markets have not experienced three straight years of positive excess returns in over 20 years.

You're Just Not Prepared For What's Coming -- Chris Martenson - I hate to break it to you, but chances are you're just not prepared for what’s coming. Not even close.  Don't take it personally. I'm simply playing the odds. After spending more than a decade warning people all over the world about the futility of pursuing infinite exponential economic growth on a finite planet, I can tell you this: very few are even aware of the nature of our predicament. An even smaller subset is either physically or financially ready for the sort of future barreling down on us. Even fewer are mentally prepared for it.  And make no mistake: it's the mental and emotional preparation that matters the most. If you can't cope with adversity and uncertainty, you're going to be toast in the coming years. Those of us intending to persevere need to start by looking unflinchingly at the data, and then allowing time to let it sink in.  Change is coming – which isn't a problem in and of itself. But it's pace is likely to be. Rapid change is difficult for humans to process.  Those frightened by today's over-inflated asset prices fear how quickly the current bubbles throughout our financial markets will deflate/implode. Who knows when they'll pop?  What will the eventual trigger(s) be? All we know for sure is that every bubble in history inevitably found its pin. These bubbles – blown by central bankers serially addicted to creating them (and then riding to the rescue to fix them) – are the largest in all of history. That means they're going to be the most destructive in history when they finally let go.Millions of households will lose trillions of dollars in net worth. Jobs will evaporate, causing the tens of millions of families living paycheck to paycheck serious harm.These are the kind of painful consequences central bank follies result in. They're particularly regrettable because they could have been completely avoided if only we’d taken our medicine during the last crisis back in 2008.  But we didn't. We let the Federal Reserve --the instiution largely responsible for creating the Great Financial Crisis -- conspire with its brethern central banks to 'paper over' our problems. So now we are at the apex of the most incredible nest of financial bubbles in all of human history.

English or Mulvaney at the CFPB? Time for quo warranto! - Who is the acting director of the Consumer Financial Protection Bureau? That might seem to be a straightforward question, along the lines of “Who was buried in Grant’s Tomb?” It is instead a matter of hot debate. This post is not about who the acting director is, but about how the question could be decided. Many people assume that we would have to wait until some regulatory action is taken (either by Leandra English or Mick Mulvaney), which could then be challenged on the basis of invalid appointment. Other commentators have suggested that if one claimant isn’t paid a salary, there could be a suit for the lost wages. Enter the writ of quo warranto. This is an old prerogative writ that “came to be used as a means of determining which of two claimants was entitled to an office.” Newman v. United States ex rel. Frizzell, 238 U.S. 537, 544 (1915). What the writ of quo warranto does is allow immediate action on the question of who holds the office, without waiting for any regulatory moves. The common law of quo warranto is modified by statute for the District of Columbia:

  • D.C. Code Ann. § 16-3501. Persons against whom issued; civil action. A quo warranto may be issued from the United States District Court for the District of Columbia in the name of the United States against a person who within the District of Columbia usurps, intrudes into, or unlawfully holds or exercises, a franchise conferred by the United States or a public office of the United States, civil or military. The proceedings shall be deemed a civil action.
  • D.C. Code Ann. § 16-3502. Parties who may institute; ex rel. proceedings. The Attorney General of the United States or the United States attorney may institute a proceeding pursuant to this subchapter on his own motion or on the relation of a third person. The writ may not be issued on the relation of a third person except by leave of the court, to be applied for by the relator, by a petition duly verified setting forth the grounds of the application, or until the relator files a bond with sufficient surety, to be approved by the clerk of the court, in such penalty as the court prescribes, conditioned on the payment by him of all costs incurred in the prosecution of the writ if costs are not recovered from and paid by the defendant.

The bottom line: the question could be resolved through a quo warranto action brought by Attorney General Jeff Sessions or U.S. Attorney Jessie K. Liu. There is no need to wait, as some commentators have surmised, for one of the two claimants to take some official action that could be challenged in court.

Top CFPB Official Sues Trump Administration As Showdown Over Agency Heats Up - The deputy director of the Consumer Financial Protection Bureau sued the Trump administration on Sunday to block the president’s appointment of Mick Mulvaney as interim director of the agency. Leandra English filed suit in U.S. District Court for the District of Columbia against President Donald Trump and Mulvaney, who currently serves as the director of the Office of Management and Budget. English was appointed deputy director of the CFPB on Friday after the agency’s director, Richard Cordray, stepped down, and says her role mandates she serve as acting director until Congress appoints Cordray’s replacement.“As the rightful acting director of the Bureau, Ms. English brings this action against President Trump and Mr. Mulvaney seeking a declaratory judgment and, on an emergency basis, a temporary restraining order to prevent the defendants from appointing, causing the appointment of, recognizing the appointment of, or acting on the appointment of an acting director of the Consumer Financial Protection Bureau via any mechanism other than that provided for [by the law],” the suit reads.The White House has asserted it has the authority to name its own interim director, all but assuring a tussle at the Wall Street watchdog on Monday with two separate factions contending they run the agency. The Justice Department’s Office of Legal Counsel issued an opinion on Saturday supporting Mulvaney’s appointment.

CFPB's English sues Trump administration to block Mulvaney appointment -- Leandra English, the deputy director of the Consumer Financial Protection Bureau, sued the Trump administration late Sunday to block the appointment of Office of Management and Budget Director Mick Mulvaney as interim director of the consumer agency.The lawsuit was filed by English herself, not the CFPB, which took the official position that Mulvaney is in charge. The agency's general counsel, Mary McLeod, drafted a memo late Sunday supporting the Trump administration's position. "I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB," McLeod wrote. The lawsuit , English v. Trump, was filed in the U.S. District Court for the District of Columbia, seeking an injunction ordering President Trump to halt the Mulvaney appointment.  English was appointed deputy director on Friday as CFPB Director Richard Cordray stepped down, a role that would serve as acting director in the absence of a Senate-confirmed leader. But hours later, President Trump named Mulvaney as the acting director, leaving it unclear which of the two was the lawful head of the CFPB.  English has been in the unenviable position of having to decide whether she will sue the president on what would be just her second day in the job. The lawsuit seeks a quick judgment from the court as well as a temporary block to Mulvaney's appointment. American Banker reported earlier Sunday that a lawsuit by English was in the offing.   In a statement, Sarah Huckabee Sanders, the White House press secretary, said "the law is clear: Director Mulvaney is the acting director of the CFPB." She specifically cited the memo by McLeod that said the Mulvaney appointment was legitimate.  Still, the issue is likely to remain in flux until a court makes a decision.

Consumer bureau’s top lawyer sides with Trump in leadership clash - Politico - The Consumer Financial Protection Bureau's top lawyer sided with the Justice Department over President Donald Trump's appointment of Mick Mulvaney to lead the CFPB as a leadership battle over the controversial watchdog agency escalated.In a memorandum obtained by POLITICO, CFPB general counsel Mary McLeod said Trump had the legal authority to name an acting director to the bureau under the Federal Vacancies Reform Act. "It is my legal opinion that the president possesses the authority to designate an acting director for the bureau," McLeod wrote in the Nov. 25 memo to the CFPB leadership team. "I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB."  Yet even as McLeod's memo was circulating, Leandra English, former CFPB Director Richard Cordray's choice to serve as acting director of the watchdog agency, sued the Trump administration in U.S District Court in Washington.  In her lawsuit filed late Sunday, English named Trump and Mulvaney as defendants and asked the court to establish her authority as acting director.  "Ms. English has a clear entitlement to the position of acting director of the CFPB," the filing claims. "The President's purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful."

Leadership clash at CFPB continues as two claim mantle — Two people are now claiming to be the rightful leader of the Consumer Financial Protection Bureau. CFPB Director Richard Cordray's final act to appoint his own interim successor before stepping down — Leandra English, the agency's chief of staff — came hours before the Trump administration named Office of Management and Budget Director Mick Mulvaney as the temporary director. It is now unclear who is legally entitled to the job, and both appear likely to show up Monday to claim the mantle. For its part, the Trump administration insisted Saturday that Mulvaney was in charge, claiming that English, now the deputy director of CFPB, works for him. “Director Mulvaney will be the acting director and will take up his office at the CFPB and begin overseeing the CFPB” on Monday, a senior administration official said on a call with reporters. Another administration official added that, “We don’t have any reason to think that anything out of the ordinary course will happen.” But Democrats were disputing that claim, arguing that the Trump administration was attempting to unlawfully steal leadership of the CFPB while a permanent successor is nominated and confirmed. "The Dodd-Frank Act is clear: if there is a CFPB director vacancy, the deputy director becomes acting director. President Trump can’t override that," Sen. Elizabeth Warren, D-Mass., wrote on Twitter Friday night. Ultimately, the issue will likely go to the courts. "There's going to be a court battle, and it has the potential to embroil the Trump administration in another difficult court challenge," At issue is the language of Dodd-Frank, which says that the bureau's deputy director will serve as acting CFPB director in the "absence or unavailability of the director." That is different from the earlier Federal Vacancies Act, which generally gives the president the power to appoint any Senate-confirmed individual to the temporary leadership of an independent agency. 

 CFPB leadership case assigned to Trump-appointed judge - A judge recently appointed by President Trump will hear a case deciding the leadership of the Consumer Financial Protection Bureau. Timothy J. Kelly, who was confirmed to the U.S. District Court for the District of Columbia in September, was assigned Monday to decide whether Leandra English, the CFPB's deputy director, or Mick Mulvaney, the Office of Management and Budget director appointed by President Trump, is the interim head of the CFPB. English filed suit late Sunday in an attempt to block Mulvaney from taking office. Mulvaney went to the CFPB on Monday carrying donuts for senior staff, and quickly ordered them to disregard any orders from English, who sent a note early Monday to staff as "acting director." "We are just sort of here running the agency today as the acting director," Mulvaney told an American Banker reporter outside the CFPB in a brief interview on Monday. "You saw that we responded this morning to an email that Ms. English put out. We simply sent an email out that said, 'Look, we don't consider her the acting director and you should disregard her instructions in an official capacity.' " In his email to staff, Mulvaney said employees must inform the CFPB's general counsel if they received any "additional communication from [English] in any form, related in any way to the function of her actual or presumed official duties." "We simply sent an email out that said, 'Look, we don't consider her the acting director and you should disregard her instructions in an official capacity,' " said OMB Director Mick Mulvaney, who has been appointed acting CFPB director by the Trump administration. Bloomberg News He also apologized "for this being the very first thing you hear from me." English, meanwhile, has been talking to allies on Capitol Hill and was expected to meet later on Monday with Sen. Elizabeth Warren, D-Mass., the founder of the CFPB. Some observers said Kelly could quickly squash English's effort, denying her request for a temporary restraining order against Mulvaney.

Trump Pick Wins Over CFPB Staffers With Coffee And Donuts -- The legal battle for control of the Consumer Financial Protection Bureau began in earnest Monday morning as Leandra English and Mick Mulvaney – Trump’s OMB director and his pick to lead the CFPD until a new director can be confirmed - have both asserted authority over the agency’s staff, something that is bound to create tremendous confusion until a federal district judge delivers a final ruling.Mulvaney arrived at the bureau’s Washington headquarters Monday morning carrying bags of donuts from Dunkin Donuts. Meanwhile, English sent an email to CFPB staff where she identified herself as the interim director of the agency, according to Reuters.An hour later, Mulvaney followed up with an email of his own, instructing staffers to “please disregard” English and inviting them to his office on the fourth floor for coffee and donuts. Apparently, Mulvaney’s free donuts were a hit with the CFPB staff...Donuts were a big hit at cfpb. Like they always are. @MickMulvaneyOMB pic.twitter.com/zgX5Y1Rlt3— john czwartacki (@CZ) November 27, 2017Mulvaney has already held at least one meeting with the agency’s senior staff... Per anonymous sources cited by Bloomberg, the tide seemed to be turning against English inside the agency as agency division heads alerted staff workers that they should follow theguidance written Nov. 25 by CFPB General Counsel Mary McLeod stating that Mulvaney was acting director.Still, legal experts claimed that McLeod’s guidance won’t be enough to resolve the dispute – something that will inevitably require a court ruling. “There is no way for this to get resolved short of court intervention,” said Alan Kaplinsky, a lawyer at Ballard Spahr who has represented big banks in lawsuits against the CFPB. “The CFPB will be paralyzed until we figure out who is in charge."

Mulvaney pledges 'dramatic' shift at CFPB, freezes rules and hiring --The Trump administration's pick as acting director of the Consumer Financial Protection Bureau said Monday that the agency would be "dramatically different" under new leadership, even as a federal judge declined to decide yet on the legality of the appointment. Mick Mulvaney, who is also the director of the Office of Management and Budget, said President Trump wanted him to "fix" the agency, ensuring it protected consumers without cutting off access to financial services. At the outset, he said he has instituted a 30-day hiring and policymaking freeze while he reviews all rules and guidance still pending before the agency. But he acknowledged some items already out the door, such as the final rule to restrict short-term lending, are beyond his purview to stop. Though he sounded almost reluctant about it at times in a press briefing with reporters, Mulvaney said the agency would continue operations as normal, but with a twist. "The agency will stay open," Mulvaney said. "Rumors that I will set the place on fire or blow it up or lock the doors are false. I’m a member of the executive branch of government. We execute the law." "That being said, the way we go about it, the way we enforce it, the way we interpret it, will be dramatically different under the current administration than it was under the last," Mulvaney said. "Anybody who thinks that a Trump administration's CFPB would be the same as the Obama administration's CFPB is being naive. Elections have consequences at every agency, and that includes the CFPB." His comments come as a legal battle continues to be waged over the legality of his appointment. Leandra English, the deputy director of the CFPB, filed suit late Sunday claiming that she, not Mulvaney, was the legal acting head of the bureau. District Judge Timothy J. Kelly held a hearing on the matter late Monday, but said the Trump administration needed more time to respond before he could issue a ruling. 

Trump-installed consumer agency head sets hiring freeze, halts new rules (Reuters) - The fight for control of the U.S. consumer watchdog agency intensified on Monday as Mick Mulvaney, President Donald Trump’s pick to run the Consumer Financial Protection Bureau (CFPB), imposed a hiring freeze and halted any new regulations. In a partisan showdown over the CFPB, which was created to crack down on predatory financial practices, Mulvaney is being sued by Leandra English, an Obama-era appointee to the agency who argues that she is the consumer bureau’s rightful leader. The conflict began on Friday when Richard Cordray, a Democrat appointed CFPB director by then-President Barack Obama, formally resigned and named English, his chief of staff, as acting director. Hours later, Trump named Mulvaney, the current director of the White House budget office, as temporary head of the CFPB. The Republican president has a right to name a permanent CFPB director, officials agree. There are dueling claims, however, about who gets to lead the agency in the meantime. Both sides presented their arguments during an emergency U.S. District Court hearing in Washington on Monday. Timothy Kelly, a Trump-appointed judge who is presiding over the case, said the issues raised were “extremely important and complicated.” The judge as well as the two sides said they hoped to see the case decided within the next few days. The next step is for the Trump administration to submit its response to English’s suit. The fight to control the 1,600-employee agency lays bare deep divisions between Republicans and Democrats over how to regulate Wall Street and protect consumers, following the 2007-2009 financial crisis that cost taxpayers $700 billion in bailouts. Republicans loathe the CFPB, saying it wields too much power and burdens banks and other lenders with unnecessary red tape. 

At CFPB, bitter feelings about final Cordray maneuver - Employees at the Consumer Financial Protection Bureau are privately questioning why outgoing director Richard Cordray abruptly tapped a 34-year-old chief of staff with no enforcement, supervisory or legal experience to head the embattled agency after he resigned. Many were caught off guard when Cordray handed the reins to Leandra English by naming her deputy director as he stepped down on Friday. The White House also appeared surprised, scrambling to officially name Mick Mulvaney, the director of the Office of Management and Budget, as interim director. English and Mulvaney have been engaged in a legal standoff since Sunday night over control of the bureau.  In interviews, several current and former CFPB officials, most of whom did not want to speak on the record, were upset by Cordray's eleventh-hour move during a holiday weekend, typically a time when the only news that is released is the kind people want to bury. They were also angry at his choice, arguing that English was not experienced enough for the job. "It was shocking to people that English was selected," said one former CFPB employee, who spoke on the condition of anonymity. "Many people were questioning Leandra's qualifications and her experience. It's symptomatic of the environment at the CFPB where they just handpick whomever they want and this cronyism and favoritism leads to discrimination."  Little is known about English. Previously, she worked as a principal deputy chief of staff at the Office of Personnel Management, the chief of staff and senior adviser to the deputy director for management at OMB, and was a member of the CFPB implementation team at the Treasury Department during the Obama administration. But she'd only formally served as the agency's chief of staff since January, and has never been subjected to the kind of public scrutiny that comes from holding a top-level post.  One key question was why Cordray passed over David Silberman, who had served as acting deputy director for nearly two years, in naming a full-time deputy director. Silberman kept his job as associate director of research, markets and regulations.

Judge rules against CFPB's English, says Mulvaney in charge - — Office of Management and Budget Director Mick Mulvaney is the legal interim head of the Consumer Financial Protection Bureau, a federal judge declared on Tuesday. District Judge Timothy J. Kelly declined to grant a temporary restraining order against Mulvaney as part of a lawsuit by CFPB Deputy Director Leandra English that claimed she was the legal acting director under the Dodd-Frank Act. She argued in part that he was too close to the Trump administration as a Cabinet official. "There's nothing in the statute that I can find that will prevent Mr. Mulvaney from holding both positions," Kelly said. The case is not necessarily over. Deepak Gupta, English's lawyer, told reporters after the ruling that she would appeal. "Everyone understands this court is not the final stop. This judge does not have the final word on what happens in this controversy and I think he understands that,” said Gupta. Still, the decision is a significant, and perhaps ultimately fatal, blow to English's efforts to assert control. "It's possible for her to appeal, but it would be difficult to get it granted and she would not have any more claim to the acting directorship," said R. Andrew Arculin, a partner at Venable. "She would have to convince the appeals court that the judge was wrong and that it needs to be resolved now, and that's a higher burden. It's pretty difficult to get the court to hear it."  Since early Monday morning, Mulvaney has acted as head of the bureau, arriving with doughnuts and meeting with senior staff. He even started his own Twitter account on Tuesday, @CFPBDirector, making it clear he was in charge. In a press conference on Monday, Mulvaney pledged "dramatic" changes in how the bureau is run, though he denied rumors he was there to shut the place down.

Employees dish on the chaos gripping America's top consumer watchdog agency -- Officials at the Consumer Financial Protection Bureau say they're confused, worried about their employment, and uncertain about the future after a messy battle between the Trump administration and the agency's recently departed director, Richard Cordray, led to two people claiming to be its acting director. Some officials told Business Insider that Cordray had the proper authority to name his deputy, Leandra English, as his successor. But others said Cordray overstepped and pulled a political stunt on his way out the door, making a maneuver that the CFPB's general counsel had alerted him would not supersede the president's authority to name a successor. The skirmish over the acting director role centers on language in the 2010 Dodd-Frank Act and whether it usurps the 1998 Federal Vacancies Reform Act. President Donald Trump and his allies say the 1998 law gives him the authority to make the appointment rather than Cordray, who was nominated by President Barack Obama to head the independent agency. The general counsel for the CFPB sided with the Trump administration on the matter. "What the media doesn't know is that our legal department has been looking into this for a long, long time," one CFPB official told Business Insider. "And they have already said and told the former director that they believe the president has the authority to appoint an interim director in spite of the Dodd-Frank Act's language. So the whole thing, frankly, is a political stunt, and all of the people are actually quite angry because they think this is nothing but political.  "Frankly, at the end of the day, who's going to benefit from this whole thing, and who's going to be the biggest loser?" they continued. "The biggest loser will be the people who actually work at the bureau."

Winners and losers of CFPB's leadership showdown --  A dramatic legal fight over leadership of the Consumer Financial Protection Bureau all but ended on Tuesday after a federal judge ruled that Office of Management and Budget Director Mick Mulvaney is the legal interim head of the agency. District Judge Timothy J. Kelly blocked CFPB Deputy Director Leandra English's request for a temporary restraining order, rejecting former CFPB Richard Cordray's pick to lead the agency and upholding President Trump's interim choice.Though English is expected to appeal, her chances of success are slim, according to most legal experts.While the battle is nearly finished, however, the impact may reverberate for some time to come. Democrats obviously hoped to keep control of the agency for a few months longer. That now appears highly unlikely with Mulvaney in control for the foreseeable future. Moreover, their ability to stop President Trump from choosing a permanent successor is virtually nonexistent since Senate rules were changed to prevent filibusters of nominees. Republicans, meanwhile, could not have hoped for a clearer way to paint the CFPB as out of control. They've long argued that Cordray could act as he pleased, a position that appeared confirmed when he selected his own temporary successor who subsequently sued the president of the United States. "If you were to dream up what fact pattern would fit [House Financial Services Committee Chairman Jeb Hensarling's] insane 'unaccountable bureaucracy' meme, I’m pretty sure this would be it," said one former CFPB employee who is sympathetic to the agency but critical of the past week's events.  To many, the entire episode felt like a stunt, one that reflected badly on those trying to implement it and helping longtime critics of the agency in the process.  Following are the winners and losers of the so-called #CFPBDebacle:  (8 Bloomberg NewsSlides)

Voodoo Too: The GOP Addiction to Financial Deregulation - Paul Krugman - Why has financial deregulation been, literally, such a bust? There are multiple, interacting reasons, all of which are well studied at this point. Banking is inherently vulnerable to self-fulfilling panic; if you guard against panic with explicit or implicit guarantees, you create moral hazard which must be contained via regulation. Beyond that, finance is an area where the risks of fraud, of scammers exploiting the limits of consumer understanding and rationality, are especially high. Very few people are in a position to assess the fine print of financial contracts, and the most deceptive, risky deals are sold to those least able to make that assessment. Hence Dodd-Frank, which made a limited but serious attempt to rein in some of the new risks that had arisen from deregulation and shadow banking, and which created the CFPB to help protect consumers from financial scams perpetrated, in many cases, by big financial institutions. And these measures have been successful: leverage and financial risks are down, and the Bureau has surprised even those of us who supported it with just how effective it has been, just how much positive influence it has had on the honesty and transparency of financial dealings. So naturally the GOP wants to tear it all down. On the right, all of the disasters brought on by deregulation were actually the fault of liberals, who somehow forced banks to make subprime loans to Those People, or maybe the Fed, which somehow forced lots of bad lending by failing to raise interest rates in the face of low inflation.And Republicans insist that the prudential regulations introduced after the terrible crisis of 2008 are holding the economy back, despite zero evidence to that effect.But evidence isn’t the point. Like faith in the magical powers of tax cuts, faith in the wondrous things that happen if you let bankers do whatever they want has become a free-floating ideology on the right, untethered to any kind of reality check. And of course it’s a very convenient faith from the point of view of financial industry types.So really the attack on the CFPB and the tax cut are part of the same story. They’re both about voodoo economics in the service of plutocracy.

Five big questions about Mulvaney-led CFPB - With leadership of the Consumer Financial Protection Bureau resolved by a federal court, the banking industry is eager to find out what interim head Mick Mulvaney plans to do once he gets his arms around the controversial agency. Mulvaney, who is also the director of the Office of Management and Budget, has pledged to change direction at the CFPB, focusing less on new rules and more on easing access to credit.  He has already instituted a 30-day hiring and policymaking freeze and is reviewing all rules and guidance, as well as pending enforcement actions and investigations. Though he has acknowledged that some final rules like the small-dollar payday lending rule are beyond his authority to change in the short-term, many in the industry believe otherwise and are gearing up to encourage him to change effective dates and reopen old rulemakings.  The task ahead for Mulvaney will not be easy or quick, however. "An administrative agency can't just start repealing rules that are in effect, and they can't ignore what Congress has instructed them to do," said Warren Traiger,a partner at Buckley Sander. "No one can just declare rules void, they need to go through the same rulemaking process to amend or negate what's out there, and that process has to withstand the standard of not being arbitrary and capricious." The mortgage industry in particular wants clearer guidance from the CFPB on a host of mortgage regulations mandated by the Dodd-Frank Act. The bureau is required to review some of its rules within five years after they take effect, which presents Mulvaney and the industry with an opportunity to change course. "There will be tweaks to the rules overall, and opportunities for modifications to adjust issues of concern for the industry," said Quyen Truong, a partner at Stroock & Stroock & Lavan, and a former CFPB assistant director and deputy general counsel. "Overall it would take some time before any major changes are made to the existing rules or new rules or guidelines are adopted. I don't think that there will be major actions right away, there will be gradual modifications." Following are five key questions now that Mulvaney is solidly in charge:

CFPB leadership shake-up leaves fintech borrowers vulnerable - With Richard Cordray stepping down as head of the Consumer Financial Protection Bureau and the agency poised to undergo significant changes from leadership installed by the Trump administration, consumer protection in America could take a hit — at a time when new, untested financial technology firms are in particular need of someone to look over their shoulder. Fintech lenders, especially marketplace lenders that match borrowers with investors through online platforms, can provide consumers with quicker access to small-value, short-term loans, often getting back to a borrower in a matter of hours — all done via smartphone or laptop. These firms are growing at a rapid pace. In the second quarter of 2017,  venture capitalists injected 38% more money into the fintech sector than they did the year before, and a number of fintech startups are now valued at over $1 billion.  Fintech lenders use a host of nontraditional factors to inform the lending decision — many of which might shock most American borrowers. Information such as where a borrower lives, what clubs he or she belongs to, and even someone’s text messaging habits and social media activity can all be used to make lending judgment calls. This information is processed by machine learning programs that utilize sophisticated underwriting algorithms to make credit decisions.  These big data innovations certainly have the potential to benefit the economy. But could the current setup also be too good to be true? It is hard to know the answer. We can’t be sure because so little is known about these lenders. They aren’t banks, so they don’t have a prudential federal regulator, and their underwriting programs are protected as trade secrets.

Would Trump’s CFPB Pick Mulvaney Back Consumers Or Payday Lenders? -- Demonstrators gathered outside the Consumer Financial Protection Bureau (CFPB) in Washington D.C.  Wednesday to protest President Trump’s decision to appoint White House budget director Mick Mulvaney to director of the agency. Critics of Mulvaney’s appointment, including Sen. Elizabeth Warren, D-MA, who attended the rally, argue that legally, the deputy director automatically takes over if the director leaves, so that deputy director Leandra English is the agency's rightful chief. The procedural issue has become so contentious because Mulvaney opponents fear he’s aligned with the financial services industry, which is vigorously opposed to new CFPB rules governing payday lending the agency instituted last month.  The CFPB was formed to protect consumers as part of the wide-ranging Dodd-Frank legislation that implemented new regulations on Wall Street after the financial crisis. One of industries the CFPB has sought to protect consumers from is the payday loan industry, whose members issue short term loans to consumers at exorbitant interest rates. Mulvaney’s record with the industry, including his comments at a 2014 Congressional hearing, shows a concern for lenders often described as predatory.  As a Congressman, Mulvaney accepted $55,500 in contributions from payday lenders during his four successful runs for Congress, including $26,600 during the 2016 election cycle,  according to the National Institute on Money in State Politics. Before he was tapped to lead President Donald Trump’s Office of Budget Management, Mulvaney took $115,200 from the securities and investment industry, and another $96,564 from the insurance industry in the 2016 cycle, both more than any other industry, according to the Center for Responsive Politics. This record, along with comments Mulvaney made indicating he would shutter the agency if given the opportunity, has led critics to question whether Mulvaney’s priority will be consumers — or the companies the agency is responsible for regulating. In a 2014 hearing, then congressman Mulvaney submitted on-the-record comments for CFPB director Richard Cordray, who recently resigned to run for governor of Ohio as a Democrat. Prefacing a question to Cordray on “payday loans” and “certain types of installment loans,” Mulvaney’s comments suggest a deference to payday lenders. Citing a Philadelphia Federal Reserve Bank working paper on payday lenders, Mulvaney also asked Cordray how the CFPB would "ensure that there is a balance between strong consumer protection and creditor rights?"

House lawmakers introduce bipartisan bill to overturn CFPB’s payday rule -- A bipartisan group of lawmakers on Friday introduced legislation to repeal a rule from the Consumer Financial Protection Bureau imposing new restrictions on small-dollar loans.  The bill would use the Congressional Review Act to overturn the payday rule, a procedure that allows Congress to overturn agency regulations with a majority vote. It’s the same playbook used by lawmakers in October to overturn the CFPB’s controversial rule banning mandatory arbitration clauses in financial contracts.   The CFPB finalized its long-awaited rule on payday lending in early October. The rule imposes new underwriting requirements on short-term, high-interest loans with terms under 45 days.  While the rule was designed to curb high-cost lending to cash-strapped consumers, critics including House Financial Services Chairman Jeb Hensarling, R-Texas, have argued that it restricts access to credit for those who need it. “Once again we see powerful Washington elites using the guise of ‘consumer protection’ to actually harm consumers and make life harder for lower and moderate income Americans who may need a short-term loan to keep their utilities from being cut off or to keep their car on the road so they can get to work,” Hensarling said in a committee press release announcing the Congressional Review Act legislation.  After the payday rule was finalized in October, it was widely expected that Republicans would attempt to overturn it. It’s notable, though, that the effort has attracted bipartisan support in the House. The bill, as introduced, is sponsored by Rep. Dennis Ross, R-Fla., and co-sponsored by the following members: Reps. Alcee Hastings, D-Fla.; Tom Graves, R-Ga.; Henry Cueller, D-Texas; Steve Stivers, R-Ohio; and Collin Peterson, D-Minn.  Passage in the Senate, however, may be a much heavier lift. The chamber’s vote to overturn the arbitration rule in late October came down to the wire, forcing Republicans to call in Vice President Mike Pence to cast the tie-breaking vote.

Dodd, Frank reunite to protest CFPB leadership change - While most lawyers have declared the leadership battle at the Consumer Financial Protection Bureau all but over, former lawmakers Barney Frank and Chris Dodd teamed up again Thursday to make a last-minute protest to the Trump administration's recent installation of an acting director at the agency.  The former heads of the House and Senate banking committees argued that the Dodd-Frank Act clearly intended to allow the CFPB's deputy director to serve as acting director after the full-time head of the agency departed.  They said a federal judge erred when he ruled this week that the 2010 financial reform law did not take precedence over the Federal Vacancies Reform Act, which broadly allows a president to appoint any Senate-confirmed appointee as interim head of an independent agency."This was a choice we made very deliberately and the notion that that was just a suggestion on our part and that the president can pick or choose [a CFPB successor] makes no sense," Frank said on a conference call with reporters.Dodd said that under the law, "the president cannot just create a director." "We had the choice of keeping the Vacancies Act, but rejected that choice and wrote the language that was in the bill. We did not just call the CFPB an independent agency, we created an independent agency," Dodd said. The two sharply criticized former colleague Mick Mulvaney, the director of the Office of Management and Budget, who became interim director of the CFPB on Tuesday after a federal judge declined to grant a temporary restraining order in hearing a lawsuit by CFPB Deputy Director Leandra English. "He was put there to shut the agency down and keep it from being effective," Frank said. "They couldn't get a nominee confirmed who would be as negative at the agency as Mulvaney is. As long as he is the director, the agency will do almost nothing."

Trump’s Fateful Mistake on Consumer Financial Protection – Simon Johnson - The founding myth of US President Donald Trump’s administration is that it will look out for ordinary Americans, and that cutting taxes on companies, deregulating finance, and rolling back environmental protections will achieve that. None of this makes any sense, and the administration’s claims that these measures will spur an economic boom – with annual growth accelerating from 2% to 3% – are pure fantasy.  American voters are beginning to figure this out – as indicated byrecent election results in Virginia and elsewhere. But it will take a while for the falsity of Trump’s promises to be exposed, partly because many macroeconomic changes are complex and become apparent (or don’t) over time.Now, however, Trump has made a major tactical mistake. By seizing control of the Consumer Financial Protection Bureau (CFPB), and placing an ideological extremist in charge, he has brought to the fore the deepest flaws in his administration’s founding myth.The CFPB was established by the 2010 Dodd-Frank financial-reform legislation to do exactly what its name implies: protect consumers in their various financial transactions. A new agency was needed because existing regulators, including the Board of Governors of the Federal Reserve System, had manifestly and repeatedly failed to protect consumers from abuses, such as deceptive and fraudulent mortgage-lending practices, some of which were at the heart of what went wrong in 2007-08.  And the CFPB has done exactly what Congress designed it to do. So far, the Bureau has arranged for the return of almost $12 billion to 29 million consumers. At the same time, banks are reporting record profits – on the order of $171 billion, according to the latest data. The CFPB is good for business, or at least for the straightforward, transparent business of traditional lending.

  TCPA compliance, and lawsuits, rest on consumer consent --The Telephone Consumer Protection Act broadly regulates how businesses may communicate with their customers, prohibiting, for example, using an autodialer to call or text individuals' cell phones without proper consent. Between 2010 and 2016, actions under the TCPA increased 1,272% according to WebRecon. These suits can have astronomical damages ($280 million in the case of Dish Network).Mortgage servicers should be especially concerned by the rise in TCPA litigation because one of their primary means of conducting business is to call customers, often with an autodialer. When litigating under the TCPA, few issues have a greater impact on the outcome of the case than whether consent to call exists, including how consent can be revoked.Ever since the Federal Communications Commission's July 10, 2015 ruling, "[c]onsumers have a right to revoke consent, using any reasonable method including orally or in writing." While an appeal of the FCC's 2015 ruling is pending before the U.S. Court of Appeals for the District of Columbia Circuit (and has been fully briefed and ripe for decision for over a year), the "any reasonable means" standard has created an onerous landscape on all businesses subject to the TCPA. However, two decisions handed down in the second half of this year have greatly impacted the ability of consumers to revoke consent by "any reasonable means."The Second Circuit Court of Appeals, in Reyes v. Lincoln Automotive Financial Services, held that contractual consent — once given — cannot be unilaterally revoked. That said, Reyes is not panacea for TCPA liability. First, at present, it is confined to the Second Circuit (though Second Circuit has doubled down on the ruling, denying a petition to rehear the case on Oct. 20, 2017). Second, it applies to businesses who have a contractual relationship with the plaintiff. Third, plaintiffs may argue — like they would in fighting arbitration — that the call must relate to or fall within the scope of the contract and the consent provision under which a business seeks to invoke Reyes. Fourth, certain scenarios, like debt collection, may fall outside of Reyes.

Fifth Third's McWilliams tapped as next FDIC chair — Jelena McWilliams, the chief legal officer for Fifth Third Bancorp, will be nominated as the next chair of the Federal Deposit Insurance Corp., the White House said late Thursday. McWilliams' name surfaced months ago as the Trump administration's pick, but was not official until now. Little is known about McWilliams' views on regulatory policy, but she was chief counsel for former Senate Banking Committee Chairman Richard Shelby, R-Ala., between 2015 and 2017 and previously worked for current chairman Mike Crapo, R-Idaho. From 2007 to 2010, McWilliams served as an attorney at the Federal Reserve Board of Governors. Sources describe her as extremely knowledgeable. As a Senate staffer, she was known to carry an annotated copy of the Dodd-Frank Act bound in a small book. At 43, some industry sources are hopeful she will be more open to recent innovations in the financial space. McWilliams would succeed FDIC Chair Martin Gruenberg, whose term expired this month. Gruenberg is eligible to remain on the FDIC board but has not yet said if he will retire once his successor as chair is confirmed. Some bankers are hopeful McWilliams will steer the FDIC in a different direction on small-dollar loans. Fifth Third endorsed a plan proposed by the Pew Charitable Trusts to offer such loans, but it did not receive sign off from federal banking regulators. McWilliams' nomination marks the third top banking regulator named by President Trump. Trump recently selected Federal Reserve Board Gov. Jerome Powell to chair the central bank, and his choice of comptroller of the currency, Joseph Otting, was sworn in this week at the agency. 

Banks resist pressure to raise rates, but for how long? - Online banks have been aggressively raising the rates they pay on consumer deposits, and that is putting pressure on mainstream banks to consider following suit or risk losing valuable deposits to their more nimble competitors.  A recent survey of 100 banks conducted by MoneyRates.com found that online banks such as Ally Bank, Goldman Sachs’ GS Bank and Sallie Mae Bank are paying significantly higher rates on savings and money market accounts than their brick-and-mortar counterparts. All had increased their rates during the third quarter, after the Federal Reserve raised benchmark interest rates in June — the third rate hike since late December.The question of timing a hike in deposit rates is critical for traditional banks. If banks raise rates too soon, before their existing loans reprice to higher rates, their net interest margins could shrink and profits could suffer. But if banks wait too long, they run the risk of losing deposits to online banks that are paying better rates. The average rate for savings and money market accounts at online banks stood at 1.18% in September, compared with 0.075% at traditional banks, according to a report released by Fitch Ratings early Wednesday. Fitch estimated that if all U.S. banks with at least $50 billion of assets raised their average deposit rate to 0.75% — or 10 times what they are paying now — their total quarterly profits would decline by nearly 11% based on third-quarter earnings data. If the average rate was increased to 1.18%, their collective profits would fall by 17%.

Congress should intervene to let more banks make small-dollar loans  -- When it comes to short-term, small-dollar loans, banks are between a rock and a hard place. Consumers are demanding short-term credit, and officials such as former Consumer Financial Protection Bureau Director Richard Cordray have urged banks to meet this need. On the other hand, stringent regulation meant to shut down predatory lenders is understandably causing banks to hesitate about jumping into the market.  Many banks lack the technology to effectively underwrite these products. Partnerships with financial technology companies could be effective in helping banks meet both consumer and regulatory demands. But those partnerships continue to face a legal cloud. Thankfully Congress is considering adding a dose of needed clarity.  About 160 million Americans have nonprime credit scores or are credit invisible because they have no credit score at all. Most have incomes well above the poverty line, even above $100,000 a year, but they still cannot qualify for traditional loans. Lost jobs and mortgages in delinquency during the 2008-9 recession dented their credit scores. Or, take a recent college graduate with a bright career ahead but no credit history; he or she is not an attractive borrower to traditional creditors.  More Americans have incomes that swing month to month; coming up with even just $400 might be a challenge. Jobs tied to tourism, pay tied to tips or households where income earners may come and go all make for an uncertain income stream. Meanwhile, emergency expenses are a part of everyday life. Deposits for a first apartment, payments for higher education and moving costs require the same lump-sum payments as a medical emergency.Americans need credit to smooth out the bumps in their financial and personal lives. But since the crisis, a lot of folks have had to fend for themselves. Partnerships between banks and fintech firms could spur traditional institutions to get more involved. Unfortunately, a few court decisions have ignored decades of legal precedent and put a cloud over these ventures by raising questions over which party is the "True Lender" in these partnerships.

SBA launches program to let banks fast-track disaster relief --The Small Business Administration is turning to banks and other lenders for help in remedying a persistent gap in its response to natural disasters.  A new pilot program will allow existing participants in the SBA Express program to make government-guaranteed disaster loans to of up to $25,000 to small businesses. The loans will be limited to the lenders’ existing banking relationships. While the Express Bridge Loan program, which was rolled out last month, empowers banks to make disaster loans for six months after a federally declared disaster, SBA officials say the real value will come in the first two weeks.  An immediate cash infusion, even a modest one, “does a lot for a business that needs water, needs tarps and needs to get their employees some money to stay in the neighborhood until things can be sorted out,” said Dianna Seaborn, director of the SBA’s Office of Financial Assistance.  As restricted as it is, the program marks the first time the SBA has opened disaster lending up to banks. The agency began “brainstorming” and talking with lenders in the wake of Hurricane Irma, which devastated Puerto Rico and South Florida in September, Seaborn said. Puerto Rico was also hit hard by Hurricane Maria.Those discussions revealed that lenders had little desire to supplant the federal government’s primary role in disaster-relief efforts, but they were willing to play a more limited role “if it was easy enough and cost-effective,” Seaborn said. “All they needed was some streamlined processes,” Seaborn added. “When you underwrite a normal loan, there’s a lot more to it than when you’re looking at putting $25,000 out to someone who’s standing in front of a building with no roof.”

Banks need to know: How much CRA activity is enough? - The Community Reinvestment Act is 40 years old. But in terms of allocating a sufficient amount of resources to community reinvestment and development to comply with the law, banks still do not know the answer to the question: How much is enough? We have specific rules and guidelines for complying with almost every other regulatory policy mandate, but not CRA. I have researched CRA ratings over the last quarter century and have found that exam results are very discretionary. The prudential regulatory agencies may develop broad outlines on what constitutes sufficient reinvestment activities, but a “rogue examiner” can still make an arbitrary decision. Discretion allows examiners flexibility and job security, without the need to follow rules and guidelines. But it may also lead to banks receiving downgraded or adverse CRA ratings without examiners having to fully document them. CRA is in the spotlight again and ripe for a major revision. This is primarily a result of technological innovation and the banking interests of fintech firms helping to redefine deposit-taking facilities — which can now include your tablet and smartphone — and in turn the boundaries within which a financial institutions should be assessed for CRA. But CRA reform should also seek to establish a clearer minimum standard for the volume of CRA activities a bank must engage in in its assessment area. To be fair, subjective CRA ratings within the diverse U.S. banking system are not surprising. Banks located in areas with more active and vocal community groups will be under greater pressure to do more, and vice versa. Although all regulators follow the same CRA regs and exam procedures, some agencies are tougher than others. Even different regions of the same regulator can be tougher than others. According to data put out by the regulators, just 6% of the CRA ratings issued by the Federal Deposit Insurance Corp. since 2014 have been “Outstanding,” compared with 18% for the Office of the Comptroller of the Currency and 9% for all agencies.

Tax reform threatens to drain GSEs' dwindling capital — As the Senate launched into debate on tax reform Wednesday, a still-unanswered question was whether lawmakers will address a potentially huge negative consequence for Fannie Mae and Freddie Mac. Banks and other financial institutions have cheered the proposal to lower the corporate tax rate from 35% to 20%, and support of the bill by key Republicans has seemed to increase the odds of passage lately. Yet Fannie and Freddie observers are warning that a reduced rate will hit the government-sponsored enterprises hard. At issue are the GSEs' tax-deferred assets that rise and fall in value based on corporate tax rates. Some have warned that the plan could result in losses in the tens of billions. With the companies already required to sweep their profits to the government, write-downs of tax-deferred assets could make an already worrisome capital situation worse. Fannie and Freddie “will lose roughly a billion dollars for every percentage reduction in tax assets and would trigger a draw in that amount” from the Treasury if the corporate tax rate is lowered as proposed, said Michael Calhoun, president of the Center for Responsible Lending.GOP lawmakers, who have steered tax reform through without Democratic support or involvement, have been mostly mum on the issue. Yet the potential for the GSEs to suffer losses from the plan was raised by Federal Housing Finance Agency Director Mel Watt.  “We ... know that a short-term consequence of corporate tax reform would be a reduction in the value of the enterprises' deferred tax assets, which would result in short-term, non-credit- related losses to the Enterprises,” Watt told the Senate Banking Committee in May.  Lawmakers could potentially make a last-minute carve-out for the GSEs, but Gabriel said some lawmakers may welcome a draw as a catalyst to jumpstart broader housing finance reform discussions. Others might view the effects of tax reform on GSEs merely as a “quirky, unintended consequence,” he said.

Freddie Mac: Mortgage Serious Delinquency rate unchanged in October -- Freddie Mac reported that the Single-Family serious delinquency rate in October was at 0.86%, unchanged from 0.86% in September.  Freddie's rate is down from 1.03% in October 2016. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.  These are mortgage loans that are "three monthly payments or more past due or in foreclosure".   The recent slight increase in the delinquency rate was probably due to the hurricanes - and we might see a further increase over the next couple of months (These are serious delinquencies). After the hurricane bump, maybe the rate will decline another 0.2 to 0.3 percentage points or so to a cycle bottom, but this is pretty close to normal.

Fannie Mae: Mortgage Serious Delinquency rate unchanged in October  - Fannie Mae reported that the Single-Family Serious Delinquency rate was unchanged at 1.01% in October, from 1.01% in September. The serious delinquency rate is down from 1.21% in October 2016. These are mortgage loans that are "three monthly payments or more past due or in foreclosure".   The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.By vintage, for loans made in 2004 or earlier (4% of portfolio), 2.82% are seriously delinquent. For loans made in 2005 through 2008 (7% of portfolio), 5.91% are seriously delinquent, For recent loans, originated in 2009 through 2017 (89% of portfolio), only 0.33% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years. In the short term - over the next couple of months - the delinquency rate will probably increase slightly due to the hurricanes.  After the hurricane bump, maybe the rate will decline another 0.3 percentage points or so to a cycle bottom, but this is pretty close to normal.

Lawmakers pressed to save flood insurance program — Numerous business sectors are urging lawmakers to act quickly to extend the National Flood Insurance Program before a crucial deadline next week. The House passed a flood insurance reauthorization and reform bill Nov. 14 by a 237-189 vote. But the Senate Banking Committee has not acted on a flood insurance bill yet. Without an extension, the program will expire on Dec. 8. "Unless Congress acts now to extend authority before December 8, just eight legislative days away, the NFIP will no longer be able to issue or renew flood insurance policies across the U.S," Elizabeth Mendenhall, president of the National Association of Realtors, said in a Nov. 28 letter to lawmakers.

Tens of thousands displaced by Harvey still yearn for home - Three months after Hurricane Harvey, more than 47,000 flood victims are living in hotels and motels across Southeast Texas and beyond, a testament to the glacial pace of housing recovery.It likely will be well into the new year before many of these families find alternatives - and they, in many respects, are the lucky ones. Tens of thousands more have cobbled together their own temporary arrangements, living with relatives, in tents or on mattresses in barely habitable homes.In Houston, where local officials estimate the hurricane damaged more than 311,000 housing units - roughly a third of the housing stock - no one has moved into a trailer, secured an apartment or seen repair work begin through the state's interim housing programs. More permanent solutions could be years away. Hurricane Harvey scattered families to more than 1,500 hotels across the country.  Nearly 70,000 people displaced by the hurricane were staying in hotels paid for by FEMA as of Nov. 11, the most recent date for which detailed data was available. That figure has since dropped to more than 47,000, with most people staying in the Houston area. More than 887,000 people have requested financial assistance from FEMA to cope with Harvey, and the agency has approved more than 353,000 of those applications, doling out $1.4 billion in grants. That's an average of about $4,000 per family. That doesn't include the cost of the hotel program, which is slated to run through mid-January but has been extended several times - and probably will be again. FEMA's longer-term programs have been slow to reach residents.

Mortgage app fraud risk levels off, except in Texas and Florida  --  While the nationwide run-up in mortgage loan application defects appears to have slowed, instances of fraud remain on the rise in Texas and Florida. The First American Loan Application Defect index remained unchanged for the second straight month in October, but is up 22.1% from October 2016. Defect risk spiked between November 2016, when it hit an all-time low, and June. Loan application defects are indicators for mortgage fraud. "The surge in defect, fraud and misrepresentation risk that started a year ago has finally lost momentum," said First American's Chief Economist Mark Fleming in a press release. "The Loan Application Defect Index has either remained unchanged or declined in every month since July, and the index value is the same level as in the summer of 2015. Nationally, defect, fraud and misrepresentation risk has stabilized, but the local impact of recent natural disasters remains a concern." Texas' defect index rose 1.16% in October from September to 87, while in Florida it rose 3.26% to 95. In Houston, the index increased 5.62% between September and October, to 94. The only markets with a larger month-over-month increase in loan application defects were Lakeland, Fla., up 11.9%; Virginia Beach, Va., up 8.4%; Cape Coral, Fla., up 5.9%; and Orlando, up 5.9%. Miami had the third-highest risk index for metro areas, at 100, up 5.3% from September. It trailed only Little Rock, Ark., at 108 and Boise City, Idaho at 104. The state with the highest risk for loan application defects is Arkansas, with an index value of 105, followed by North Dakota at 103, Idaho at 102, Montana at 101 and Mississippi at 98. For purchase loans, the defect index was 90, unchanged from September, but up 12.5% from 80 one year ago. The defect risk for refinance mortgages decreased slightly, by 1.4% to 69 from 70 in September. This was an increase of 19% from October 2016's 58. 

MBA: Mortgage Applications Decrease in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey - Mortgage applications decreased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 24, 2017. This week’s results include an adjustment for the Thanksgiving holiday. ... The Refinance Index decreased 8 percent from the previous week to its lowest level since January 2017. The seasonally adjusted Purchase Index increased 2 percent from one week earlier to its highest level since September 2017. The unadjusted Purchase Index decreased 32 percent compared with the previous week and was 6 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 from the week prior at 4.20 percent, with points decreasing to 0.34 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall well below 4%.

Black Knight: House Price Index up 0.2% in September, Up 6.4% year-over-year -- Note: Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.From Black Knight: Black Knight Home Price Index: Monthly Appreciation Continues to Slow as U.S. Home Prices Gain 0.16 Percent in September; Year-Over-Year Growth Accelerates Slightly at 6.36 Percent
• The rate of monthly appreciation declined again in September, falling by one-third from August and marking the sixth consecutive month of slowing growth
• New York home prices led all states for the third month in a row, seeing a 1.08 percent rise in home prices from August
• Half of the nation’s 20 largest states and 17 of the largest metros saw prices fall from last month
• The number of states and metros setting new home price peaks continued to fall, with just six of the 20 largest states and 11 of the 40 largest metros hitting new highs in September </ br>Once again, this index is Not seasonally adjusted, and seasonally slow appreciation is expected (so don't read too much into slowing growth).  The year-over-year increase in this index has been about the same for the last year (close to 6% range).  Note also that house prices are above the bubble peak in nominal terms, but not in real terms (adjusted for inflation

Storms don't have much effect on Florida, Texas home prices -- Florida's home prices increased during September, while in Texas there was a minimal decline from August, a sign the major storms that hit both states had little impact on values. Nationwide, home values increased 0.16% from August to $282,000, which is another high point, according to Black Knight. But it is the sixth month in a row where the rate of appreciation slowed. There was a 6.36% year-over-year increase in home values during September. The annual appreciation rate for August was 6.24%, while the month-to-month increase was 0.24%. In Florida, there was a 0.87% month-to-month increase in home prices, the third largest gain among the states, behind only New York, up 1.09%, and Rhode Island, up 0.93%. Florida's median value was $248,000 for September. That was 16.26% below the market peak of $297,000 set in April 2006. New York reached a new peak price in September at $386,000. Prices in Texas fell by 0.05% compared with August, driven by a 0.23% decline in the Houston metro area, the part of the state hit hardest by Hurricane Harvey. But Houston's home values are still up by 2.69% from August 2016 and by 3.23% since the start of 2017. The September median value in Texas was $241,000, compared with the $242,000 peak value reached in August. The five states where home values decreased the most during September were Michigan, down 0.61%; North Dakota, down 0.54%; Illinois, down 0.38%; Connecticut, down 0.36%; and Iowa, down 0.34%. Prices in Detroit fell by 0.58% compared with August, the most among all metro areas. However, since the start of the year, prices in the area are up 10%. 

FHFA House Price Index: Index Up 1.4% in Q3  -- The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for September and Q3. Here is the opening of the report: – U.S. house prices rose 1.4 percent in the third quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.5 percent from the third quarter of 2016 to the third quarter of 2017. FHFA’s seasonally adjusted monthly index for September was up 0.3 percent from August. The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. FHFA has produced a video of highlights for this quarter. “With relatively favorable economic conditions and a continued shortage of housing supply, price increases in the third quarter were generally robust and widespread,” said Andrew Leventis, Deputy Chief Economist. “At some point, declining housing affordability should temper appreciation rates in some of the nation’s fastest appreciating markets, but our third quarter results show few signs of that.” [Link to report] The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.

Home Prices Rose 6.2% Year-over-Year in September -- With today's release of the September S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.5% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.2% for the last thirty months. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.  The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.5% from the previous month. The nonseasonally adjusted index was up 5.9% year-over-year. Investing.com had forecast a 0.4% MoM seasonally adjusted increase and 6.1% YoY nonseasonally adjusted for the 20-city series.Here is an excerpt of the analysis from today's Standard & Poor's press release. “Home prices continued to rise across the country with the S&P CoreLogic Case-Shiller National Index rising at the fastest annual rate since June 2014,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Home prices were higher in all 20 cities tracked by these indices compared to a year earlier; 16 cities saw annual price increases accelerate from last month. Strength continues to be concentrated in the west with Seattle, Las Vegas, San Diego and Portland seeing the largest gains. The smallest increases were in Atlanta, New York, Miami, Chicago and Washington. Eight cities have surpassed their pre-financial crisis peaks.” [Link to source] The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.

Case-Shiller: National House Price Index increased 6.2% year-over-year in September -- for September ("September" is a 3 month average of July, August and September prices).
This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: September S&P CoreLogic Case-Shiller National Home Price NSA Index Up 6.2% In Last 12 MonthsThe S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in September, up from 5.9% in the previous month. The 10-City Composite annual increase came in at 5.7%, up from 5.2% the previous month. The 20-City Composite posted a 6.2% year-over-year gain, up from 5.8% the previous month.  Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities. In September, Seattle led the way with a 12.9% year-over-year price increase, followed by Las Vegas with a 9.0% increase, and San Diego with an 8.2% increase. 13 cities reported greater price increases in the year ending September 2017 versus the year ending August 2017.... Before seasonal adjustment, the National Index posted a month-over-month gain of 0.4% in September. The 10-City and 20-City Composites reported increases of 0.5% and 0.4%, respectively. After seasonal adjustment, the National Index recorded a 0.7% month-over-month increase in September. The 10-City and 20-City Composites posted 0.6% and 0.5% month-over-month increases, respectively. 15 of 20 cities reported increases in September before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment. “Home prices continued to rise across the country with the S&P CoreLogic Case-Shiller National Index rising at the fastest annual rate since June 2014,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Home prices were higher in all 20 cities tracked by these indices compared to a year earlier; 16 cities saw annual price increases accelerate from last month. Strength continues to be concentrated in the west with Seattle, Las Vegas, San Diego and Portland seeing the largest gains. The smallest increases were in Atlanta, New York, Miami, Chicago and Washington. Eight cities have surpassed their pre-financial crisis peaks.”

 US Home Prices Surge At Fastest Pace Since July 2014 - As the latest housing data shows an uptick in sales, Case-Shiller's 20-City Composite index surged 6.19% YoY in September - the fastest rate of gain since July 2014.As Bloomberg notes, the residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices. Eight cities have surpassed their peaks from before the financial crisis, according to the report. All 20 cities in the index showed year-over-year gains, led by a 12.9 percent increase in Seattle and a 9 percent advance in Las Vegas (slowest gains in Washington area at 3.1 percent, Chicago at 3.9 percent) In the past few years, growth in property values has been consistently outpacing wage gains, crimping affordability for younger, first-time buyers. That could eventually become a headwind to faster price appreciation. For now, though, rising property values are also helping to boost home equity and support consumer spending, the biggest part of the economy.  “Most economic indicators suggest that home prices can see further gains,” David Blitzer, chairman of the S&P index committee, said in a statement. “One dark cloud for housing is affordability - rising prices mean that some people will be squeezed out of the market.”

Real House Prices and Price-to-Rent Ratio in September - the Case-Shiller release this morning, the seasonally adjusted National Index (SA), was reported as being 5.1% above the previous bubble peak. However, in real terms, the National index (SA) is still about 12.2% below the bubble peak (and historically there has been an upward slope to real house prices). The year-over-year increase in prices is mostly moving sideways now around 6%. In September, the index was up 6.2% YoY. Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted).  Case-Shiller and others report nominal house prices.  As an example, if a house price was $200,000 in January 2000, the price would be close to $280,300 today adjusted for inflation (40%).  That is why the second graph below is important - this shows "real" prices (adjusted for inflation). The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through August) in nominal terms as reported. In nominal terms, the Case-Shiller National index (SA) is at a new peak, and the Case-Shiller Composite 20 Index (SA) is back to November 2005 levels.  The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices. In real terms, the National index is back to August 2004 levels, and the Composite 20 index is back to March 2004.  In real terms, house prices are back to mid 2004 levels.

 Zillow Case-Shiller Forecast: More Solid House Price Gains in October --The Case-Shiller house price indexes for September were released this morning. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Svenja Gudell at Zillow: Case-Shiller September Results and October Forecast: Underbuilding Continues to Take a TollThe primary Case-Shiller indices paint a picture of a national housing market that’s largely stable and maybe even a bit boring from 50,000 feet, with home prices growing at roughly the same pace for the past year or more.The U.S. National Index for September showed an annual increase in home prices of 6.2 percent. The month-over-month increase from August was 0.7 percent.The 10-city composite gained 5.7 percent annually and 0.6 percent from August to September, while the 20-city composite grew 6.2 percent annually and 0.5 percent month-over-month. Seattle, Las Vegas, and San Diego continued to post the largest annual gains among the 20-city composite, climbing 12.9 percent, 9 percent and 8.2 percent, respectively.But the real action is on the sidelines. Demand is coming first and foremost from buyers in the entry-level and mid-market segments, but available inventory is largely concentrated at the high end – causing the nation’s most affordable homes to grow in value at more than twice the pace of homes at the top of the market. The past two months have shown promising signs of life from builders who have had difficulty meeting intense demand in the face of rising land, lumber and labor prices – but it’s going to take a lot more than two good months to erase a housing deficit accumulated from years of underbuilding. The year-over-year change for the Case-Shiller National index will be about the same in October as in September.   Zillow is forecasting larger year-over-year increases for both the 10-city and 20-city indexes in October.

New Home Sales increase to 685,000 Annual Rate in October ---The Census Bureau reports New Home Sales in October were at a seasonally adjusted annual rate (SAAR) of 685 thousand.   The previous three months combined were revised down. "Sales of new single-family houses in October 2017 were at a seasonally adjusted annual rate of 685,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.2 percent above the revised September rate of 645,000 and is 18.7 percent above the October 2016 estimate of 577,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.Even with the increase in sales over the last several years, new home sales are still somewhat low historically.The second graph shows New Home Months of Supply. The months of supply decreased in October to 4.9 months from 5.2 month in September. The all time record was 12.1 months of supply in January 2009. This is in the normal range (less than 6 months supply is normal).  Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.

October New Home Sales Up 6.2%, Beats Forecast - This morning's release of the October New Home Sales from the Census Bureau came in at 685K, up 6.2% month-over-month from a revised 645K in September. Seasonally adjusted estimates back to July were also revised. The Investing.com forecast was for 625K. Here is the opening from the report: Sales of new single-family houses in October 2017 were at a seasonally adjusted annual rate of 685,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.2 percent (±18.0 percent)* above the revised September rate of 645,000 and is 18.7 percent (±23.5 percent)* above the October 2016 estimate of 577,000. The median sales price of new houses sold in October 2017 was $312,800. The average sales price was $400,200. [Full Report] For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed's FRED repository here. We've included a six-month moving average to highlight the trend in this highly volatile series.

New Home Sales Smash Expectations: Spike To 10 Year Highs As Average Price Tops $400k For First Time - Following the bounce in exisitng home sales (albeit lower YoY), new home sales ripped back higher in October (up 6.2% vs expectations of a 6.1% drop) following a big downward revision of last month's manic spike. This is the highest print for new home sales since Nov 2007.  The 6.2% surge is a six standard deviation beat of expectations... September's 18.9% spike was revised notably lwoer to a 14.2% jump to 685k SAAR... This is the highest new home sales SAAR print since Nov 2007... but still has a long way to go back to 'normal'...  And finally, we note that the average new home sales price hit a new record high, above $400K for the first time ever - $400,200.

NAR: Pending Home Sales Index increase in October, Down 0.6% Year-over-year -- From the NAR: Pending Home Sales Strengthen 3.5 Percent in October Pending home sales rebounded strongly in October following three straight months of diminishing activity, but still continued their recent slide of falling behind year ago levels, according to the National Association of Realtors®. All major regions except for the West saw an increase in contract signings last month. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.5 percent to 109.3 in October from a downwardly revised 105.6 in September. The index is now at its highest reading since June (110.0), but is still 0.6 percent below a year ago.  The PHSI in the Northeast inched forward 0.5 percent to 95.0 in October, but is still 1.9 percent below a year ago. In the Midwest the index increased 2.8 percent to 105.8 in October, but remains 0.9 percent lower than October 2016. Pending home sales in the South jumped 7.4 percent to an index of 123.6 in October and are now 2.0 percent higher than last October. The index in the West decreased 0.7 percent in October to 101.6, and is now 4.4 percent below a year ago. This was above expectations of a 1.0% increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in November and December.

Construction Spending increased in October -- Earlier today, the Census Bureau reported that overall construction spending increased in October:Construction spending during October 2017 was estimated at a seasonally adjusted annual rate of $1,241.5 billion, 1.4 percent above the revised September estimate of $1,224.6 billion. The October figure is 2.9 percent above the October 2016 estimate of $1,206.6 billion. Both private and public spending increased in October: Spending on private construction was at a seasonally adjusted annual rate of $949.9 billion, 0.6 percent above the revised September estimate of $943.8 billion ... In October, the estimated seasonally adjusted annual rate of public construction spending was $291.6 billion, 3.9 percent above the revised September estimate of $280.7 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.Private residential spending has been increasing, but is still 24% below the bubble peak. Non-residential spending has been declining over the last year, but is 4% above the previous peak in January 2008 (nominal dollars).Public construction spending is now 10% below the peak in March 2009, and 11% above the austerity low in February 2014.  The second graph shows the year-over-year change in construction spending.On a year-over-year basis, private residential construction spending is up 7%. Non-residential spending is down 1% year-over-year. Public spending is up 2% year-over-year.This was above the consensus forecast of a 0.5% increase for October, and public spending for the previous two months was revised up.

US Household Debt Is Rising 60% Faster Than Wages, And One Rating Agency Is Worried --In a report released today by DBRS titled "Consumer debt and debt burden", the rating agency looks at the latest Quarterly Report on Household Debt and Credit issued by the NY Fed (discussed here previously) which showed that consumer debt for the third quarter of 2017 was approximately $12.96 trillion, representing an increase of $116 billion over the second quarter of 2017. The debt level for the first three quarters of 2017 has continued to increase above the previous record debt level which was established in the third quarter of 2008 as shown in Exhibit 1 below. DBRS also highlights that not only did total debt levels increase, but their composition changed as highlighted in Exhibit 2 below. The good news: total mortgage debt has decreased since 2008, to $8.743 trillion from $9.29 trillion, but as of the third quarter of 2017, still accounts for 67.5% of overall consumer debt.The bad news: since 2008, the growth in total debt has been attributable to the auto loan and student loan sectors. Auto loan debt has increased by 50% since 2008, to slightly over $1.2 trillion from approximately $800 billion. The most dramatic growth rate, as Zero Hedge readers know well, has been in student loan debt which has grown by 122% since 2008, to $1.357 trillion from $611 billion.But a bigger concern flagged by DBRS is that the growth in consumer debt is raising concerns when viewed in the context of the existing wage stagnation hampering the current economic environment. The rating agency cites a paper published in October 2017 by the Harvard Business Review which stated that the inflation-adjusted hourly wage has grown by only 0.2% per year since the mid-1970s and labor’s share of income has decreased to its current level of 57% from 65%.Meanwhile, in the second quarter of 2017, wages were only 5.7% higher than they were a decade earlier. In comparison, the Federal Reserve Bank of New York/Equifax data shows that consumer debt growth over the same period was 9.3%. In other words, the purchasing power of US households has been largely a function of rapidly rising debt, which over the past decade has risen 60% faster than wages.

Personal Income increased 0.4% in October, Spending increased 0.3% -- The BEA released the Personal Income and Outlays report for October:Personal income increased $65.1 billion (0.4 percent) in October according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $66.1 billion (0.5 percent) and personal consumption expenditures (PCE) increased $34.4 billion (0.3 percent). Real DPI increased 0.3 percent in October and Real PCE increased 0.1 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent. The October PCE price index increased 1.6 percent year-over-year and the October PCE price index, excluding food and energy, increased 1.4 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through October 2017 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change. The dashed red lines are the quarterly levels for real PCE. The increase in personal income was slightly above expectations,  and the increase in PCE was at expectations.

Real Disposable Income Per Capita Gains in October - With the release of yesterday's report on October Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.39% month-over-month change in disposable income was trimmed to 0.25% when we adjust for inflation. The year-over-year metrics are 2.52% nominal and 0.92% real. The trend since 2013 has been one of steady growth. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000.  Nominal disposable income is up 74.0% since then. But the real purchasing power of those dollars is up only 26.2%.

Consumer Confidence Remains at 17 Year High - The latest Conference Board Consumer Confidence Index was released this morning based on data collected through November 14. The headline number of 129.5 was an increase from the final reading of 126.2 for October, an upward revision from 125.9, and remains at a 17 year high. Today's number was above the Investing.com consensus of 124.0.  Here is an excerpt from the Conference Board press release. “Consumer confidence increased for a fifth consecutive month and remains at a 17-year high (Nov. 2000, 132.6),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved moderately, while their expectations regarding the short-term outlook improved more so, driven primarily by optimism of further improvements in the labor market. Consumers are entering the holiday season in very high spirits and foresee the economy expanding at a healthy pace into the early months of 2018.” The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.

Black Friday Posts New Single-Day Record For Gun Background-Checks -- Despite gunmaker stocks slumping as 2017 sees the biggest year-to-date decline in background check requests for firearms sales, USA Today reports that The FBI was flooded Friday with more than 200,000 background check requests for gun purchases, setting a new single day record, the bureau reported Saturday.  While gun sales have been surging in recent years - largely driven by fears of more restrictive gun laws proposed during the Obama administration - gun check numbers had leveled off in the first months of the pro-gun Trump administration...But, as USA Today notes, in all, the FBI fielded 203,086 requests on Black Friday, up from the previous single-day highs of 185,713 last year and 185,345 in 2015. The two previous records also were recorded on Black Friday.Gun checks, required for purchases at federally licensed firearm dealers, are not a measure of actual gun sales. The number of firearms sold Friday is likely higher because multiple firearms can be included in one transaction by a single buyer. The surging numbers received by the bureau's National Instant Criminal Background Check System (NICS), comes just days after Attorney General Jeff Sessions ordered a sweeping review of the system, which allowed a court-martialed Air Force veteran to purchase the rifle used earlier this month to kill 25 people inside a Sutherland Springs, Texas, church. Following the shooting, the Air Force acknowledged it had not provided the FBI with details of the court martial, which likely would have blocked the 2016 sale of the murder weapon to Devin Kelley.

Supreme Court refuses to take up Maryland's assault weapons ban | TheHill: The Supreme Court refused Monday to hear an appeal from gun owners and dealers in Maryland challenging the state’s ban on military-style rifles and detachable magazines. The Maryland General Assembly enacted the ban in 2013 after a gunman killed 20 children and 6 adults at an elementary school in Newtown, Conn. The U.S. Court of Appeals for the Fourth Circuit upheld the ban. That court said the weapons are excluded from Second Amendment protections because they are the kind of weapons most often used by the military. “Put simply, we have no power to extend Second Amendment protection to the weapons of war that the Heller decision explicitly excluded from such coverage,” Judge Robert King wrote in the majority opinion, citing a landmark Supreme Court case from 2008. Maryland's Firearm Safety Act of 2013 bans the AR-15 and other military-style rifles and shotguns, often referred to as “assault weapons,” and detachable large-capacity magazines. The petitioners, however, argued that these weapons are commonly used for self-defense in the home and should be protected by the Second Amendment.

U.S. Light Vehicle Sales at 17.35 million annual rate in November -- Based on a preliminary estimate from WardsAuto, light vehicle sales were at a 17.35 million SAAR in November.
That is down 1% from November 2016, and down 3.6% from last month. This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for November (red, light vehicle sales of 17.35 million SAAR  from WardsAuto).  This was below the consensus forecast of 17.6 million for November (Note: Hurricane Harvey pushed down sales at the end of August, and sales bounced back in September, October and November).  Still - even with the recent bump in sales - vehicle sales will be down year-over-year in 2017, following two consecutive years of record sales.  The second graph shows light vehicle sales since the BEA started keeping data in 1967. Note: dashed line is current estimated sales rate.

Dallas Fed Manufacturing Outlook: Expansion Slow but Solid in November - This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for November. The latest general business activity index came in at 19.4, down from 27.6 in October. Here is an excerpt from the latest report:Texas factory activity continued to expand in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 10 points from its October reading but remained elevated at 15.1.Perceptions of broader business conditions remained highly positive in November. The general business activity index came in at 19.4, down eight points from October. The company outlook index posted its 15th consecutive positive reading but dipped to 18.5.Expectations regarding future business conditions remained highly optimistic. The index of future general business activity held steady at 39.0, while the index of future company outlook edged up to 40.8. Other indexes for future manufacturing activity showed mixed movements but remained solidly in positive territory.Monthly data for this indicator only dates back to 2004, so it is difficult to see the full potential of this indicator without several business cycles of data. Nevertheless, it is an interesting and important regional manufacturing indicator. The Dallas Fed on the TMOS importance: Texas is important to the nation’s manufacturing output. The state produced $159 billion in manufactured goods in 2008, roughly 9.5 percent of the country’s manufacturing output. Texas ranks second behind California in factory production and first as an exporter of manufactured goods.

Dallas Fed Survey Plunges Most In 22 Months -- After reaching its highest level since March 2006 in October, Dallas Fed manufacturing outlook tumbled over 8 points (the most since Jan 2016) to unchanged for the year. Dallas Fed printed at 19.4, notably below expectations of 24.0 (and below the lowest estimate).. Company Outlooks slumped, production tumbled, capacity utilization fell, new orders slipped, employment plunged, and wages and hours worked dropped... but apart from that, everything is awesome. This is not the first 'soft' survey print to disappoint recently...

Richmond Fed: "Fifth District Manufacturing Activity Saw Robust Growth in November"--  From the Richmond Fed: Fifth District Manufacturing Activity Saw Robust Growth in NovemberManufacturing firms reported robust growth in November, according to the latest survey by the Federal Reserve Bank of Richmond. The composite index jumped from 12 to 30, the highest it has been since 1993. This rise was bolstered by strengthening conditions across all three components of the index. While indicators of current wages and finished goods fell in November, both maintained positive values, dropping from 24 to 21 and 14 to 9, respectively.District manufacturing firms remained optimistic that growth will continue in the coming six months. But a smaller share of firms raised their expectations than had in October in all areas, except for wages and capital expenditures.  This was the last of the regional Fed surveys for November.  Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Richmond Fed Survey Unexpectedly Spikes To Record High - Beats By 16 Standard Deviations -- WTF!  While other 'soft' survey data has been disappointing recently, The Richmond Fed  Manufacturing Outlook did not... in fact, against expectations of a 14 print, following a 12 print in October, November printed 30! - 16 standard deviations above expectations. This is an all-time record high for the survey...  Despite a major spike in 6 of the 8 sub-indices (with shipments and new orders and workweek soaring), Wages tumbled? Perhaps the reason is simple - Shipments and New Order Volume expectations for six months ahead tumbled.

Regional Fed Manufacturing Overview: November Update - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP. The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for November is 22.2, up from the previous month's 21.2.

Chicago PMI Softens in November The Chicago Business Barometer, also known as the Chicago Purchasing Manager's Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity. The latest report for Chicago PMI came in at 63.9, down from 66.2 last month. Investing.com forecast 63.0.Here is an excerpt from the press release:  “Despite November’s fall, the MNI Chicago Business Barometer remains on track to deliver the first full year of expansion in three years. Firms seem to have navigated through the worst of the bad weather conditions in recent months, though supplier deliveries rising to a thirteen-year high and persistent, high input costs suggests the effects are yet to fully dissipate away,” said Jamie Satchi, Economist at MNI Indicators. [Source] Let's take a look at the Chicago PMI since its inception.

ISM Manufacturing index decreased to 58.2 in November -- The ISM manufacturing index indicated expansion in November. The PMI was at 58.2% in November, down from 58.7% in October. The employment index was at 59.7%, down from 59.8% last month, and the new orders index was at 64.0%, up from 63.4%.  From the Institute for Supply Management: November 2017 Manufacturing ISM® Report On Business® Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 102nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The November PMI® registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. The New Orders Index registered 64 percent, an increase of 0.6 percentage point from the October reading of 63.4 percent. The Production Index registered 63.9 percent, a 2.9 percentage point increase compared to the October reading of 61 percent. The Employment Index registered 59.7 percent, a decrease of 0.1 percentage point from the October reading of 59.8 percent. The Supplier Deliveries Index registered 56.5 percent, a 4.9 percentage point decrease from the October reading of 61.4 percent. The Inventories Index registered 47 percent, a decrease of 1 percentage point from the October reading of 48 percent. The Prices Index registered 65.5 percent in November, a 3 percentage point decrease from the October level of 68.5, indicating higher raw materials prices for the 21st consecutive month. Comments from the panel reflect expanding business conditions, with New Orders and Production leading gains, employment expanding at a slower rate, order backlogs stable and expanding, and export orders all continuing to grow in November. Supplier deliveries continued to slow (improving), but at slower rates, and inventories continued to contract during the period. Price increases continued, but at a slower rate. The Customers’ Inventories Index improved but remains at low levels."   Here is a long term graph of the ISM manufacturing index.

Markit Manufacturing PMI: Robust Growth in November - The November US Manufacturing Purchasing Managers' Index conducted by Markit came in at 53.9, down from the 54.6 final October figure. Today's headline number was above the Investing.com forecast of 53.8. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is the opening from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:"US manufacturers reported further solid growth in November. The rate of expansion settled slightly after October’s rebound from the hurricanes, but still leaves the sector on course for its best quarter since the opening months of 2015.""What’s especially encouraging is that growth is being led by producers of business equipment and machinery, indicating investment spending is on the rise." [Press Release] Here is a snapshot of the series since mid-2012.

US Manufacturing's Hurricane-Rebound Is Over: New Orders Sink, Costs Soar -- The brief rebound in US manufacturing after the hurricanes appears to have ended as Markit's PMI dropped from 54.6 to 53.9 as new orders slowed amid soaring inflation. For once ISM Manufacturing also agreed with PMI - dropping to its lowest since July - with employment and export orders sinking.  While new orders slowed, the most notable item in the PMI data was that inflation is surging...Average prices charged by manufacturers rose further in November, with the pace of inflation accelerating to the fastest in almost four years.Anecdotal evidence suggested the increase was due to greater cost burdens which were largely passed on to clients.  Input price inflation also quickened since October and was steep overall. Survey respondents commonly stated that components costs rose due to logistical delays. ISM data shows a drop in employment and export orders... ISM respondents seem enthused still:

  • "Continuing to see more orders for the next six to 12 months." (Chemical Products)
  • "Strong sales through third and now fourth quarters. Backlog increasing, and capacity at suppliers tightening." (Machinery)
  • "Business has leveled out but remains strong heading into the end of the year." (Computer & Electronic Products)
  • "We are just coming off a record sales year. We expect to continue in 2018 robust activity." (Miscellaneous Manufacturing)
  • "We are seeing steady, consistent demand for end of year. We usually see a slowdown, which we haven’t seen yet." (Fabricated Metal Products)
  • "Overall industry demand remains strong. Continue to have a healthy backlog of orders. Local economy is also strong, with a fairly tight labor market." (Transportation Equipment)
  • "Business is strong. Employment is tight. Supplier deliveries have lengthened. A few suppliers are still blaming Hurricane Harvey for the lead times." (Food, Beverage & Tobacco Products)
  • "Strong season demand for products and continued requirements for uptime." (Nonmetallic Mineral Products)
  • "Currently, we have not experienced the typical seasonal slowdown toward the end of Q4. Could be that there is a lot of optimism in the American economy." (Plastics & Rubber Products)

 Weekly Initial Unemployment Claims decrease to 238,000 - The DOL reported:In the week ending November 25, the advance figure for seasonally adjusted initial claims was 238,000, a decrease of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 239,000 to 240,000. The 4-week moving average was 242,250, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 239,750 to 240,000.Claims taking procedures continue to be disrupted in the Virgin Islands The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

Work Halts at NYC Condo Tower After Council Rules It’s Too Tall - Workers building a Manhattan condo tower were in the middle of pouring concrete Thursday afternoon when the city’s building department came to shut everything down. Fifteen minutes earlier, the New York City Council voted to rezone the neighborhood along the East River where the Sutton 58 development is located, capping the height of all new buildings in the area. Gamma Real Estate’s project, slated to rise 799 feet (244 meters), was suddenly illegal. “The council vote occurred at 4:10 and we were stopped at 4:25 -- that is a display of the craziness that has been thrust upon us,” Jonathan Kalikow, president of Gamma Real Estate, said in an interview Friday. Gamma had been racing to finish foundation work ahead of the zoning change, which would require the planned 67-story tower to be cut by about half. If the foundation had been completed before the ruling, the building would have been exempt from the restrictions. Council members voted to approve the rezoning, covering the areas from 52nd to 59th streets, east of First Avenue and to the edge of the East River. At the time of the vote, Gamma was 10 work days away from completing the foundation, or about 95 percent done, said Kalikow, whose firm plans to seek a reprieve from the Board of Standards and Appeals.

Records show these prosecutors gave themselves huge bonuses using asset forfeiture funds - The district attorney’s office in Suffolk County on Long Island, N.Y., has been caught funneling enormous sums of criminal asset forfeiture funds straight into employees’ pockets with huge bonuses as high as $108,886 for a single prosecutor over the course of five years. While the office originally reported distribution of $2.7 million in bonuses between 2012 and 2017, additional recordsobtained via a freedom of information request now show the total is significantly higher, at about $3.25 million. The payments are very possibly illegal. “These bonuses were not authorized by the county legislature pursuant to any legal process or authority that I am aware of,” Suffolk County Executive Steve Bellone wrote in a letter to the New York State Comptroller asking for an external review of the situation.On top of the legality question is the glaring perverse incentive: If law enforcement employees can use criminal asset forfeiture to line their own pockets, even the most honest will be faced with an enormous encouragement to confiscate funds unrelated to the crime or otherwise abuse their positions of authority. Unlike civil asset forfeiture, criminal asset forfeiture can be appropriate — for example, you shouldn’t be allowed to keep something you stole — but it has certainly been abused or applied in unreasonable ways.  This story from New York is unfortunately not an isolated case. For example, here’s a similar report from Texas in 2013:When I looked through courthouse records and talked with local interdiction officers in nearby counties, I saw what he meant. In Hunt County, Texas, I found officers scoring personal bonuses of up to twenty-six thousand dollars a year, straight from the forfeiture fund. In Titus County, forfeiture pays the assistant district attorney’s entire salary. Farther south, in Johnson County, I came upon a sheriff’s office that had confiscated an out-of-state driver’s cash, in the absence of contraband, in exchange for a handwritten receipt that gave the traveler no information about who had just taken his money, why, or how he might get it back.Sometimes, the money doesn’t go directly into officers’ bank accounts, but it does pay for departmental improvements and luxuries of varying degrees of necessity, as the Huffington Post reported: “Certain items became bonuses for police — cash was confiscated, property was sold, and departments profited as proceeds were funneled back to pay for overtime, equipment, trips to Las Vegas or [new police cars].”

Surging Household Debt Is Forcing More New Yorkers To Rely On Food Pantries -- As US stock benchmarks smash through one record high after the next – a central-bank driven phenomenon that disproportionately benefits the wealthy at the expense of the middle-class and working poor - booming credit-card debt is forcing more New Yorkers to seek assistance at the city’s food pantries this holiday season, according to a report in theNew York Post. As revealed by the latest New York Fed data – which we cited earlier this month - US household debt has grown by $605 billion in the 12 months through the end of the third quarter. Q3 marked the thirteenth consecutive month of expansion as $116 billion was added to consumers’ aggregate debt pile. And while credit debt is climbing aggressively – it jumped 3.1% in Q3 alone - mortgages, student loans and auto loans are also swelling. To put this in context, consumers’ aggregate debt burden, which is just under $13 trillion, is equivalent to 66% of GDP, and has also surpassed its peak from the run-up to the crisis. The result is that more New Yorkers are forced to rely on food pantries while dodging calls from debt collectors.“We’ve seen a large increase in credit card debt for the population we are serving in New York,” said Laine Rolong, senior manager at the financial empowerment program at the Food Bank for New York City.Rolong noted that many food pantries it serves in the city have had to turn hungry people away lately in the face of rising demand for limited emergency food stocks. One expert says the credit card binge reminds him of the buildup to the financial crisis of 2007 and 2008. And this, say other experts, could be the telltale sign of an imminent recession.

Over 200,000 Puerto Ricans have arrived in Florida since Hurricane Maria - The exodus of Puerto Ricans to Florida following Hurricane Maria has reached a whopping 200,000 in just over two months, obliterating initial conservative estimates that had put the number at 100,000.  The scale of migration is larger than any other in Puerto Ricans history. “Puerto Rico will be seen by historians as before and after Maria,” said Luis Martinez Fernandez, a History professor at the University of Central Florida, calling it “a watershed moment.” Since the initial aftermath of the hurricane, Fernandez has predicted a total of 500,000 to 750,000 Puerto Ricans would leave the island in a four-year period. “As it turns out, 500,000 is now the low-end estimate for a five year period. It appears that it will be closer to 750,000,” according to Fernandez. He said the exodus is unfolding along several interconnected waves. First, the wave that was underway prior to the storm, which had reached a level of around 80,000 per year. Since the hurricane, a second wave has added to what was already a spike. A larger and longer-term wave will continue over the next few years, he said. Consequently, an already deeply indebted government will continue to see a sharp drop in the tax base, which reduces its ability to provide services and pay its debt. “In that sense, Maria was a perfect storm of destruction and economic ruin,” Fernandez said. The population of Puerto Ricans in Florida has swelled from 479,000 in 2000 to over one million now. Many of those were originally fleeing the island’s economic recession. But not all the Puerto Ricans arriving will stay for good. Some, particularly the older generations, will return.

Hurricane Harvey Victims: More Than 20,000 Children in Houston Are Homeless, Report Shows - The destruction levied by Hurricane Harvey still reverberates across Houston. According to local reports, tens of thousands of Houston residents lack stable housing three months after the storm made landfall, living in trailers, tents, shelters, and in what the Houston Chronicle calls “barely habitable homes.” Over 22,000 of those without a home are children, while some 47,000 Harvey victims stay in hotel rooms paid for by the federal government at a tune of $2.8 million a day. Officials say that the blame falls on government agencies at all levels for not doling out aid fast enough. “We are behind where we need to be, city, state and federal,” Tom McCasland, director of Houston’s housing and community development department, told the Chronicle earlier this week. “It’s time to get these programs out in the community, get hammers swinging, get people moving back into their homes.” By many accounts, Hurricane Harvey was one of the most destructive natural disasters in American history. It is estimated that Harvey caused $180 billion in damage, affecting some 13 million people across Texas, Louisiana, Mississippi, Tennessee, and Kentucky. Only Hurricane Katrina surpasses these figures. In the end, Harvey damaged more than 311,000 housing units in Houston, “roughly a third of the housing stock,” according to the Chronicle. Nearly 900,000 people applied for FEMA financial assistance since September. So far, the agency has approved more than 353,000 of those applications, handing out $1.4 billion in grants, an average of $4,000 in assistance per family, according to the Chronicle.But almost all of hurricane victims approved for FEMA’s long-term housing assistance programs have not been resettled. As put by the Chronicle: “Although more than 9,500 Texas families had qualified for some form of additional temporary housing assistance as of Tuesday, just one had been able to move back into a home repaired through FEMA's program, and 223 were living in a trailer or mobile home.”

Texas School Beats ADHD by Tripling Recess Time -- While most school districts across the country are cutting back on recess time and ramping up the Ritalin, one Texas school has kindergartners and first graders sitting still and “incredibly attentive.”  What’s their secret? Their recess time has tripled.Instead of 20 minutes of recess per day, Eagle Mountain Elementary kindergartners and first graders now get an hour, broken up into four 15-minute breaks, in addition to lunchtime. Their teachers say it’s totally transformed them. The kids are less fidgety, less distracted, more engaged in learning and make more eye contact. Eagle Mountain is one of dozens of schools in Texas, Oklahoma and California testing out extra recess time as part of a three-year trial. The pilot program is modeled after the Finnish school system, whose students get some of the best scores in the world in reading, math and science. The designer of the program — called LiiNK — is kinesiologist Debbie Rhea of Texas Christian University. Rhea spent 6 weeks in Finland in 2012 to discover the secret of their success.The biggest difference Rhea noticed was that students in Finland get much more recess than American kids do — 15 minutes of “unstructured outdoor play” after every 45 minutes of instruction.They key is the “unstructured,” Rhea told TODAY, which means kids are allowed to run, play and make up their own games. While indoor breaks are better than none, Rhea says they should ideally take place outdoors because fresh air, natural light and vivid colors all have a big impact on brain function.

Maryland Schools Forced To Cancel Baltimore Field Trips Due To "Escalating Violence" –- In light of the ongoing wave of violent crime in Baltimore, school officials in nearby Carroll County have been forced to halt school-related trips to the city - including a marching band’s scheduled performance in the Mayor’s Christmas Parade this weekend - citing "escalating violence."  The field trip ban was imposed by the Carroll County Sheriff's Office "in response to parent concerns regarding the safety of students."  Here's more from The Baltimore Sun:Schools spokeswoman Carey Gaddis said the order is based on a recommendation from the county Sheriff’s Office, and will stay in place until the beginning of the next semester in late January, when it will be revisited. She said the order was sent to school principals last week.Sheriff James T. DeWees recommended the measure during a meeting with school system officials “in response to parent concerns regarding the safety of students during field trips to venues in Baltimore City,”according to a statement from the sheriff’s office. The move is intended to “limit the risk to students and staff.”“In light of recent violence in the traditional tourist areas of the city, the sheriff agrees that the best course of action is to temporarily suspend travel to Baltimore City venues,” spokesman Cpl. Jonathan Light wrote in the statement.

NY schools just got bad fiscal news - Pension costs for New York schools are expected to soar as much as 12 percent next year – the first increase in four years.The state's nearly 700 school districts each year pay a portion of an educator's salary into the Teachers Retirement System, and the system this month estimated the costs will rise from 9.8 percent of payroll this year to as much as 11 percent of payroll next year.The increase comes as schools are already concerned about the impact the state's fiscal woes will have on state aid next year, as well as the looming proposal by Congress to eliminate state and local tax deductions — which could squeeze districts' tax revenue."Chiefly because of possible actions in Washington, the state budget outlook is as volatile and uncertain as anything I've experienced," said Bob Lowry, deputy director of the state Council of School Superintendents. The increase in pension costs, he said, "adds to the challenges district leaders will have to manage in developing their school budgets. Given the performance of the stock market, most of us were not anticipating an increase of this level this year." The $108 billion retirement system, which includes 265,000 active members and 164,000 retirees, also announced it is lowering its estimated rate of return for the fund from 7.5 percent to 7.25 percent. The move comes two years after the system dropped the rate from 8 percent to 7.5 percent amid pressure that its goals were too lofty in the midst of volatility on Wall Street.

Puerto Rico: Ruined Infrastructure and a Refugee Crisis -- Puerto Rico’s infrastructure remains in tatters, with the power grid still largely dysfunctional and basic institutions such as schools and hospitals on life support. Of Puerto Rico’s 1,113 schools, only 119 have reopened. The teachers’ union, Federación de Maestros de Puerto Rico, has suggested that the government has slowed down rebuilding of schools in order to push for their privatisation. They say that the plans for the rebuilding of Puerto Rico are similar to what was done in New Orleans after the devastation of Hurricane Katrina in 2005, when schools fired teachers and created a network of private charter schools. The Federación worries that much the same will happen in Puerto Rico. The failure to reopen schools is one sign of such a plan. In early November, U.S. Education Secretary Betsy DeVos met Puerto Rico’s Education Secretary Julia Keleher in San Juan. Members of the Federación marched outside the Department of Education to demand a seat at the table. It was not offered to them. Betsy DeVos and Julia Keleher did not talk to the teachers. Julia Keleher had already been pushing a plan to privatise the island’s schools, and the storms gave her and Betsy DeVos the opportunity to do so with minimal resistance. The storm, said Julia Keleher, gave the island a “real opportunity to press the reset button”. Privatisation, she suggested to a local paper, “makes sense”. About the teachers’ unions, she said that “they can go out and protest in the streets, but that doesn’t change the fact that we can’t go back to life being the same as it was before the hurricane”.

A Race To Suppress Academic Freedom? - This post is triggered by an unnamed editorial in today’s Washington Post (probably authored by Fred Hiatt) criticizing China for imposing ideological limits on Chinese universities.  Since the recent party congress, 40 universities have set up centers for studying Xi Jinping Thought.  14 universities have come under attack for being “ideologically weak.”  Joint operations between US and Chinese universities must appoint a party secretary as a vice chancellor.  There have also been restrictions on the internet and other matters. Of course, the WaPo editorial did not notice trends in US academia that also may lead to suppression of research activity and threaten the current leading position of US higher ed in the world, although there have been reports and columns commenting on these trends.  Among them are the push for political correctness coming from students, but probably more important is the assault on higher ed coming from the Trump administration.  This is seen in the attack on tax breaks for students but also the push to distort funding for research on certain topics. While not directly on higher ed, probably the most damaging has been the attack on science in government agencies, especially the EPA, with such nonsense as banning scientists who have received funding from the agencies on their scientific advisory boards, even as those receiving funding from corporations at odds with goals of these agencies are allowed to be on those boards. Really, it looks that the two most powerful nations on the planet are having a race to suppress academic freedom and suppress the free development of knowledge in this world at a time when we need more of that.

Oxford and Cambridge are said to be illegally spying on students for money -- Universities are not benevolent institutions that exist only to nurture and enlighten young minds. They’re also cash-hungry corporations eager to eke money out of the students they graduate—a mission made clearer by recent revelations about Oxford and Cambridge. The two schools—along with the two dozen other universities in the UK’s Russell Group, an association of public research universities that includes University College London and the London School of Economics—are under UK government scrutiny for spying on graduates to boost donations in fundraising drives. According to an investigation from the Daily Mail, the 24 schools illegally hired wealth-screening firms to keep track of students’ salaries, investments, pensions, home values, and friendships without their permission, all to determine which alumni would be likely to donate the most. Details include:
  • Oxford assessing the “estimated wealth band” on 199,369 alumni records;
  • Cambridge sending 301,769 alumni records to wealth-screening companies such as one called “Prospecting for Gold”;
  • the University of Manchester performing “demographic coding” on graduates, categorizing them by class;
  • the University of Sheffield identifying “retired residents in sizable homes whose finances are secured by significant assets and generous pensions”;
  • several schools highlighting alumni who are likely to include them in their wills.

“Personal data belongs to the individual and that means they have the right to make choices about how it’s used,” said Elizabeth Denham, head of the information commissioner’s office, which is looking into the Daily Mail’s investigations for the UK’s education department, according to the UK’s Telegraph. The Russell Group released the information to the Daily Mail under the Freedom of Information Act, despite campaigning previously to be exempted. In response to the new report, a spokesperson from the Russell Group told the Telegraph that the organization takes alumni privacy “very seriously.”

House GOP plans to introduce bill that embraces deregulation of higher education -- House Republicans plan to introduce a bill that would make broad changes to policies that affect higher education and student debt, according to a Wall Street Journal report. These policies, which would be part of the Higher Education Act, last reauthorized in 2008, would get rid of student loan forgiveness programs for public service employees, place caps on borrowing for graduate students, and provide more funding to community colleges for apprenticeships and partnerships with businesses. If this wasn’t enough cause for concern, the new bill also “eases restrictions on paying student recruiters” and “touches on regulations that online programs view as burdensome,” according to the Journal. The Higher Education Act currently prohibits incentive compensation to employees for success in securing student enrollments, a common for-profit college industry tactic. The department clarified in 2015 that it does not include a ban on compensation for recruiters based on graduation or completion of education programs. The proposed bill also reportedly refers to freedom of speech on campus, sexual assault, and changes in funding for historically black colleges and universities. Republicans often claim that traditional four-year colleges aren’t offering students practical skills to prepare them for the workforce and say that for-profit schools offer better paths. But for-profit colleges have often left students woefully unprepared for their intended careers and have misrepresented their graduates’ success.  House Republicans’ proposed changes neatly align with the priorities of Education Secretary Betsy DeVos. DeVos has repeatedly pushed the message that there is a “path for a successful life” that does not include a four-year degree and that skills-training programs have been “stigmatized.” Although it is true that vocational training and associate’s degrees have been characterized as dead ends, often unfairly, the question is whether DeVos is interested in making sure that disadvantaged students have a full range of options that they can realistically take, rather than pushing them into the only one they can afford. Thus far, the U.S. Department of Education under DeVos has not made it easier for students to make payments on their loans or to receive loan forgiveness after they have been defrauded by for-profit colleges.

There’s a gift for student lenders in the education bill -- After the 2016 elections, there were high hopes that student lenders (and servicers) would benefit from a more favorable environment regulatory environment and expanded lending opportunities.  Until recently, however, there was not much to show in either respect. While the industry cheered the Department of Education’s decision in August to stop sharing servicing data with the Consumer Financial Protection Bureau, higher education did not appear to be a high priority for the Trump administration.  Now it appears that private lenders could play a much larger role in financing higher ed, and Congress, not the White House, is the catalyst. The House is reportedly preparing legislation that aims to change how Americans pay for college. Industry participants and observers say that almost all of the measures in the Promoting Real Opportunity, Success and Prosperity through Education Reform Act, which were reported by The Wall Street Journal this week, would benefit lenders and servicers.   But the introduction of limits on federally guaranteed loans to graduate students, instead of letting them borrow whatever schools charge, would be the biggest plum for the industry — potentially creating a multibillion-dollar opportunity for the likes of Sallie Mae, Wells Fargo, Discover and Citizens Bank.  “Ultimately what it means is either people won’t go to more expensive schools, or they will simply borrow more from private lenders,” said David Klein, CEO of CommonBond, which offers both in-school and consolidation loans. “The degree to which any of that happens depends on where the level of the cap is set.”  All private student lenders stand to benefit from reductions in lending under the Grad PLUS program. But no one is in as better position than the market leader, SLM Corp., also known as Sallie Mae. It was already planning to expand lending to graduate students, with six new products targeting professional degrees that will be rolled out next year: Business schools, legal, medical, dental, health professionals and a general graduate loans. Sallie Mae and other private lenders originate some $1 billion in loans to graduate students in the 2016-17 school year, while Grad PLUS originations totaled $9.6 billion.

Something Has to Give - Using the latest Survey of Consumer Finances, I broke out student debt levels by student debt percentiles below. This is a more comprehensive look at student debt trends than the medians and means you usually see. (Hover your cursor over the graph to get a list of values at each percentile.)The graph shows that the starting point for student indebtedness keeps moving lower and lower in the distribution. In 1989, positive student indebtedness starts at the eighty-fourth percentile, meaning 16% of young families carried student debt. By 2016, the starting point was the fifty-sixth percentile, indicating that 44% of young families carried student debt.Student debt levels at any given percentile have also risen substantially. In 1989, the ninetieth percentile carried $5,598 of student debt, while the same percentile had $44,000 of debt in 2016. The eightieth percentile had no debt in 1989, $1,610 of debt in 1992, and $22,000 of debt in 2016.In the next graph, I divide student debt levels by current income in order to produce a similar distribution.The trend here is the same. In 1989, the debt of the ninetieth percentile was 11.5% of their current income. By 2016, it was 109.7%. In 1992, the debt of the eightieth percentile was 3.9% of their current income. By 2016, it was 48.4%.During the last decade, many thought that the student debt positions of young families were being driven by the effects of the Great Recession. But it is clear from the 2016 data that the problem remains: every year, more and more young people are taking on higher and higher levels of student debt. These kinds of year-over-year increases in student debt levels are ultimately unsustainable. It is not possible for debt to perpetually grow faster than the capacity to repay it. Eventually something will have to give.

 Teacher pensions—the most important tool for keeping and retaining good teachers -  Chad Aldeman at Bellwether Education Partners tweeted that my recent report on teacher pensions was “frighteningly bad.” Here’s what’s really frightening: a zombie lie about teacher pensions that won’t die. Attacks on teacher pensions may not rank with global warming or mass shootings on the list of things keeping us awake at night, but they deserve way more attention than they get. Teacher pensions are the single most important tool for recruiting and retaining good teachers, and good teachers are the key to our future in a knowledge economy. Yet Aldeman is trying to mislead people into supporting Kentucky Governor Matt Bevin and others around the country who want to switch teachers to 401(k)-style plans. Aldeman claims that “most teachers get a bad deal from teacher pensions.” Though my research, and earlier research from UC Berkeley, showed that the vast majority of teachers are well-served by their pensions, this recycled claim appears impervious to counter-evidence. As long as a billionaire with an agenda keeps funding the research, we’ll continue see elaborate variations on the same theme, all of which rely on the same statistical sleight-of-hand. The average person understands “most teachers” to mean “most teachers teaching today” or at any given point in time. This is a commonsense interpretation, and the one used in my research. Aldeman’s methodology instead counts new teachers as they enter the system, giving them equal weight whether they teach for just one year or for a whole career. As I showed in my paper, even if slightly over half of new teachers leave before becoming eligible for employer-provided benefits, these short-term teachers, some of whom go on to earn pension benefits in different systems, represent only a tiny fraction of the teaching workforce.

If Vanguard Is Right, You’ll Need to Save More For Retirement - Pam Martens - Vanguard is one of the largest mutual fund companies in the world with 20 million investors and approximately $4.5 trillion in global assets under management as of September 30, 2017, according to its website. When it expounds on the outlook for the stock market, people tend to listen closely.Yesterday, Vanguard issued its economic and stock market outlook for the medium term, writing: “For 2018 and beyond, our investment outlook is modest, at best. Elevated valuations, low volatility, and secularly low interest rates are unlikely to be allies for robust financial market returns over the next five years.”Exactly how “modest” does it expect stock market returns to be over the medium term? The report goes on to define “modest” as follows:“Based on our ‘fair-value’ stock valuation metrics, the medium-run outlook for global equities has deteriorated a bit and is now centered in the 4% – 6% range. Expected returns for the U.S. stock market are lower than those for non-U.S. markets, underscoring the benefits of global equity strategies in the face of lower expected returns.” If your retirement savings strategy has factored in an annualized stock market return of 7 percent or higher and Vanguard is right about the potential for a return of 4 to 6 percent, those planning to retire in less than 10 years will need to either save more for retirement or extend out the date of retirement.  This reality may already be setting in among millions of pre-retirees as they watch friends and family members who have already retired tighten their belts as a result of an unprecedented, prolonged low rate of return for fixed income investors. Retirees who were earning 4 and 5 percent on U.S. Treasury securities or Certificates of Deposit prior to the financial crash in 2008 have seen their interest income cut by half or more since the crisis.

More Iowans Choose Faith-Based Health Plans - A health care option that’s an alternative to traditional insurance has been growing in popularity in Iowa and across the country.    Members of so-called health care sharing ministries write checks every month to cover the health care bills of other members, without the guarantees and oversight of traditional insurance.   Even more Iowans are expected to enroll now that some premiums under the Affordable Care Act have skyrocketed.  Since the ACA, more and more new members have joined the groups, either to bypass Obamacare’s individual mandate altogether or to avoid high premiums.  News has spread by word of mouth and radio ads.     “You can save a lot of money by switching today to MediShare, but you’re also making a difference in the lives of others,” said one ad that aired on Christian radio in Iowa.     For years, MediShare and other similar programs have charged monthly payments that are generally lower than insurance premiums, currently as little as $400 a month for a family.   MediShare coordinates the payments so they go directly to cover other members’ health care bills. “The MediShare program has been around since 1993, and in that time our members have shared more than $1.2 billion in one another’s medical expenses,” said Director of Marketing and Communication Michael Gardner.    “Our members value the fact that they’re joining a like-minded community of people.” Gardner says the program helps Christian follow a biblical mandate to share one another’s burdens.   To sign up, members attest to their Christian faith and regular church attendance.      On any given month, MediShare covers roughly $25 million in medical bills.   Over the program’s history, two bills were covered that exceeded a million dollars.    

Healthcare Costs and Its Drivers Today - An interesting point being was made by MedPage Today’s Dr. Milton Packer on his blog, “people suffer and die because Payors (Healthcare Insurance) is cost effective.” He starts his discussion on the opiate epidemic in the US, opiates are being prescribed by doctors for pain relief and . . . “Patients are becoming addicted to opiates after the initial 10 day prescription with one-fifth of patients still using opiates a year later. There is no need to prescribe opiates as other less addictive pain-relief formulations are available, which are not commonly prescribed.” This raises the question of why? Payers will not pay for the alternatives. The less-addictive opiates are more expensive and payers have declined to support them. Patients get addicted because prescribing for the lower cost and highly addictive opiates saves the payers money initially (me). September 17, 2017, the New York Time and ProPublica collaborated on an article concerning the opiod epidemic in the US. At a time when the United States is in the grip of an opioid epidemic, many insurers are limiting access to pain medications that carry a lower risk of addiction or dependence, even as they provide comparatively easy access to generic opioid medications.The reason given: Opioid drugs are generally cheap while safer alternatives are often more expensive.   While the pharmaceutical manufacturers, distributors , and doctors have come under scrutiny; insurance companies and the pharmacy benefit managers (CVS Caremark, Express Scripts and OptumRx) make the final decisions as to what is covered. It could be something as simple as a higher tier and deductible to block usage.

Healthcare Costs and Waste - Propublica has a story on waste in the medical industry: Experts estimate the U.S. health care system wastes $765 billion annually — about a quarter of all the money that’s spent. Of that, an estimated $210 billion goes to unnecessary or needlessly expensive care, according to a 2012 report by the National Academy of Medicine.  Having visited doctors in the past decade or two a few times, I can believe the 25% figure.  The billing structure alone creates massive amounts of waste.  But some see Propublica as overly liberal, so why not check their figures?   followed the links to the National Academies of Science, Engineering and Medicine and clicked on this slideshow from 2012. Slide seven was particularly interesting. It included the following bullet points:

• Health care costs constitute 18% of U.S. GDP
• 30% increase in personal income over the past decade effectively
eliminated by a 76% increase in health care costs
• $750B in waste

Now, in 2012, the year the report was published, GDP was $16.16 trillion. If healthcare spending was 18% of that, it amounted to about $2.91 trillion. And $750B, the amounted wasted is a bit more than 25%.  Which is to say, Propublica’s numbers are in line with the National Academy’s numbers from 2012. Which raises a question…  wasn’t the point of not moving to a single payer regime that the private sector would eliminate waste such as this?

Diabetes hits hard as California spends billions on treatment, little on prevention - A University of California, Los Angeles study last year found that 9 percent of adults in California have been diagnosed with diabetes, a chronic condition in which the body does not process sugar well and which can lead to blindness, heart disease, stroke and infections resulting in amputations. Forty-six percent—including about a third of those under 40—are pre-diabetic, with elevated sugar levels that will likely develop into diabetes. That’s 55 percent of the state’s adult population swept up by the disease. Treating diabetes costs government, private insurers and patients about $27.6 billion a year in California for such expenses as doctor visits, testing, medication, surgery and hospital costs, according to the American Diabetes Association. The state and federal governments shoulder most of that expense through Medi-Cal, which is California’s health program for those living in poverty, and the national Medicare system that covers seniors.A state audit of the California Department of Public Health diabetes prevention efforts released two years ago said that California lagged in such spending. The state spent about $1 million from the federal Centers for Disease Control and Prevention, a sum that has since grown to $1.4 million, but did not devote state money to such programs. New York, the audit points out, was spending $7.2 million, although some of that money went to anti-obesity programs. Beginning in July, with the next budget, $5 million in state funds will go toward a nutrition and exercise program for pre-diabetic enrollees in Medi-Cal. That project, based on a CDC model called the Diabetes Prevention Program, can cut the risk of developing diabetes in half, according to the  CDC. In addition, it is expected to save about $45 million in treatment expenses over the next five years, said Assemblyman Joaquin Arambula, a Kingsburg Democrat and physician who co-chairs a health subcommittee.

More than half of U.S. kids will be obese by the time they’re 35, study predicts - By the time today’s kids reach the age of 35, 57% of them will be obese, a new study predicts. That means that if present trends continue, an American child’s chances of having a normal weight when they grow up — or of being merely overweight — are less than even. The kids who are destined to become obese are not necessarily obese right now — in fact, most of them are not. The Harvard researchers who came up with these projections say that only half of these kids will be obese when they are 20 years old, while the other half will become obese during their 20s or 30s. The study results, published in Thursday’s edition of the New England Journal of Medicine, suggest that health experts have missed the big picture when it comes to childhood obesity.“Our findings highlight the importance of promoting a healthy weight throughout childhood and adulthood,” the researchers wrote. “A narrow focus solely on preventing childhood obesity will not avert potential future health damage that may be induced by the ongoing obesity epidemic.”The team, led by Zachary Ward, a decision scientist at the Harvard T.H. Chan School of Public Health, set out to answer a very specific question.“We wanted to predict for children now at a certain weight and certain age, what’s the probability that they will have obesity at the age of 35?” explained Ward, who is working on his PhD. They picked age 35 because that’s when the health problems associated with obesity — including diabetes, high blood pressure, heart disease and some types of cancer, to name a few — typically begin.

Pharmacy mistakes, importation, and how Amazon could save lives just by improving packaging and delivery - AEI -  I’ve always thought that the distribution of medicines in the US was archaic. Who can forget the pharmacist mistake of packaging the wrong medicine that without the intervention of a youthful George Bailey in “It’s a Wonderful Life” would have led to the death of a child? Yet 70 years later medicines are distributed in largely the same way. I was reminded of this problem when a friend of mine was given the wrong medicine for his condition. It was spotted by his wife, so no harm was done, but it was one of thousands of mistakes that occur every year at US pharmacies. According to one study, 11% of the mistakes led to death or serious harm.“Most mistakes are simply the result of human error,” according to Ken Baker, a Phoenix pharmacist and lawyer who analyzes and designs pharmacy quality improvement systems.“By and large, most mistakes are just through inadvertence. . . . Often two or more drugs will have similar-sounding names, or a technician simply grabs the next drug on the shelf from the one he or she intended to take.”But an FDA Drug Safety Guidance from April 2016 highlights packaging as being a critical problem.  With professional packaging and branding (of generics as well as innovator products), patients are more likely to see if the medicine is not what they were told it should be by the prescribing physician. Not all patients are lucky enough to have an attentive partner like my friend. Blister packs also reduce the chances for the pharmacist providing the wrong amount of medicine, makes it harder for illegal operators to substitute bogus products, and no doubt reduces other risks, such as contamination.Amazon has disrupted numerous businesses over the past decade and it was recently announced that it is getting licenses for pharmacy distribution in numerous states. One of the ways that Amazon could lower the problems with distribution is by adopting better packaging. Using blister packs inside well-identified card or paper boxes, as recommended by FDA, makes the most sense. Most OECD countries distribute medicines by blister pack, and indeed it is an upside of buying your medicine from overseas pharmacies. We often hear that there are risks involved in such purchases, and I’ve documented these risks many times, a few real and many imagined. But if you happen to go to a busy pharmacy with an inattentive or overworked pharmacist, you run a different and potentially fatal risk.

How Opioids Started Killing Americans - It’s been conventional wisdom for some time now that America’s opioid epidemic began at the pharmacy. Now there are numbers that put any doubt to rest.More than half of all people who succumbed to an overdose between 2001 to 2007 were chronic pain sufferers who filled an opioid prescription and sometimes even saw a doctor in the month before they died. Only 4 percent were ever diagnosed as having an abuse problem, said Dr. Mark Olfson, one of five researchers who conducted a massive study of the crisis and its causes for Columbia University Medical Center.The findings of the new study, published Tuesday in the American Journal of Psychiatry, split the epidemic into two groups: those who were diagnosed with chronic pain and those who weren’t. In the year before they died, about two-thirds of those studied were diagnosed with chronic pain and prescribed an opioid. (Many would also get a prescription for anti-anxiety drugs called benzodiazepines, which can make for a deadly combination.) The other third among those who died had no diagnosed chronic pain but became addicted to opioids in another way. “Those are different populations,” Olfson said in a telephone interview. “Understanding those things puts us in a better position to combat the epidemic.”

Kellyanne Conway Will Be White House Opioid Czar -- President Trump is finally acquiescing to his opioid commission’s recommendation that he swiftly appoint an “opioid czar” to coordinate the federal government’s response to the rapidly worsening opioid epidemic. And his pick is: Former campaign manager and West Wing strategist Kellyanne Conway, according to Buzzfeed. The pick is significant: Thanks to her frequent television appearances both now and during the campaign, Conway is one of the administration’s most visible figures. Tom Marino, Trump's previous nominee for the position, withdrew after it was revealed he pushed for a bill that made it harder for law enforcement to crack down on opioid drug manufacturers. As many are already aware, drug-overdose deaths have skyrocketed in recent years, driven primarily by opioids, particularly powerful synthetic opioid drugs that have tainted the US heroin supply and have led to an unprecedented number of accidental overdoses. Last year alone, it’s estimated that 64,000 Americans died from drug overdoses. Attorney General Jeff Sessions announced that Conway would be coordinating the opioid response effort from the White House. Of course, the position of director of the Office of National Drug Control Policy, another agency that would presumably be heavily involved in the administration's response, remains vacant since Marino withdrew his name from consideration.

Scientists zapped people’s brains with magnetic pulses and it changed their taste in music - Stimulating someone's brain with magnetic pulses is enough to change their taste in music, according to new research. Using a non-invasive technique called transcranial magnetic stimulation, Scientists managed to change the enjoyment of music felt by their subjects. Not only did the treatment alter the way participants rated music, it even affected the amount of money they were willing to spend on it. Showing that the way people value music can be changed using this technique is “an important – and remarkable – demonstration that the circuitry behind these complex responses is now becoming better understood,” said Professor Robert Zatorre, a neurologist at Canada's McGill University and senior author of the Nature Human Behaviour study. The circuitry in question is found in a part of the brain called the left dorsolateral prefrontal cortex. Previous brain imaging studies have demonstrated that stimulation of this region leads to the release of a substance called dopamine, which acts as a chemical 'reward'. Other studies have show that pleasurable music engages reward circuits in the brain. But this is the first time anyone has manipulated this circuitry to change the way people think. 

AI-controlled brain implants for mood disorders tested in people - Nature - Researchers funded by the US military are developing appliances to record neural activity and automatically stimulate the brain to treat mental illness. Brain implants that deliver electrical pulses tuned to a person’s feelings and behaviour are being tested in people for the first time. Two teams funded by the US military’s research arm, the Defense Advanced Research Projects Agency (DARPA), have begun preliminary trials of ‘closed-loop’ brain implants that use algorithms to detect patterns associated with mood disorders. These devices can shock the brain back to a healthy state without input from a physician. The work, presented last week at the Society for Neuroscience (SfN) meeting in Washington DC, could eventually provide a way to treat severe mental illnesses that resist current therapies. It also raises thorny ethical concerns, not least because the technique could give researchers a degree of access to a person’s inner feelings in real time. The scientists behind the DARPA-funded projects say that their work might succeed where earlier attempts failed, because they have designed their brain implants specifically to treat mental illness — and to switch on only when needed. “We’ve learned a lot about the limitations of our current technology,” says Edward Chang, a neuroscientist at the University of California, San Francisco (UCSF), who is leading one of the projects.

Texans with HIV cope with homes and medicines ruined by Hurricane Harvey -  "It was like 5 feet of water. We just lost everything. Cars, everything," Angelia Soloman said. The destruction included her HIV medication. When I met Soloman in Houston, it had been a month since she had taken her last HIV pill. There were just too many crises to contend with — dealing with the Federal Emergency Management Agency to rebuild her house, finding a car and enrolling her kids in another school district. Many Houstonians with HIV faced similar problems. The hurricane closed pharmacies and clinics for a week — or longer. Floodwaters ruined drugs. People who fled to other states couldn't get their prescriptions filled for HIV medicine.   As the days ticked on, many worried the amount of HIV in their blood would increase and become resistant to treatment.  Donnall Walker waited out the storm with his 12 brothers and sisters outside Houston. The 52-year-old former fashion designer left his HIV medication behind. His family's house hadn't flooded once in his lifetime and he assumed he would be back home the next day. A week later, when he finally returned, everything inside was ruined. Walker went to his pharmacy the day it reopened, but he went nearly two weeks without his HIV drugs. "On top of all this disaster, I could possibly die and have that burden on top of my family," he said. He says he feared for his life — not only from the missed doses but because HIV had weakened his immune system. "I had been in a lot of floodwaters. I didn't know if I got hepatitis," Walker said. "I didn't know what my condition was." There are some 25,000 people with HIV and AIDS living Houston and Harris County. Dr. Thomas Giordano, medical director at Thomas Street Health Center, a public clinic that offers HIV services, says it will take months to determine — through a series of blood tests — whether his patients' viral loads have been affected by the storm. Giordano says he worries most about his patients who haven't made it back to the clinic. Hurricane Harvey upended so many lives, scattering people to live with friends or family who may not know their status.

Miles From Flint, Residents Turn Off Taps in New Water Crisis -  — They found pollutants in the water at the National Guard armory in June. Then contractors showed up to test nearby residents’ wells, many of which were also tainted. Soon, people from several miles around were turning off their taps and even brushing their teeth with bottled water. Panic over the water in this part of western Michigan seems to grow by the day. The Rogue River, which runs through, tested high for contaminants this month. Days later, Gov. Rick Snyder of Michigan announced an “action team” to address the substances. Health officials say they are studying a possible cancer cluster. The source of much of the tumult: a local shoemaking company, Wolverine Worldwide, the maker of popular footwear brands like Hush Puppies and Merrell and a mainstay in this area since 1883. Decades ago, Wolverine dumped sludge and leather from its tannery in the woods around here. For years, the company and the government stayed mostly silent about the trash piles, even as developers built houses and a golf course near them and even as researchers documented serious health risks from chemicals in the sludge. Now residents say they sense grim echoes of the ongoing crisis in a different part of this state, Flint: the bottled water, the finger-pointing, the hard-to-decipher test results. And indeed, some of the same government agencies that botched the initial response to lead-tainted water in Flint three years ago are on the case here, trying to avoid past mistakes and reassure residents. Meaghan Schweinzger’s well water is among at least 30 to have been found to exceed the federal government’s recommended lifetime exposure levels for PFAS, also known as perfluoroalkyl and polyfluoroalkyl substances. She lives on the same street where Wolverine once dumped sludge that included Scotchgard, the waterproofing chemical used in Hush Puppies shoes that contained PFAS. “It keeps you up at night,” Ms. Schweinzger said. “You don’t sleep, because you’re wondering, ‘What don’t we know yet?’”

Pittsburgh’s Water System Is Why We Shouldn’t Run America Like a Business -- Pittsburgh, in an attempt to deal with entrenched infrastructure problems, turned to the private sector in 2012 when it partnered with the French management firm Veolia North America, the same water-management company that would fail to disclose Flint’s lead-contamination problem in 2015. Alongside aging infrastructure that produced frequent water-main breaks, flush and boil advisories, and wildly incorrect billing statements, PWSA was in massive debt. Veolia promised to streamline the public utility—in fact, its Peer Performance Solutions model, which embeds private-sector consultants with public-sector employees, won the company an award from the National Council for Public-Private Partnerships in 2014, a little more than a year after it began partnering with PWSA. The organization lauded Veolia for identifying $2.3 million in new PWSA revenue and $3 million more in operating savings, a move incentivized by their contract that stipulated the company could keep 40 percent of every dollar it saved the city. The Pittsburgh Post-Gazette published a glowing account of PWSA’s partnership with Veolia, despite reports that it laid off 23 employees, many of whom were longtime employees with critical institutional knowledge. The private sector had seemingly done its job, weeding out inefficiencies and saving the authority millions. But this August, a consulting group hired to assess the organization’s current state announced in a public meeting that PWSA was “a failed organization atop a dangerous and crumbling structure” with “an aging system in demonstrably worse condition than any water utility of its size in the country.” Not only that, water tests showed that since the partnership began, Pittsburgh’s water had been tainted with dangerously high levels of lead.

Why millions of Americans could be drinking bad water – BBC video - While Flint made headlines two years ago when 12 people died due to high lead levels in the city's water, more than 1,000 water systems across the US have drinking water that fails safety standards for lead. For the BBC's America First? series, the BBC's Aleem Maqbool is exploring health and social issues where the US, the richest country in the world, does not perform well in international rankings.

 Science Suggests We’re Making Fish Homicidal Through Antidepressants We Flush Into the Water -- New research has found that human antidepressant medications are accumulating in the brains of fish in the Great Lakes region. Earlier research indicates the drugs could be making fish antisocial and unnaturally aggressive.  The scientists behind the recent study, from Ramkhamhaeng University and Khon Kaen University, both in Thailand, and the State University of New York at Buffalo, looked at fish living in the Niagara River, which connects Lake Erie and Lake Ontario via Niagara Falls.  “The continuous release of pharmaceuticals and personal care products (PPCPs) into freshwater systems impacts the health of aquatic organisms,” they concluded, adding that the cause was “direct exposure” to the discharge from wastewater treatment plants. Approximately 70 percent of consumed pharmaceuticals are excreted in urine, and subsequently aren’t filtered out by municipal sewage systems, which primarily focus on removing disease-causing bacteria and solids like human excrement. So Prozac and other medications end up in the river, leaving fish and other wildlife exposed to a host of foreign chemicals.  In addition to various pharmaceuticals, the researchers found ingredients from personal care products in the bodies of all 10 species of fish they studied. One impact is on the behavior of the fish. “When fish swim in waters tainted with antidepressant drugs, they become anxious, antisocial and sometimes even homicidal,” writes Brian Bienkowski of Environmental Health News, who notes that pharmaceuticals “can alter genes responsible for building fish brains.”

Germany swings EU vote in favor of weed-killer glyphosate (Reuters) - Germany defeated its key EU ally France in a very tight vote on Monday to clear the use of weed-killer glyphosate for the next five years after a heated debate over whether it causes cancer. After months of indecisive votes among the 28 member states in Brussels, Germany, whose Chancellor Angela Merkel has yet to form a new coalition after a September election, came off the fence after abstaining in previous meetings. It said it backed a European Commission proposal against the wishes of France. The Commission, the European Union’s executive, said in a statement that 18 countries had backed its proposal to renew the chemical’s license. Nine countries were against and one abstained, giving a “positive opinion” by the narrowest possible margin under rules requiring more than a simple majority. The extension was opposed by Germany’s center-left Social Democrats (SPD), with which Merkel is expected to launch exploratory talks this week on renewing their “grand coalition” after plans for an alliance with two other parties failed. French President Emmanuel Macron, who was elected in May on a platform of pursuing deeper EU integration alongside Germany, had wanted a shorter extension and a rapid phasing out of glyphosate, which is a mainstay of farming across the continent. After the vote, he said he would take all necessary measures to ban the product, originally developed by Monsanto, as soon as an alternative is available and at the latest within three years. Monsanto declined to comment. 

Germany’s weed killer approval gets a withering response from its EU neighbors - European Union countries found themselves at odds on Monday over weed killer. After a long deadlock over renewing the license for pesticide glyphosate—and despite 1.3 million Europeans signing a petition to ban it—Germany cast the deciding vote, allowing it be licensed for another five years. France, Italy, Austria, and Belgium were all against it. In Germany, the Social Democrats—totally against the use of glyphosate—were furious with Angela Merkel’s Christian Democrats. They accused the German agriculture minister Christian Schmidt, who cast the deciding “yes” vote in Brussels, of going back on what they had agreed. This is bad news for Merkel, considering Germany still doesn’t have a government and these two parties—currently in a caretaker government together—are at the very early stages of thinking about forming a coalition again. The German chancellor in turn is vexed with Schmidt for okaying the pesticide-license off his own bat —and rebuked him Tuesday, saying: “Schmidt’s decision went against agreements we have made in government—these also apply to the current caretaker government.” Glyphosate is the world’s best-selling weed killer, and an active ingredient in Monsanto’s Round-Up weed killer. It was deemed “likely to be carcinogenic to humans” by the World Health Organization’s International Agency for Research on Cancer in 2015.  French president Emmanuel Macron tweeted that France will search for alternatives to glyphosate and ban it domestically within three years at most. The Italian agriculture minister Maurizio Martina said Italy would also aim to ban the herbicide within three years.

Widely used chemical may lead migrating birds astray - A new study suggests that neonicotinoids, the most commonly used class of insecticides in the world, can cause migrating songbirds to lose their sense of direction.The study, published in Scientific Reports, also linked the chemicals to weight loss among the birds.It is the first study to directly link neonicotinoids to negative impacts on migrating songbirds. Other research has suggested neonicotinoids harm bees and other wildlife.The new study analyzed the impacts of neonicotinoids on white-crowned sparrows migrating from the southern United States and Mexico to Canada.Those given doses of the equivalent of less than a corn seed became weak, stopped eating and soon lost up to 25 percent of their body weight. They could not identify north."The reason our new study is special is this is not a correlation — it is actual experimental evidence," said professor Christy Morrissey of the University of Saskatchewan. "The effects were really dramatic. We didn't anticipate the acute toxicity, because the levels [of neonicotinoid] we gave them were so low."Neonicotinoids  are found in ecosystems all over the world. Three pesticides were banned on flowering crops in the European Union in 2013. Canada is looking at a total ban.

Disrupting sensitive soils could make climate change worse, Stanford researchers find -  Nearly a third of the carbon dioxide released into the atmosphere annually can be traced back to bacteria living in the soil, where they break down plant and animal matter for energy.  For most soil microbes, this transformation requires oxygen. But a new study finds that tiny, scattered populations of bacteria living in soil are oxygen-starved and have an underappreciated effect on the amount of this potent greenhouse gas that is released into the air. The research, published Friday, Nov. 24 in the journal Nature Communications and led by Stanford’s Scott Fendorf and former postdoc Marco Keiluweit, finds that these oxygen-free pockets of soil are vulnerable to disruption from climate change and some farming practices. The scientists said this work could help in modeling future carbon emissions by giving better predictions of how much CO2 might be released from the soil. Soil contains three times more carbon than the atmosphere. Some of that carbon remains trapped underground through chemical reactions with minerals. However, most is in the form of decomposing plant and animal matter, which microorganisms break down to create energy and CO2 – the equivalent of our eating and breathing. This breakdown process normally requires oxygen, but in the small pockets of soil that lack oxygen, called anaerobic microsites, bacteria have evolved to extract energy from organic matter without oxygen, albeit less efficiently. These oxygen-starved microbes produce significantly less CO2 and are also unable to break down certain carbon-rich biomolecules such as waxes and lipids. “Anaerobic microsites play a protective role in that they preserve certain organic compounds that are abundant in soils worldwide, increasing carbon storage and decreasing CO2 emissions from soils,”

Carbon released from warming soil will accelerate climate disruption, according to a long-term study -   Jerry Melillo, distinguished scientist at the Marine Biological Laboratory at Woods Hole, describes the aim of the experiment this way: “The big question is, as the world warms, will the microbes in the soils decay soil organic matter matter more rapidly, thereby putting carbon dioxide into the atmosphere, which would accelerate warming, which would then feed back to the soil system, such that, in the end, warming would feed itself?” Melillo and his colleagues set up 18 plots of soil to study. Six of the plots received a heating cable with electricity turned on, which raised the temperature of the soil 5 degrees Celsius (about 9 degrees Fahrenheit); six plots had the cables installed, but no electricity turned on. The final six plots were laid out, but nothing was done to them. Melillo says the study's results show a considerable amount of carbon loss from the soil.  “We have reduced the soil carbon stock by about 17 percent to a depth of about a half a meter,” he says. “This is significant because that carbon goes from organic matter in the soils to CO2 in the atmosphere. By putting more CO2 in the atmosphere, we are warming the planet, and by putting CO2 in the atmosphere from warm soils, we're making the problem of climate mitigation much more difficult.” While 17 percent may not sound like much, Melillo points out that the world’s soils contain about 3,000 to 3,200 billion metric tons of carbon, according to global estimates. As a reference, the world currently emits about 10 billion metric tons of carbon into the atmosphere as CO2 from fossil fuel burning. “So, you can think about the soil carbon stores as basically being the equivalent of about 320 years of emissions of fossil fuel carbon at the rate of 10 billion metric tons per year,” he explains.

Ranchers make 'good arguments' for ownership — BLM candidate - Wyoming-based attorney Karen Budd-Falen, who is vying to lead the Bureau of Land Management, recently suggested that ranchers who believe federal grazing permits give them ownership of the land make "good arguments," but she stopped short of endorsing the concept pushed by Cliven Bundy and others.Budd-Falen, who has met with Interior Secretary Ryan Zinke and could be nominated to head BLM, made the remarks at a recent forum in Hamilton, Mont., that focused on land-use planning in Ravalli County, Mont.The Western Values Project provided transcripts and several hours of audio recordings of the event to E&E News (Greenwire, Nov. 22).During her remarks, Budd-Falen highlighted private property rights, spending several minutes discussing water rights across Western states before briefly touching on grazing permits."I know that there are scholars that argue that your grazing use on your grazing allotment is private property," Budd-Falen said. "I've heard the arguments."Budd-Falen declined to say whether she agrees, however, noting that no federal court has ruled to date on the question of whether grazing permits translate to private property rights."I think you're making good arguments, but I can't tell you that the court is going to say 'Yes' or 'No' because nobody's ever asked the question to a court to say 'Yes' or 'No.' So I'm not going to opine one way or the other," Budd-Falen said. Alec Underwood, the Montana Wildlife Federation's western Montana field representative, later asked Budd-Falen to clarify whether she would treat grazing leases as private property in the event she is confirmed to head BLM. "As director of the BLM, I don't have that authority," Budd-Falen responded. "If somebody brings a court case and it says they're private property, then I'm going to follow whatever the court tells me to do. We don't have that case yet."

Lawsuit Challenges Trump's Approval of Corporation's Plan to Drain California Desert Aquifer - Conservation and health-safety groups filed suit on Tuesday in federal court challenging the Trump administration's approval of an enormous groundwater-mining and pipeline project in Southern California. The Cadiz water project, approved without environmental review, includes the construction of a pipeline through the Mojave Trails National Monument and other public lands in the area. Tuesday's lawsuit notes that the Trump administration reversed two Obama administration decisions and wrongly concluded that the Cadiz project 's 43-mile pipeline did not require any federal Bureau of Land Management permits or approvals. The BLM is allowing the developer to build the pipeline within an existing railroad right-of-way, paving the way for Cadiz to pump 16 billion gallons of water a year from the fragile desert aquifer to sprawling new developments in Southern California. "The Cadiz project will suck the desert dry while developers count their money," said Ileene Anderson, a senior scientist with the Center for Biological Diversity . "It's an unsustainable water-privatization scheme. Pumping ancient groundwater from the Mojave Desert to water suburban lawns in Orange County will devastate desert wildlife and the entire ecosystem relying on that water for survival." If allowed to move forward, the Cadiz water-mining project would drain life-giving springs in the Mojave Trails National Monument and surrounding public lands, killing vegetation and destroying key habitat for a host of desert wildlife, including the threatened desert tortoises , bighorn sheep, Mojave fringe-toed lizards and kit foxes . Hydrologists from the U.S. Geological Survey determined that the Cadiz project is unsustainable and that the company's privately funded study vastly overstates the aquifer's recharge rate.

Spain and Portugal battling extreme drought -  Spain and Portugal are grappling with a devastating drought which has left rivers nearly dry, sparked deadly wildfires and devastated crops - and experts warn that prolonged dry spells will become more frequent. Nearly all of Portugal has suffered extreme drought conditions during the last six months, which has not happened since 2005. A majority of Spain has also received considerably less rain than it normally would. "It's a ruinous situation," said Mr Jose Ramon Gonzalez, a small rancher in Spain's normally rainy northwestern region of Galicia. Due to the scarcity of grass, Mr Gonzalez was forced to spend thousands of euros to buy fodder for his cattle in July, four months earlier than normal. "There are rivers, springs, which neither I, at the age of 45, nor my parents, nor my grandparents, have seen dry which have dried up," he said.About 1.38 million hectares of grains, sunflowers and olive trees have been affected by drought or frost in Spain as at the end of last month. The situation is just as dire for farmers across the border in neighbouring Portugal. 

Conflict and climate push 224 million Africans into hunger - U.N. - (Reuters) - The number of hungry people in sub-Saharan Africa rose by 10 percent to 224 million in 2016, largely due to conflict and climate change, the United Nations said on Thursday. Swathes of Africa have been hit by prolonged droughts and floods over the last year, worsened by lower commodity prices and a sluggish global economy, the U.N.'s Food and Agriculture Organization said. Hunger is about twice as prevalent in countries with long-running conflicts than in peaceful nations, it said. Famine struck in parts of South Sudan in 2017 while warnings were sounded in Nigeria and Somalia. Africa is highly vulnerable to climate change due to its poverty and reliance on rain-fed agriculture, experts say. Global hunger levels rose in 2016 for the first time in more than a decade to 815 million people or 11 percent of the world's population.

In Peru’s deserts, melting glaciers are a godsend (until they’re gone) — The desert blooms now. Blueberries grow to the size of Ping-Pong balls in nothing but sand. Asparagus fields cross dunes, disappearing over the horizon. The desert produce is packed and shipped to places like Denmark and Delaware. Electricity and water have come to villages that long had neither. Farmers have moved here from the mountains, seeking new futures on all the irrigated land. It might sound like a perfect development plan, except for one catch: The reason so much water flows through this desert is that an icecap high up in the mountains is melting away. And the bonanza may not last much longer. “If the water disappears, we’d have to go back to how it was before,” said Miguel Beltrán, a 62-year-old farmer who worries what will happen when water levels fall. “The land was empty and people went hungry.” In this part of Peru, climate change has been a blessing — but it may become a curse. In recent decades, accelerating glacial melt in the Andes has enabled a gold rush downstream, contributing to the irrigation and cultivation of more than 100,000 acres of land since the 1980s. Yet the boon is temporary. The flow of water is already declining as the glacier vanishes, and scientists estimate that by 2050 much of the icecap will be gone. 

Floods, Droughts, and India’s Uncertain Climate Future - Legend has it that during the 90 days of monsoon in Bihar, one of the largest and most densely populated states in India, an overflowing river wouldn’t dare touch the pole outside a rural house, where cattle would be tied. The water would stand still just for two-and-a-half days, and this would happen several times during the 90-day monsoon period. It was beneficial to the crops, especially paddy: around the last week of September or first week of October, the paddy would be transplanted. The excess moisture would enable the cultivation of rabi (winter) crops, thus allowing for successful multi-cropping. During the monsoon itself, there would be fish and edible water flowers. A field was thus never barren or empty. Until about 25 years ago, the rural and agrarian residents of Bihar welcomed this inundation of river water. The older generation would experience saah only about once in their lifetime. However, in the last two decades saah and pralay have been unwelcome annual guests, with rain water standing still throughout the 90 days and not just in different bursts of two-and-a-half days. This year, floods in Bihar killed 370 people and rendered more than 12 million homeless. And this unpredictable pattern of heavy rains, stagnant water, and flooding during non-monsoon months has been constant evidence of climate change in India. Equally rearing its ugly head is drought: nearly 25 percent of districts across India experienced heavy rainfall in just a matter of hours, even as 40 percent of districts faced drought this year. In the north, Chandigarh – the city planned by Le Corbusier – had a rainfall deficit till August, and then received 115 mm of rain in 12 hours, submerging it. Tech city Bengaluru faced a similar drowning fate, receiving 30 percent of its annual rain in a single day. The tourist destination in the arid western state of Rajasthan received half of its annual rain in two days. In the northeast, Agartala received more than 11 times its average daily monsoon rain of the last five years. Similarly, the financial capital of Mumbai on the western coast received 300 mm of rain – 15 percent of its annual rain – across a few hours. In all, the country had 16 extremely heavy rain events (rainfall over 244 mm in a day) and 100 heavy rain events (rainfall between 124 to 244 mm in a day). In each of these instances, life came to a standstill, and for long periods. However, the rain is recorded as normal, ignoring that the total amount of rain was not spread through the monsoon months of June to September.

Zinke Proposes New National Monument in His Home State But Wants to Shrink Them Elsewhere -- Interior Sec. Ryan Zinke wants to reshape and repurpose 10 national monuments for drilling, logging and other commercial activities, but you wont see the same recommendations for existing monuments in Montana—Zinke's home state. Notably, if the former Congressman's plans take shape, Montanans might even find themselves with a new, 130,000-acre national monument in their state. Tucked in the second-to-last page of the interior secretary's review of national monuments over the summer was the suggestion of creating three new monuments, including the Badger-Two Medicine area next to the Blackfeet Nation reservation by Glacier National Park in Montana. National Parks Conservation Association spokesman Michael Jamison said it was confusing that Zinke is recommending protection for the Badger-Two Medicine while proposing to shrink other national monuments. "Everyone is grateful to see Secretary Zinke paying attention to permanent protection of the Badger-Two Medicine," Jamison told the Missoulian in September. "But it's not acceptable to propose monument protection of the Badger while at same time proposing to strip protections from Bears Ears and other sacred places for Native Americans. If monuments aren't permanent, we don't want monument status. If it's so transitory and impermanent it can be undone by the stroke of a pen in some future administration, it's not permanent protection."  The Badger-Two Medicine area of Montana's Rocky Mountain Front has been threatened by oil and gas development for decades, according to the Wilderness Society . National monument status would give it protection from new development.   Land Tawney, head of the Montana-based Backcountry Hunters and Anglers , told the national radio station that Zinke wants to create a new monument due to political aspirations.  "I think the secretary has talked about wanting to come back to Montana after he's done being secretary and potentially run for governor," Tawney said.  Zinke has also called for mining bans near Yellowstone National Park.

Trump to Gut Bears Ears by 85%, Grand Staircase-Escalante by 50% on Monday -- President Donald Trump is expected to order a significant downsizing of two national monuments in Utah next week, a move environmentalists have condemned as the "largest rollback of federal land protections ever."  According to leaked documents obtained by the Associated Press , the president plans to shrink Bears Ears National Monument by nearly 85 percent and reduce Grand Staircase-Escalante National Monument by almost half. The plan would gut the 1.35 million-acre Bears Ears to only 201,397 acres and the 1.87 million-acre Grand Staircase-Escalante to just 997,490 acres. This is a collective loss of more than two million acres of formerly protected land. Trump, who will travel to Utah on Monday to formerly announce the decision, is making the move after Interior Sec. Ryan Zinke made recommendations to his boss to sharply downsize the two monuments. Fossil fuel-linked advocates have long targeted the areas for oil, gas and coal resources within and around the monuments' boundaries. According to Zinke's leaked memo from his nationwide monuments review over the summer, Grand Staircase-Escalante sits atop "several billion tons" of coal . Coal and oil reserves also surround Bears Ears. Environmental groups and tribal le aders have responded to the Associated Press' report with sharp condemnation. The Wilderness Society and the Native American Rights Fund have released maps of the proposed land reduction.

New Trump Administration Plan for Mexican Gray Wolves Puts the 'Lobo' on Path to Extinction - The Trump administration released on Wednesday its long-overdue recovery plan for Mexican gray wolves , one of the most endangered mammal species in North America with an estimated wild population of just over 100. However, the plan charts a course for extinction rather than recovery, cutting off wolf access to vital recovery habitat and failing to respond to mounting genetic threats to the species. "It's a 'recovery plan' in name only. Without additional habitat and greater genetic diversity, the wolves will continue to teeter on the brink of extinction. The plan provides none of these essential needs," said Heidi McIntosh, an attorney with the nonprofit environmental legal organization, Earthjustice , which sued the federal government on behalf of conservation organizations. The Trump administration refused to listen to the tens of thousands of people who asked them to fix their awful draft plan before finalizing it. Among the people who weighed in asking for stronger protections for the wolves were concerned citizens, business owners and scientists. "Lobos waited decades for a plan to save them, only to be given one that does not guarantee recovery," said Bryan Bird, Southwest director for Defenders of Wildlife . "The U.S. Fish and Wildlife Service had the opportunity to build a plan on a foundation of science and conservation, but instead decided to let politics rule."  "Instead of moving forward with a plan based on legitimate, science-based recommendations, the Service collaborated exclusively with the very states that have gone to extraordinary lengths to obstruct Mexican wolf recovery," said Maggie Howell of the Wolf Conservation Center . "Critically endangered lobos deserve better."

World on track to lose two-thirds of wild animals by 2020, major report warns - The number of wild animals living on Earth is set to fall by two-thirds by 2020, according to a new report, part of a mass extinction that is destroying the natural world upon which humanity depends.The analysis, the most comprehensive to date, indicates that animal populations plummeted by 58% between 1970 and 2012, with losses on track to reach 67% by 2020. Researchers from WWF and the Zoological Society of London compiled the report from scientific data and found that the destruction of wild habitats, hunting and pollution were to blame.The creatures being lost range from mountains to forests to rivers and the seas and include well-known endangered species such as elephants and gorillas and lesser known creatures such as vultures and salamanders. The collapse of wildlife is, with climate change, the most striking sign of the Anthropocene, a proposed new geological era in which humans dominate the planet. “We are no longer a small world on a big planet. We are now a big world on a small planet, where we have reached a saturation point,”   “The richness and diversity of life on Earth is fundamental to the complex life systems that underpin it. Life supports life itself and we are part of the same equation. Lose biodiversity and the natural world and the life support systems, as we know them today, will collapse.”  The report analysed the changing abundance of more than 14,000 monitored populations of the 3,700 vertebrate species for which good data is available. This produced a measure akin to a stock market index that indicates the state of the world’s 64,000 animal species and is used by scientists to measure the progress of conservation efforts. The biggest cause of tumbling animal numbers is the destruction of wild areas for farming and logging: the majority of the Earth’s land area has now been impacted by humans, with just 15% protected for nature. Poaching and exploitation for food is another major factor, due to unsustainable fishing and hunting: more than 300 mammal species are being eaten into extinction, according to recent research.

One Ocean, Two La Nina Forecasts: A Look Behind the Numbers - The Australian Bureau of Meteorology issued a La Nina alert Tuesday meaning conditions in the Pacific Ocean have just about reached the point where the weather-roiling phenomena is about to get cracking. But wait, just two weeks ago the U.S. said a La Nina had started. What’s behind the conflicting signals? It turns out the U.S. and Australia use different criteria to determine when one La Nina milestone is reached. For the U.S., its a drop in sea-surface temperatures of 0.5 degrees Celsius (0.9 Fahrenheit) below the 1981-2010 average. Australia waits for a 0.8 degree Celsius drop from the 1961-1991 average. And though Australia is switching to the newer temperature set, which reflects the warming of the Earth since 1961, it will still wait for a 0.8 degree drop, meaning the U.S., on occasion, will declare a La Nina before their Aussie counterparts.  The U.S. won’t be first every time because sea surface temperatures must be coupled with a reaction in the atmosphere above for a La Nina to form and begin its gradual disruption of world weather. The impacts include mild, dry winters in the U.S. South, drought in parts of Brazil and Argentina where corn and soybeans are grown, and flooding rains across parts of Australia.

The Most Expensive U.S. Hurricane Season Ever: By the Numbers - This year’s U.S. Atlantic hurricane season is officially the most expensive ever, racking up $202.6 billion in damages since the formal start on June 1.  The costs tallied by disaster modelers Chuck Watson and Mark Johnson surpass anything they’ve seen in previous years. That shouldn’t come as a complete surprise: In late August, Hurricane Harvey slammed into the Gulf Coast, wreaking havoc upon the heart of America’s energy sector. Then Irma struck Florida, devastating the Caribbean islands on the way. Hurricane Maria followed shortly after, wiping out power to all of Puerto Rico. And the season’s not over yet: It officially ends on Nov. 30.    As this devastating season draws to a close, here are a few statistics that show the extraordinary strength of this year’s storms:

  • The season delivered 17 named storms, 10 of which became hurricanes that altogether killed hundreds across the Atlantic basin. While 2005 still holds the record, with 28 storms, the intensity and dangerous paths of this year’s tropical systems caught even seasoned forecasters off guard.
  • For the first time in records, three Category 4 storms hit U.S. shores, with Hurricane Harvey becoming the first major hurricane to slam the country since 2005.
  • Harvey also set a new tropical rainfall record with just over 60 inches (152 centimeters) in Texas, according Michael Bell, a professor of atmospheric science at Colorado State University.
  • Hurricane Irma, which bowled over the Florida Keys in September before threatening Tampa, set a record by maintaining Category 5 strength for 37 hours. That broke the old mark of 24 hours set by Typhoon Haiyan, Bell said.
  • Accumulated cyclone energy, a measure of storm power and longevity, also set a record in September, according to the U.S. National Hurricane Center.
  • Worldwide, storms caused $369.6 billion of damage, the second-most costly year since 1960.

Caribbean gets $2 billion to rebuild, but US gave only $4.3 million of that -  The international community has pledged over $2 billion, almost half in loans and debt relief, to help rebuild the Caribbean islands decimated by this year's string of hurricanes. The pledges came from some familiar donors and some surprising new ones. They included The Netherlands' $700 million pledge, the European Union's $352 million, quake-recovering Mexico's $27 million and $1 million in debt forgiveness from politically troubled Venezuela. The two biggest surprises, however, came from the United States and Haiti, members said. The U.S., long a leading donor and supporter of the region, pledged just $4.3 million, far less than Canada's $78 million or China's $30 million. Haiti, still recovering from its own 2010 earthquake and brushes with two hurricanes, offered $250,000. "We are very touched by the contribution made by Haiti," said Roosevelt Skerrit, prime minister of hurricane-devastated Dominica. Skerrit acknowledged that the amount raised is far less than the $5 billion-plus the United Nations says is needed for the Caribbean to rebuild following the one-two punch of Irma and Maria within a two-week span in September. But he welcomed what he called "the first effort." "I am very satisfied," Skerrit said. He hopes that continued lobbying and engagement with donors will yield more contributions. According to the latest post-Irma assessment, Dominica's hurricane damage is at $1.3 billion, which is about the amount donors pledged in grants. Hurricane Maria, which struck the island after Irma, decimated decades of development gains there and damaged 60 percent of its housing and infrastructure. 

New Study: Larger, More Intense U.S. Storm Complexes on the Way -  The mammoth clusters of thunderstorms known as mesoscale convective systems (MCSs) could dump up to 80% more water across North America by late this century, according to a study published Monday inNature Climate Change. The study, “Increased rainfall volume from future convective storms in the U.S.,” found that increased atmospheric moisture in a warming climate will help lead to a 15 – 40% increase in peak MCS rainfall rates, along with a 20 – 70% jump in the rainfall area. Together, these lead to a 30 – 80% boost in the total hourly volume of rain deposited by a typical MCS. "The combination of more intense rainfall and the spreading of heavy rainfall over larger areas means that we will face a higher flood risk than previously predicted,"   Numerous studies have shown that the most intense rain events in many parts of the world, including the United States, are getting heavier, as human-produced greenhouse gases warm our climate and send more moisture from oceans into the atmosphere. The new study zeroes in on a storm type notorious for its flood risk. MCSs can occur in sequences that last for weeks, sometimes leading to disasters such as the epochal Missouri/Mississippi River floods of 1993, the most damaging fresh-water flood event in U.S. history, and the Texas/Oklahoma floods of May 2015. MCS processes can also become important after hurricanes or tropical storms make landfall, such as during the record-smashing rains of Hurricane Harvey in August 2017.     In this study, MCSs are projected to become wetter and larger across all seven North American regions outlined by the authors (including Canada, Mexico, and five U.S. regions). MCSs also become more frequent in all regions except the central U.S, with the biggest percentage increase in Canada and the northeast U.S. In those two regions, MCSs with peak rainfall rates of greater than 80 mm/hr (3.15” per hour) “are almost unrepresented in the current climate,” but they become frequent in the future, said the authors.

Oroville Dam: State official says new spillway already has cracks  - — Small cracks have appeared in a new concrete spillway at Oroville Dam, a development state officials say was expected but an engineering expert says could lead to serious safety issues. In a previously undisclosed October letter, federal regulators asked Department of Water Resources officials to explain the hairline cracks on the dam’s new massive concrete flood-control chute, KQED radio of San Francisco reported Tuesday. Get tech news in your inbox weekday mornings. Sign up for the free Good Morning Silicon Valley newsletter. The Federal Energy Regulatory Commission also asked water officials what, if any, steps might be required to address the issue. In February, authorities ordered nearly 200,000 people downstream of the dam to evacuate when both spillways suddenly began crumbling. The feared uncontrolled releases of water over the dam did not occur, and authorities allowed residents to return to their homes within days. State officials say emergency and subsequent repairs of the 770-foot dam have so far cost at least $640 million but not all costs have been identified yet. In their response to federal regulators, California water officials said in November that the state’s efforts to build a more durable spillway caused the cracks, which were anticipated. “The hairline cracks are a result of some of the design elements included to restrain the slabs and produce a robust and durable structure,” the letter read, adding that the cracking “was anticipated and is not expected to affect the integrity of the slabs.” The evidence for and reasoning behind DWR’s statements about the cause of the cracking is not available for independent assessment, the station reported. 

'Buried in marshes': sea-level rise could destroy historic sites on US east coast - Large tracts of America’s east coast heritage are at risk from being wiped out by sea level rise, with the rising oceans set to threaten more than 13,000 archaeological and historic sites, according to new research.Even a modest increase in sea level will imperil much of the south-eastern US’s heritage by the end of the century, researchers found, with 13,000 sites threatened by a 1m increase.   Thousands more areas will be threatened as the seas continue to climb in the years beyond this, forcing the potential relocation of the White House and Lincoln Memorial in Washington DC and inundation of historic touchstones such as the Kennedy Space Center and St Augustine, Florida, which lays claim to being the oldest city in the US. “There are going to be a lot of cultural sites lost and the record of humanity’s history will be put at risk,” said David Anderson, a University of Tennessee anthropologist who led the published research.  “Some sites will be destroyed, some buried in marshes. We may be able to relocate some. In some places it will be devastating. We need to properly understand the magnitude of this.” Threatened areas, including locations on the national register of historic places, include Native American sites that date back more than 10,000 years, as well as early colonial settlements such as Jamestown, Virginia and Charleston, South Carolina. Researchers pinpointed known sites using topographical data and analyzed how they would fare in various sea level rise scenarios. Florida, which has a southern portion particularly vulnerable to sea level rise, has the most sites in danger from a 1m raising of the oceans, followed by Louisiana and Virginia.

A poison in our island - - Rising seas caused by climate change are seeping inside a United States nuclear waste dump on a remote and low-lying Pacific atoll, flushing out radioactive substances left behind from some of the world's largest atomic weapons tests."We call it the tomb," says Christina Aningi, the head teacher of Enewetak's only school. "The children understand that we have a poison in our island."   They were born decades after the last nuclear explosion ripped through the warm Pacific air with a thunderous roar.   But those old fears, thought to be long buried, are threatening to reawaken in their island paradise. On an atoll in the far-flung west of the Marshall Islands, halfway between Australia and Hawaii, sits "the dome". Approaching from the water, it's hard to appreciate the true scale of the concrete vault, with its shallow profile obscured by palm trees and scrub. But from the air it looks like a giant flying saucer has crashed on the tip of a deserted island. Buried beneath this vast disc is 85,000 cubic metres of radioactive waste — a toxic legacy from the dawning of the thermonuclear age. In the late 1970s, Runit Island, on the remote Enewetak Atoll, was the scene of the largest nuclear clean-up in United States history. Highly contaminated debris left over from dozens of atomic weapons tests was dumped into a 100-metre wide bomb crater on the tip of the uninhabited island. US Army engineers sealed it up with a half-metre thick concrete cap almost the size of an Australian football ground, then left the island. Now with sea levels rising, water has begun to penetrate the dome.

A Tiny Island Used as a Nuclear Dumpsite Is About to Be Submerged by Water -- The Enewetak Atoll is all but invisible on Google Maps. Halfway between Australia and Hawaii, the ribbon of land is home to a small indigenous population that has seen their way of life eroded by decisions far outside of their control. For more than half a century, the atoll, which is part of the Marshall Islands, has been contaminated by nuclear explosions and waste, according to ABC Australia. The decades ahead could leave it submerged by rising sea levels.  ABC Australia reported the main holding container for the atoll's nuclear waste is being compromised by rising waters. The atoll's problems began in the 1940s and 1950s when the U.S. began using it for nuclear bomb tests. The people of Enewetak were evacuated and 67 nuclear bombs were dropped, devastating wildlife, spreading nuclear toxins far and wide, and creating massive craters. One of those craters was on Runit Island. In the late 1970s, the U.S. began to partially clean the nuclear waste from the island. Some of the radioactive chemicals had relatively short half-lives, Michael Gerrard wrote in an op-ed, and were left to naturally decay despite their risks. Another toxin, plutonium-239, has a half-life of 24,000 years and had to be dealt with. The 100-meter wide crater on Runit Island was deemed a good place to dump as much soil contaminated with plutonium as possible. Chunks of unexploded plutonium-239 were also disposed of in the hole. When the cleanup was finished—far below standards that would be deemed sufficient in the U.S., according to Gerrard—a massive concrete shell was built to cover the hole. No reinforcements were made to the bottom and sides of the hole, meaning the waste directly interacts with the soil and a dumpsite for radioactive waste fails to meet standards for normal trash landfills, Gerrard said. 

Fashion Industry Report: One Truckload of Clothing Is Wasted Per Second - According to a new report from the Ellen MacArthur Foundation , the fashion industry's current "take-make-dispose" system creates greenhouse gas emissions of 1.2 billion tonnes a year—that's "more than those of all international flights and maritime shipping combined."  Alarmingly, the negative impacts of the fashion industry are set to drastically increase. "If the industry continues on its current path, by 2050, it could use more than 26 percent of the carbon budget associated with a 2°C pathway ," the report warns, referencing the threshold for avoiding dangerous global warming .  The report was produced by the Circular Fibres Initiative (which aims to build a circular economy for textiles starting with clothing) and was co-launched Tuesday by retired English sailor Ellen MacArthur and fashion designer Stella McCartney.   Here are some highlights from the report:

  • Every second, the equivalent of one garbage truck of textiles is landfilled or burned.
  • An estimated $500 billion value is lost every year due to clothing that's barely worn and rarely recycled.
  • Less than one percent of material used to produce clothing is recycled into new clothing.
  • Worldwide, clothing utilization—the average number of times a garment is worn before it ceases to be used—has decreased by 36 percent compared to 15 years ago.
  • Clothes release half a million tonnes of microfibers into the ocean every year, equivalent to more than 50 billion plastic bottles.

McCartney, a prominent advocate of the green fashion movement, criticized the fashion industry for being "incredibly wasteful and harmful to the environment."

Reduce, Reuse, Recycle: Why Burning of Fast Fashion Clothes to Fuel Power Plant is Troubling -  Jerri-lynn Scofield -  Several  news outlets picked up on a Bloomberg story last week, touting the benefits of burning H & M clothes rather than fossil fuels to supply a Swedish power plant.As Bloomberg reports in A Power Plant Is Burning H&M Clothes Instead of Coal: Burning discarded clothing from retail chain Hennes & Mauritz AB is helping a Swedish power plant replace coal for good.The combined heat and power station in Vasteras, northwest of Stockholm, is converting from oil- and coal-fired generation to become a fossil fuel-free facility by 2020. That means burning recycled wood and trash, including clothes H&M can’t sell.“For us it’s a burnable material,” For starters, making these clothes consumes fossil fuels, as well as often consumes massive amounts of water.  Moving away from fast fashion– and other wasteful consumption patterns– toward more sustainable practices, appears to be a necessary step toward mitigating climate change.Additionally, as Oilprice.com reports in Sweden Burns H&M Clothes As Fuel, clothes and other non-fossil fuels are shipped from countries, to the Swedish plants– thus no doubt requiring the use of fossil fuels to transport this “waste”. A further problem is that the burning clothes generates its own waste– that includes hazardous components, which must be disposed of in landfills:As of 2013, Sweden was importing rubbish from other countries in order to feed its hungry waste-to-energy incineration power plants. Each year the Scandinavian country imports 80,000 tons of garbage, mostly from Norway, to fuel homes and businesses. Norway pays Sweden to take away its excess refuse. Sweden then burns it to create electricity and heat, and then sends the ashes left behind by the incinerated waste, and which contain many highly polluting toxins, back to Norway for disposal in a land fill. Note that the transport of the incinerated waste back to the country of origin itself consumes even more fossil fuels. This environmental cost will likely increase, as Sweden looks farther afield for fuel for its incinerators.

 China Limits Waste. ‘Cardboard Grannies’ and Texas Recyclers Scramble —   Since the 1990s, the world has shipped its waste paper, discarded plastic and unwanted metals to China, where they are destined to be used as raw materials to help power the country’s export-driven manufacturing boom. In 2016, China imported about $18 billion worth of what the government calls solid waste. But China doesn’t want to be the rest of the world’s trash can. Over the summer, regulators in Beijing started an unusually intense crackdown on what they called “foreign garbage,” citing health and environmental concerns.As with so much else in the global economy, China’s decision is rippling through a vast supply chain that stretches from big waste companies in Texas to the “cardboard grannies” in Hong Kong like Ms. Leung that pick through mounds of paper and plastic. Scrap dealers are rushing to find buyers elsewhere in Asia, but the Chinese market is so large that it cannot be easily replaced. “It’s almost like they turned the spigot off overnight,” said Jim Fish, the president of Waste Management, a Houston-based company that is the largest recycler of residential waste in North America.As China revved up its manufacturing machine to power growth over the years, officials were willing to tolerate some of the downside of scrap, namely the pollution of local soil and rivers by low-end recycling practices. But China’s economic might increasingly means that it no longer needs to make such environmental sacrifices. Fears of widespread domestic pollution were amplified by “Plastic China,” a recent documentary film about a bleak town in the eastern province of Shandong where people earn their living by picking through scrap plastics and processing them in machines that belch black smoke. The film went viral in mainland China in January before disappearing from the internet there.

This is where all the plastic in the ocean is going -- There are five trillion pieces of plastic in the world’s oceans, weighing a total of 268,000 tonnes. That’s according to a paper by an international team of scientists who took a substantial amount of data collected across the globe and merged it with ocean circulation models to come up with the staggering figure. That sounds like a lot of plastic – it is a lot of plastic – but it isn’t distributed quite as most people would imagine.  First of all, the way a Pacific Garbage Patch has been reported by some newspapers is largely a myth. No, you can’t see the garbage patch from space – the “garbage” in question is usually many small particles.  The plastics in the ocean can remain as recognisable objects – fishing nets, plastic bottles, bags – but much of it mechanically breaks down to small particles, many a fraction of a millimetre across, which explains the large numbers involved. Though previous studies found plastic isn’t restricted to ocean gyres, the latest paper is one of the first to bring the research together to produce a global estimate. The major gyres of the oceans are found in the north and south Atlantic, the north and south Pacific, and in the Indian Ocean. However, the gyres aren’t closed off and, in the several years it takes a piece of plastic to complete a circuit, there is a 20-30% chance of it spinning out into other parts of the ocean.  In 2010 I undertook some research in the Arctic Ocean, north of the Svalbard archipelago, the northernmost permanently inhabited place on earth.  On a remote island, more than 1,000 km away from any moderately sized village or town we collected a large box full of plastic debris from one 10 square metre section of beach, which included the box itself. Our finds included plastic bags and bottles from the US, Canada, the UK, France, the Netherlands and Norway.

Ocean acidification: climate change's evil twin - Life on Earth began at sea. Over the billions of years since, the oceans have sustained a myriad of species, from world's biggest mammals to the psychedelic profusion of life that makes up a coral reef.  But since the industrial revolution, the waters that cover more than two-thirds of our planet's surface have become increasingly hostile to their inhabitants.Overfishing, plastic pollution and warming waters all make it harder for marine life to survive.But now, perhaps the biggest threat is also one of the most insidious effects of the carbon we pump into the atmosphere – ocean acidification.Ulf Riebesell at the GEOMAR center for ocean research in Kiel explains that oceans absorb up to quarter of carbon emissions. "The CO2 reacts with the seawater to form carbonic acid. The more CO2 the ocean takes up, the more acidified it gets," he says. Riebesell calls ocean acidification global warming's "evil brother" because the two are inextricably linked. Normal levels of CO2 reacting with seawater would present no problem. But atmospheric levels of CO2 have not been normal for some time – and hit a record high in 2016, according to the World Meteorological Organization. That's bringing ocean acidity to dangerous levels, too. "Acidification continues, but also the ocean loses what we call its buffer capacity," Riebesell says. "The more acidified it gets, the less CO2 it actually takes up." With the oceans absorbing less CO2, more is left in the atmosphere, accelerating global warming, in a lose-lose situation for both the seas and the atmosphere. Healthy seawater has an average pH-level of 8.2. Since the industrial revolution it has fallen to 8.1. That might not sound like much, but it represents a full 26-percent drop from pre-industrial levels.

Transportation is now the biggest source of US CO2 emissions - For years on TreeHugger we have written that, while green building is important, how you get to your green building is even more so. Now, for the first time in decades, more carbon dioxide is being generated by transportation than is produced by generating electric power. How you get there matters more than ever.  The CO2 from electricity generation is down for a number of reasons; the biggest is the shift from coal to natural gas, which produces less CO2 per unit of energy generated. Also, heating takes more energy than cooling, and the weather has been getting warmer. According to the EIA, "Heating degree days in 2016 were the second fewest of any year since at least 1949, consistent with relatively warmer winter months." And of course, there has been a bit more renewable power. Meanwhile, the CO2 from transportation goes up because gas is cheap, people are driving more and they are buying more SUVs and pickup trucks. So the good news is that as we switch to electric cars, things will get better, right? As Sami has noted, Electric cars are greener than gas, literally everywhere, even where the electricity comes from coal. Climate Central tells us that "a typical gasoline-powered passenger car emits 20 pounds of carbon dioxide for each gallon of gas burned, or about a pound for each mile traveled, and both electric and hybrid vehicles can cut back on those emissions." And then you find out that the car manufacturers are working hard to roll back CAFE rules so that they can sell more big SUVs and pickups. According to Influence Map, a site that studies lobbying: The pattern of lobbying suggests an opportunistic effort from US auto lobby groups, particularly the Alliance of Automobile Manufacturers (AAM), to sway the regulatory regime on behalf of members GM, Ford, Toyota, FCA and others. This lobbying activity by the AAM contrasts significantly with the top line statements from many of these member companies on climate change.

Huge wildfires can wipe out California’s greenhouse gas gains - Most years, the amount of greenhouse gases spewed by California’s cars, factories and power plants drops slightly — a hard-won result of the state’s fight against global warming. And in any given year, one big wildfire can wipe out that progress. Over the course of just a few weeks, a major fire can pump more carbon dioxide into the atmosphere than California’s many climate change programs can save in 12 months. Scientists debate whether California’s vast forests are emitting more carbon dioxide through fires than they absorb through plant growth. As global warming raises temperatures, making fires like the ones that tore through the Wine Country last month more likely, it could turn into a vicious cycle. “That’s the reality, as painful and ugly as it may be,” said Jim Branham, executive officer of the Sierra Nevada Conservancy, a state agency charged with protecting the ecological and economic health of the Sierra region. “The sooner we get people looking at that reality, the sooner we can address it.” To get a sense of the problem, look at 2015. Greenhouse gas emissions across the California economy inched downward by 1.5 million metric tons that year, the most recent for which emissions data are available. And just one fire in 2015 — the Rough Fire, in the foothills of Fresno County — produced 6.8 million metric tons of greenhouse gases, according to an estimate from the U.S. Forest Service. Other fires that year on federally managed land within California emitted 16 million metric tons. And 2015 was not an isolated case. In 2013, for example, the state’s economy cut 3.89 million metric tons of emissions, while wildfires produced as many as 22.4 million metric tons, according to the Forest Service. The Rim Fire alone, started near Yosemite National Park that August by a runaway campfire, emitted between 10 million and 15 million metric tons. The Rim Fire burned 257,314 acres of forest. For comparison, this year’s Wine Country fires together burned about 210,000 acres of forest, grassland, vineyards and urban neighborhoods.

New Zealand Fault Line Wakes Up: "We Need To Think Japan 2011 Ruptures" - A 2016 earthquake has awoken a fault line that was thought to be dormant. Now that it’s becoming active, fears have arisen that New Zealand could be destroyed by a massive 9.0 magnitude earthquake. The devastating Kaikura earthquake in 2016 has resurrected the Hikurangi subduction zone where two tectonic plates clash and one is pushed down. Geologists are now warning that this trench could cause a massive earthquake on the ocean floor, and could trigger other 9.0 magnitude earthquakes and tsunamis that will reach the western coast of the islands in just seven minutes.The Australian plate is heading north while the Pacific plate is heading west, and the combination of these motions means that the Pacific plate, which includes much of the South Island, is moving relative to the Australian plate at a rate of about 40millimeterss each year in a southwesterly direction.Ursula Cochran, from the science firm GNS, told The Marlborough Express:“We need to think Japan 2011 basically, because if our whole plate boundary ruptured it would be a magnitude-9 earthquake.”The Great East Japan Earthquake and resulting tsunami smashed through the country’s north-eastern coast killing almost 16,000 people and destroying the lives of thousands more. It also triggered a major ongoing crisis at the Fukushima nuclear plant. “One of the biggest hazards of that kind of earthquake is the tsunami that is triggered by a fault rupture offshore.,” Cochran added.

Bali raises volcano alert to highest level - An eruption could be imminent at a volcano belching huge plumes of smoke on Indonesia's resort island of Bali, officials warned Monday, as they raised the alert to the highest level and expanded the exclusion zone. Massive columns of thick grey smoke have been pouring out of Mount Agung since last week and they shot more than two miles (three kilometres) into the sky early Monday, prompting the island's international airport to be closed, leaving thousands of tourists stranded. Agung started rumbling again last week and so-called cold lava flows appeared Monday -- they are similar to mud flows and are often a prelude to the blazing orange lava seen during many volcanic eruptions. "The volcano's alert level has been raised to the highest level," said senior state volcanologist Gede Suantika. "Constant tremors can be felt." Mt. Agung last erupted in 1963, killing about 1,600 people, one of the deadliest eruptions in a country that has more than 120 active volcanoes. The exclusion zone around Agung, which is 75 kilometres (47 miles) from the tourist hub of Kuta, has been widened to 10 kilometres, with people living in that area being urged to evacuate. About 25,000 people living nearby the mountain have already left their homes and evacuated since Agung first started to spew smoke on Tuesday.

 Bali volcano: Mt Agung ash shuts airport for second day - BBC News: Indonesian officials have shut the international airport in Bali for a second day, as Mount Agung spews volcanic ash into the atmosphere. Massive plumes of dark ash were seen reaching as high as 3km (2 miles) above the summit of the rumbling volcano, which began erupting last week. Officials raised the alert to the highest level on Monday, fearing an imminent major eruption. Up to 100,000 people have been ordered to evacuate the vicinity. Volcanic ash can damage aeroplane engines or even cause them to fail, and also clogs fuel and cooling systems. Pilot visibility can also be hampered. Sutopo Purwo Nugroho, spokesman for Indonesia's national disaster agency, said that the ash was being drawn southwest - towards Bali's main airport - by a tropical cyclone in the Indian Ocean.  The airport on neighbouring Lombok island however has been re-opened, he added. Authorities have also arranged for buses to take tourists to ferry terminals.The volcano is about 70km from the popular tourist areas of Kuta and Seminyak.The disaster agency said in a separate statement (in Indonesian) that as of Tuesday morning, the volcano was still emitting thick ash clouds and that "rays of flares from the glowing lava" were also observed overnight. Besides ash, streams of rock mixed with water known as lahar have also been spotted flowing down from the mountain. Officials have warned people to stay away from them.

What Bali’s volcanic eruptions could mean for the climate - Indonesia’s Mount Agung has played a game of will it/won’t it erupt for months with swarms of earthquakes and occasional ash plumes. That game ratcheted up a notch this weekend when much larger ash cloud shot into the atmosphere and lava made its way to the surface. The dual-colored plume of ash rose up to 30,000 feet into the sky, making for spectacular images, but scientists are still gathering data to see if it will lead to something bigger. If the volcano does become more active, it could do more than cancel flights and incinerate rainforests. It could give the world a brief reprieve from the planetary heat wave of global warming. The big question is if this weekend’s eruption is a precursor to something on the level of the 1963 eruption that killed 1,000 or if the volcano will lapse back into brooding over the idyllic Balinese landscape. At the moment, Indonesia’s Center for Volcanology and Geological Hazard Mitigation has raised its warning level to red, its highest alert, and evacuated more than 75,000 people living in the volcano’s shadow.If it proceeds to a major eruption (and please remember that’s a big if), the effects on the climate could be fairly substantial.Explosive volcanic eruptions can send ash plumes high into the stratosphere. In the immediate vicinity, the ash can fall back from the sky and cause breathing problems or dangerous mud flows if it mixes with rain. But tiny particles of sulfur dioxide in the plume can also linger in the stratosphere. There, they reflect sunlight back into space and cool the climate for a few years before falling back to Earth.Large eruptions can also slow other aspects of climate change. Research published last year shows that the 1991 eruption of Mount Pinatubo in the Philippines cooled the oceans enough to momentarily depress sea level rise rates.But all of these impacts depend on sulphur dioxide reaching the stratosphere. While satellites have shown sulphur dioxide in Agung’s ash cloud, the cloud is only about halfway to the stratosphere at this point. That means its climate impact is negligible so far. But if the ash cloud rises higher and becomes more potent, its climate impacts would be felt fairly quickly.

Monster heat wave reaches Greenland, bringing rain and melting its ice sheet - It’s been unusually warm in the United States in recent days, with records being set across the country. But it’s been scorching in Greenland, with temperatures as much as 54° above normal, which means above freezing in many places. And this comes on the heels of new research from NASA’s aptly-named Oceans Melting Greenland (OMG) mission, which finds that the enormous ice sheet is far more unstable than we realized. That’s bad news because the Greenland ice sheet contains enough land-locked ice to raise sea levels by over 20 feet. The heat wave began out west last week, with large parts of California sweltering in the 90s. As but one example, the National Weather Service Los Angeles tweeted on Nov. 22 that the 99°F reading at Camarillo Airport in Ventura County not only broke the record for that day (by 9°F), but broke the record for any day that month. The heat wave moved east after Thanksgiving, and by Tuesday it was blanketing most of the country, as meteorologist and Grist writer Eric Holtaus pointed out on Twitter: in a place like Greenland, a monster heat wave this time of year pushes temperatures above freezing. It hit the upper 30s in many coastal towns — with rain forecast in some — which means actual melting over parts of the great ice sheet that should be adding ice right now, not losing it. The bottom line is that over half of the entire ice sheet may be at risk from this underwater melting. We knew that global warming is leading to more of the kind of monster heatwaves that intensify and extend the surface melt season on Greenland — the kind it is now experiencing. But we are learning that global warming poses a potentially larger risk to underwater melt from warming ocean waters.

Arctic sea ice hits record lows off Alaska -  When Arctic sea ice extent hit its annual low-point for the year in September, it clocked in at the eighth lowest on record—far better than had been feared in projections earlier in the year. But that ranking doesn't tell the whole story.As we enter December, the Chukchi and Bering Seas, which border Alaska on its western and northern sides, have unprecedented areas of open water and the least amount of ice ever recorded there."Certainly we've never seen anything quite like this before," said Mark Serreze, the director of the National Snow and Ice Data Center.In recent years, the Chukchi Sea has reached 95 percent coverage about 2.5 weeks later than it did in the late 1970s, when satellites first started recording sea ice. This year, according to Rick Thoman of Alaska's Weather Service, it's falling even further behind. "The thing is, we saw this coming," Serreze said. Last year, he co-published a study in the Journal of Geophysical Research that found that the timing of when warm water flows from the Bering Strait up to the Chukchi Sea is a strong indicator of how the sea ice will fare.  Early this summer, scientists aboard the research vessel Norseman IIfound an influx of warm, Pacific water near the Bering Strait about a month earlier than usual and measured water temperatures as high as 5 degrees Fahrenheit above the historical average. "There's just a hell of a lot of heat there," Serreze said.

The fate of Pine Island and Thwaites glaciers in Antarctica is in the balance — and so is that of all our cities - TWO enormous glaciers could soon irrevocably reshape our future. They’re melting. They’re fragmenting. And a cataclysmic collapse of an entire Antarctic ice sheet may be just decades away. PINE Island. Thwaites. These two names are likely to become increasingly familiar in future years. They’re among Antarctica’s biggest and fastest-melting glaciers. But what makes these different is that they’re fed from ice sitting on solid ground. This ice does not displace the ocean. That means all the water that melts off them must be added to the total mass forming the world’s seas. Current calculations put that at roughly 3.4 meters [11 feet]. According to US meteorologist Eric Holthaus, that’s enough to inundate every coastal city on our planet. “There’s no doubt this ice will melt as the world warms,” Holthaus writes. “The vital question is when.” And that’s the thing. Scientists used to think it would take thousands of years for Antarctica’s ice sheets to melt under a warming atmosphere. But new evidence shows it could happen within a few decades. 

The sea level threat to cities depends on where the ice melts — not just how fast - The world's oceans are rising. Over the past century, they're up an average of about eight inches. But the seas are rising more in some places than others. And scientists are now finding that how much sea level rises in, say, New York City, has a lot to do with exactly where the ice is melting. To understand why, think of the earth as a spinning top. When huge ice sheets — some are two miles thick — start to melt, it actually affects the Earth's rotation. "What happens is when you change the mass of the ice," explains Eric Larour, who studies the frozen parts of the planet, "the modification itself makes the wobble change, and this in turn changes the shape of the ocean on the Earth." When the wobble shifts, the oceans shift as a whole, as if you were shaking a mound of Jello at the Thanksgiving table. That's part of the story, but something else happens too. Many ice sheets and glaciers are so massive, they produce a significant gravitational field, almost as if they were small versions of the moon. The force is tiny, but it does attract nearby ocean water. "So what happens when the ice melts," says Larour, "is that there is less of it, so the ocean recedes away from the mass of ice."  Larour's team at NASA's Jet Propulsion Lab has mapped how changes in these giant ice fields influence sea levels both nearby and thousands of miles away. They published their results in the journal Science Advances. For example, the ocean along Norway's coast could actually drop a tiny bit if nearby ice sheets in eastern Greenland melt. Meanwhile, those Greenland ice sheets could raise sea levels by inches on the other side of the planet — in places like Tokyo.

Giant West Antarctic iceberg disintegrates - Satellite images revealed a 100-square-mile iceberg calving from Antarctica's Pine Island Glacier (PIG) in September. The calving event did not come as a complete surprise, but is a troubling sign for future sea-level rise. Scientists expected the iceberg to drift far out into the Southern Ocean before breaking up. However, it got stuck, probably impeded by thick sea ice, before it started to disintegrate into many smaller icebergs.Dr Robert Larter, a marine geophysicist at British Antarctic Survey, who flew over the PIG rift last season during his research cruise with the German Alfred Wegener Institute, explains:"What we're witnessing on Pine Island Glacier is worrying. We're now seeing changes in the calving behaviour of the ice shelf, when for 68 years we saw a pattern of advance and retreat resulting in the calving of a single large iceberg which left the ice front to approximately the same place. The calving of icebergs in 2001, 2007 and 2013 are well-documented. Each calving event returned the ice front to more or less the same position and the ice shelf flowed into the sea again. But with continuing thinning it was clear that sooner or later there would have to be a change to this pattern – and this is what we are witnessing now. Pine Island Glacier is the fastest melting glacier in Antarctica—one that's responsible for a quarter of the frozen continent's ice loss, around 45 billion tons of ice each year. Satellite images taken since 26 September show an open-water gap emerging between the ice shelf and the iceberg, which is about two thirds the size of the Isle of Wight (103 square miles or 267 square km).

How soon will the 'ice apocalypse' come? -- I’ve been gripped by the story of Antarctic ‘ice cliff instability’ ever since Rob DeConto and Dave Pollard published their controversial predictions last year. They suggested disintegration of ice shelves caused by global warming could leave behind coastal ice cliffs so tall they would be unstable, crumbling endlessly into the ocean and causing rapid, sustained sea level rise.   In late 2015, Catherine Ritz and I co-led a study about the future of Antarctica, and our predictions – though definitely bad news – were far less dire. So what evidence do we have that the Antarctic ice sheet could, or would, collapse this century?   First, it’s important to map out what is known. Yes, the Antarctic ice sheet is vulnerable to global warming. Not because it will melt in the warm air like an ice cube, but because the ice shelves around the coastlines act as bracing for the glaciers. When the surface of an ice shelf melts it can disintegrate, and the flow of ice into the oceans can speed up: we saw this for Larsen B in 2002. Our greenhouse gas emissions make this more likely.  Yes, scientists have proposed that disintegration of ice shelves could trigger two types of ‘instability’ that may have caused the ‘marine’ parts of the Antarctic ice sheet (lying on bedrock below sea level) to drastically reduce in the past, raising sea levels by several metres. Confusingly, these are named ‘marine ice sheet instability’ and ‘marine ice cliff instability’. Broadly speaking, both are based around the idea that the thicker the edge of the ice sheet, the faster ice can be lost into the oceans. Both may be ‘positive feedbacks’: in other words, self-sustaining. The marine parts of the ice sheet are thicker in the middle than at the edges, so once these proposed instabilities started, they would keep going until they ran out of ice. As Eric says, this would be over three metres worth of sea level rise.  But there is little consensus in the scientific community about how this ice cliff instability could behave. That’s because there is a big leap from identifying a potential problem and predicting the real world consequences. Iceberg scrape marks, though important, can’t tell us how soon, how fast, or for how long.

Study: Arctic warming rate higher than previously thought   (AP) — The Arctic warmed at a higher rate than previously estimated, according to a new study refuting the concept of a climate change hiatus between 1998 and 2012. In a new study published in the peer-reviewed scientific journal Nature Climate Change, scientists analyzed temperature data collected from buoys drifting in the Arctic Ocean to create a more accurate average. Previous gaps in the Arctic temperature data may have contributed to the idea that warming had slowed, the Fairbanks Daily News-Miner reported . Scientists collected the new data set of surface temperatures to recalculate the average global temperatures from 1998-2012, which led to changing the assumption of a slower warming rate, said Xiangdong Zhang, an atmospheric scientist at the University of Alaska's International Arctic Research Center. The rate of global warming continued to rise at the higher rate of 0.112 degrees Celsius (0.2 degrees Fahrenheit) per decade, Shang said. The data confirmed that warming did not pause, he said. Previous studies averaged data under the assumption that surface air temperatures behave in a similar fashion to those at lower latitudes, according to the study. Climate change in the Arctic has demonstrated "characteristics distinct in many aspects due to local feedback processes," according to the study. 

Arctic climate change being felt farther south, scientists say - An international summary of five year's worth of research on Arctic climate change concludes the top of the world is getting warmer faster than anyone thought. And if it all sounds interesting but a little far removed from southern concerns, David Barber has news for you. "There are very clear linkages there and they've been occurring consistently for the last 10, 15 years," said Barber, one of Canada's top ice scientists and a prominent contributor to the report. "Most people don't understand how bad it is." The report completed for the Arctic Council, the group of eight countries that ring the North Pole, was released last week. It represents the work of 90 scientists from around the world and summarizes the most recent research from 2010 to 2016. "Cumulative global impacts related to Arctic change are expected to be large," the document said. "Adaptation costs and economic opportunities are estimated in the tens of trillions of U.S. dollars." The report concludes the Arctic continues to warm at twice the pace of mid-latitudes and is likely to see warming of up to 5 C as early as 2040. Melting permafrost will affect everything from resource development to freshwater flows to climate feedbacks from the release of stored carbon. Then there's this: "There are emerging impacts of Arctic change on mid-latitude weather/climate." Breakdowns in the normal weather patterns in the High Arctic were allowing heavy, dangerous ice to drift further south. Global air currents are increasingly disrupted. At one point last winter, Barber said, the North Pole was 29 C warmer than average. Air from California was being drawn to the top of the world.

The Building Is Burning and All the World’s Babies Are In It — Using Force to Fight Climate Change - Gaius Publius: This piece contains a small number of simple ideas:

  • It’s going to take force to fight climate change. Asking and negotiating won’t do the job.
  • There’s no time to wait. New studies show sea level rise could be as much as 11 feet by the end of the century.
  • Just because we can’t stop all of the coming disaster doesn’t mean we can’t mitigate, perhaps even halve, its effects.

Let’s look at these points one by one. No one with power will do the right thing when it comes to climate change, or do enough of it to actually matter (though one person perhaps would have, had he advanced far enough). The most we can hope for from current mainstream leadership is for people to look like they’re doing the right thing, or to do some of the right things, but not enough of them to upset the money-laden apple cart that gets them elected, or to turn the mainstream press so against them that they get the “Sanders-Kucinich treatment.” Recall that even Al Gore got the Sanders-Kucinich treatment from the press, one of the under-mentioned factors in his loss to Bush. We’re going to have to use force. What does “using force” mean when it comes to climate action? Here are just a two examples of many I could cite. So far these are orderly uses of force. (Disorderly uses of force are likely to come later, in the form of social chaos driven by global impotent anger, and are less likely to be effective. We’ll consider that set of outcomes at another time.)  An example of the orderly use of force, from climate activist Emily Johnston writing at The Guardian: I shut down an oil pipeline – because climate change is a ticking bomb
Normal methods of political action and protest are simply not working. If we don’t reduce emissions boldly and fast, that’s genocide A little over a year ago, four friends and I shut down all five pipelines carrying tar sands crude oil into the United States by using emergency shut-off valves. As recent months have made clear, climate change is not only an imminent threat; it is an existing catastrophe. It’s going to get worse, and tar sands oil—the dirtiest oil on Earth—is one of the reasons. We knew we were at risk for years in prison. But the nation needs to wake up now to what’s coming our way if we don’t reduce emissions boldly and fast; business as usual is now genocidal.The classic example of a legitimate use of the necessity defense is when someone is arrested for breaking and entering after they hear a baby crying in a burning building, and rush in to save her.

 Exxon, Shell, BP and more pledge to reduce methane emissions  - Exxon Mobil, Royal Dutch Shell, BP and more of the world's largest energy companies are pledging to reduce their methane emissions, acknowledging publicly that global warming is a major problem worldwide. The companies said Wednesday they're coming together to address climate change so they can continue to provide more efficient natural gas power to the world. However, they're not adopting any specific numeric goals to reduce methane emissions. Instead, they're adopting what they call "guiding principles." Methane is the primary component of natural gas, and the surging gas production from the shale boom has given rise to increasing methane emissions throughout much of the past 15 years. The energy sector - including oil and gas production and coal mining - is the largest source of U.S. methane emissions, which are a major contributor to the planet's greenhouse gas emissions, according to the U.S. Energy Department. The participating companies are Texas' Exxon Mobil, the Netherlands' Shell, United Kingdom-based BP, Norway's Statoil, France-based Total, Spain's Repsol, Italy's Eni, and Germany's Wintershall, which is a subsidiary of the world's largest chemical company, BASF. Several of these companies have shifted toward greater natural gas production over oil in recent years, seeing gas a cleaner-burning bridge fuel to help power the world. However, the methane emissions threaten to soil natural gas' reputation for cleaner energy. "Since natural gas consists mainly of methane, a potent greenhouse gas, its part in the transition to a low-carbon future will be influenced by the extent to which the oil and gas industry reduces its methane emissions," the companies said in a joint statement. 

EPA Revises the Social Cost of a Potent Greenhouse Gas - The Trump administration is tweaking how it measures the costs of emitting a potent greenhouse gas, a move that will have major impacts for climate rules. Known as the social cost of methane, this obscure metric is a younger counterpart to the better-known social cost of carbon. Economists and scientists developed the calculation to give policymakers a better idea of the economic benefits of cutting methane emissions. Its revision by the Trump administration is part of a broader shift within the federal government to downplay the impacts of climate change and will have important implications for how U.S. EPA regulates greenhouse gases. After carbon dioxide, methane is the second largest source of greenhouse gas emissions in the United States. The shorter-lived gas has a much stronger warming effect than CO2. Over 100 years, methane's warming impact is over 30 times that of carbon dioxide.That difference is reflected in the social cost of methane calculated under the Obama administration. For 2020, its price was set at about $1,400 per metric ton. That's orders of magnitude greater than the social cost of carbon—about $50 per metric ton. Under Administrator Scott Pruitt, the Trump EPA is taking a different approach. The agency recently set an interim social cost of methane at $55 per metric ton in 2020, more than 25 times less than the estimate of the previous administration. The agency will use this value "until an improved estimate of the impacts of climate change in the U.S. can be developed based on the best available science and economics," an EPA spokesperson said in an email.

U.S. repeal of carbon rule criticized in coal country - (Reuters) - Health groups, environmentalists and a former coal miner criticized the Trump administration’s proposal to dismantle an Obama-era rule to slash carbon emissions from power plants at a public hearing held in the heart of coal country on Tuesday. The hearing also heard from many coal supporters who said that the plan would cost utilities billion of dollars, which would likely result in mining job cuts. The Environmental Protection Agency (EPA) hosted the two-day hearing in West Virginia on its proposal to axe the Clean Power Plan (CPP), the centerpiece of former President Barack Obama’s strategy on climate change. It was the only meeting scheduled on the rule, which President Donald Trump has said would devastate the coal industry. Stanley Sturgill, a 72-year-old retired coal miner from Kentucky who has black lung disease, urged the EPA to “stop listening to the corrupting power” of the fossil fuel industry and to start doing everything possible to protect human health and the climate. Under Obama, the EPA in 2015 finalized the CPP, which sought to reduce emissions from power plants to 32 percent below 2005 levels by 2030. But the plan never took effect. The Supreme Court stalled it after energy-producing states sued the EPA, saying it had exceeded its legal reach. Health groups told the hearing the plan would save billions of dollars on hospital bills because it would slash emissions of particulates that can harm lungs and hearts, from both coal plants and fires spurred by global warming. “Revoking the CPP gives power plants a license to pollute,” said Kevin Stewart, an advocate at the American Lung Association, a nonprofit health group. 

Barry Myers, Trump’s pick to run NOAA, declares humans are main cause of climate change -- In his Senate confirmation hearing Wednesday morning, Barry Myers, President Trump’s choice to run the National Oceanic and Atmospheric Administration, said he agrees humans are the primary driver of recent climate change. Myers’s unambiguous acceptance of the human role in climate change marks a clean break from other members of the Trump administration, including Environmental Protection Agency Administrator Scott Pruitt, Energy Secretary Rick Perry, and Trump himself — all of whom have questioned the extent of human contributions.Myers, the chief executive of the private weather forecasting company AccuWeather, was first questioned about human contributions to climate change by Sen. Edward J. Markey (D-Mass). Markey asked Myers if he agreed with the climate science report released by 13 federal agencies earlier this month which stated it is “extremely likely” human activities are the dominant cause of recent climate warming. “I have no reason to disagree with the reports,” Myers said. Sensitive to the issue of the suppression of science, several Democratic senators asked Myers if he would interfere with climate science research and its dissemination at NOAA. Myers was adamant that he would not as long as the work was peer-reviewed. “I fully support the ability of scientists to do their work unfettered,” Myers said in response to questioning from Sen. Tammy Duckworth (D-Ill.) In his written response to similar questioning from Nelson, Myers said: “Quality, peer reviewed, scientific research, and the underlying data, to provide an ongoing narrative about our environment, which can offer the scientific basis for policy considerations and ongoing scientific discussion and advancement, are national assets that should be disseminated to the nation.” Myers’s unqualified acceptance of mainstream climate change science represented the most surprising development at a hearing in which he faced predictable questioning about potential conflicts of interest. As NOAA administrator, Myers would be in charge of the National Weather Service whose data are heavily used by his family business.

Senate panel advances controversial environmental nominee | TheHill: The Senate Environment and Public Works Committee on Wednesday advanced one of President Trump's environmental nominees who has been criticized for her disbelief in the science behind climate change and other issues. Senators voted 11-10 to send the nomination of Kathleen Hartnett White to serve on the Council of Environmental Quality (CEQ) to the Senate floor. Members also advanced Andrew Wheeler, Trump’s nominee to be deputy administrator of the Environmental Protection Agency (EPA), on another party-line vote. Hartnett White is a think tank official and former Texas environmental regulator with a reputation as a climate change skeptic who dismisses the science behind the influence of carbon emissions and other pollutants on the Earth's warming trend.  At CEQ, Hartnett White would advise the president on environmental issues and coordinate federal environmental reviews. Democrats slammed Hartnett White on Wednesday for her positions on environmental science and attacked Trump and Republicans for supporting both nominees.Sen. Kamala Harris (D-Calif.) called the nomination process “morally bankrupt,” while Sen. Jeff Merkley (D-Ore.) said the Hartnett White nomination was a “disservice.”Sen. Tom Carper (D-Del.) said Hartnett White is a nominee “whose views are extreme, whose words are staggeringly inappropriate, and who shows remarkable disrespect for science, the environmental laws on the books and the federal government.”“A nominee who can’t follow the thread from carbon pollution to ocean warming to sea level rise, who imagines science that is not there and ignores science that is there, is a preposterous nominee,” Sen. Sheldon Whitehouse (D-R.I.) said.

Climate scientists watch their words, hoping to stave off funding cuts --  Scientists appear to be self-censoring by omitting the term "climate change" in public grant summaries.An NPR analysis of grants awarded by the National Science Foundation found a steadily decreasing number with the phrase "climate change" in the title or summary, resulting in a sharp drop in the term's use in 2017. At the same time, the use of alternative terms such as "extreme weather" appears to be rising slightly. The change in language appears to be driven in part by the Trump administration's open hostility to the topic of climate change. Earlier this year, President Trump pulled the U.S. out of the Paris climate accord, and the President's 2018 budget proposal singled out climate change research programs for elimination.Meanwhile, the Environmental Protection Agency has been systematically removing references to climate change from its official website. Both the EPA's leader, Scott Pruitt, and Secretary of Energy Rick Perry have said they do not accept the scientific consensus that humans are causing the planet to get warmer. As a result, many scientists find themselves in an uncomfortable position. They are caught between environmental advocates looking to recruit allies and right-wing activists who demonize researchers and denigrate their work

Ohio State researcher defies EPA advisory board policy, refuses to resign -- An Ohio State professor is taking a stand against the head of the Environmental Protection Agency, Scott Pruitt, after he banned scientists who receive EPA funding from serving on any of the agency’s 22 advisory boards.Despite receiving an email Nov. 3 implying her resignation, Robyn Wilson, an associate professor in the School of Environment and Natural Resources, has refused to give up her EPA funding and her membership on the Science Advisory Board, a position she began in 2015 during the Obama administration. The boards provide expert advice to the agency on the science behind important policies and regulations, affecting everything from water quality to public health.Wilson is defying Pruitt’s new policy because she doesn’t believe it’s legal to stop a member from serving on the board if they receive funding. Pruitt was appointed by President Donald Trump to serve as EPA administrator.In September, Wilson received a $150,000 grant from the EPA to study how efficiently money is being spent to help improve water quality in Lake Erie. “It’s not really a choice because I can’t return the money,” Wilson said of the ultimatum. “I can’t bail on my collaborators or on the project.”Academic researchers like Wilson, in addition to other scientists who work for different industries, are typically chosen as board members to advise the EPA — who might not have the academic expertise in a certain field — on policy and regulation.

After ditching Paris, Trump’s team has another big international climate decision to make  - While it’s not the Paris climate agreement, hopes are rising that the Trump administration will not walk away from another international climate accord, one designed to limit emissions of super-polluting gases from air conditioners and refrigerators that could otherwise sharply warm the globe. In Montreal this week, countries have assembled for the 29th meeting of the parties to the 1987 Montreal Protocol, a widely celebrated treaty to protect the planet’s ozone layer. And they’re welcoming an extension of the protocol, called the Kigali Amendment, which was negotiated last year and late last week crossed a key ratification threshold. Its formal acceptance now by 21 member countries will trigger its going into force in early 2019. The amendment specifically targets a category of climate pollutants called hydrofluorocarbons, or HFCs, which are far more potent than leading greenhouse gases such as carbon dioxide or methane on a molecule per molecule basis. HFCs were originally a substitute for the chlorofluorocarbons (CFCs) that severely damage the ozone layer, but they’ve since been recognized as coming with their own significant problems. The chemicals, which often leak from air conditioners, refrigerators and other industrial devices and then make their way into the atmosphere, have the potential to drive a half-degree Celsius (.9 degrees Fahrenheit) of global warming if not controlled in the early part of this century. The Kigali Amendment, which would phase down HFCs, was strongly supported by the Obama administration. The Trump administration has not yet taken a position on it, other than perhaps one slight and murky signal: Over the summer, it refused to support a large climate change-related section of a G-7 communique that, among a long list of other matters, signaled support for the amendment. But it’s far from clear what that might really mean.

Trump Races to Pick Judges Who Oversee Environment Cases --President Trump has dismissed global warming as a hoax, snubbed the Paris emissions pact and scrapped U.S. EPA climate rules.But executive actions can be fleeting—as the Trump administration has shown by moving swiftly to unravel many of President Obama's climate change policies.Yet there's a major piece of Trump's climate legacy that could be more enduring: his court picks. The Trump administration has acted expeditiously to fill vacancies on top courts around the country, including the Supreme Court and powerful lower courts that could decide the fate of regulatory challenges and novel lawsuits, like localities suing oil companies for damages caused by sea-level rise. Those judges could be weighing in on climate change cases long after Trump leaves 1600 Pennsylvania Ave.Trump's judicial appointments rank "pretty high" in terms of his climate change legacy, said Glenn Sugameli, who runs the Judging the Environment project, which tracks judicial nominees' environmental records."They're the ones that are going to determine whether the actions taken by the Obama administration, by states and local governments are justified, are legal, are sustainable," he said. And "they're the ones that are going to decide whether the actions taken by the Trump administration are legal.""The reason why the courts play a big role right now is that, whether the executive branch is run by [President George W.] Bush or the executive branch is run by Obama, each time they're kind of stuck with old language," Lazarus said, noting that the 1970 Clean Air Act hasn't seen a major overhaul since 1990. The Obama administration tried to use the existing language to support the administration's signature climate rule, the Clean Power Plan, and "you can expect that Trump judges would be more skeptical of those activities." Beyond challenges to federal rulemaking, many of which are resolved in the D.C. Circuit court, there are other climate lawsuits underway across the country that could ultimately be heard by Trump appointees.

Moody's Warns Cities to Address Climate Risks or Face Downgrades -  Coastal communities from Maine to California have been put on notice from one of the top credit rating agencies: Start preparing for climate change or risk losing access to cheap credit. In a report to its clients Tuesday, Moody’s Investors Service Inc. explained how it incorporates climate change into its credit ratings for state and local bonds. If cities and states don’t deal with risks from surging seas or intense storms, they are at greater risk of default. "What we want people to realize is: If you’re exposed, we know that. We’re going to ask questions about what you’re doing to mitigate that exposure," Lenny Jones, a managing director at Moody’s, said in a phone interview. "That’s taken into your credit ratings."In its report, Moody’s lists six indicators it uses "to assess the exposure and overall susceptibility of U.S. states to the physical effects of climate change." They include the share of economic activity that comes from coastal areas, hurricane and extreme-weather damage as a share of the economy, and the share of homes in a flood plain.Based on those overall risks, Texas, Florida, Georgia and Mississippi are among the states most at risk from climate change. Moody’s didn’t identify which cities or municipalities were most exposed.Bond rating agencies such as Moody’s are important both for bond issuers and buyers, as they assign ratings that are used to judge the risk of default. The greater the risk, the higher the interest rate municipalities pay. Bloomberg News reported in May that towns and counties were able to secure AAA ratings despite their risks of flooding and other destruction from storms, which are likely to be more frequent and intense because of climate change. If repeated storms and floods are likely to send property values -- and tax revenue -- sinking while spending on sea walls, storm drains or flood-resistant buildings goes up, investors say bond buyers should be warned.

Senate Tax Bill Could Be 'Devastating' to Wind and Solar Power - The tax bill heading barreling towards a vote in the Senate already includes a worrisome rider that would open up the pristine Arctic National Wildlife Refuge to oil and natural gas drilling. Now, renewable energy trade associations are raising the alarm about a eleventh-hour provision called the Base Erosion Anti-Abuse Tax (BEAT) program that "would have a devastating, if unintended, impact on wind and solar energy investment and deployment," according to a letter addressed to the Senate. The BEAT provisions "undermine our capacity to use renewable energy tax credits, which have value only if they can be monetized," a letter, signed by the Solar Energy Industries Association , the American Council on Renewable Energy , American Wind Energy Association and Citizens for Responsible Energy Solutions , warned. As Utility Dive explained, while BEAT is meant to make it harder for corporations to dodge taxes, it also renders impractical the monetization of the Production Tax Credit (PTC) for wind power projects and the Investment Tax Credit (ITC) for solar projects. Tax credits have fueled the renewable energy industry's boom. The current PTC and ITC allows developers to deduct 30 percent of the cost of installing a solar or wind energy system from their federal taxes. Greg Wetstone, president and CEO of the American Council on Renewable Energy, told Utility Dive that the BEAT provision would affect $50 billion in annual investment in renewable energy projects. "This should not be happening now," he said. "It came out of nowhere." Apparently, the provision was inserted on Thanksgiving eve during a last-minute markup of the tax bill in the Senate finance committee. Greentech Media delved further: That problem is the Base Erosion Anti-Abuse Tax (BEAT) provision, which targets "earnings strippings," where large companies with foreign operations reduce their tax bills through cross-border payments they can then deduct in the U.S. The BEAT provision aims to circumvent that stripping with a minimum tax of 10 percent of taxable income. BEAT would require every company to do two calculations : one quantifying 10 percent of a company's taxable income, including cross-border payments, and another quantifying the corporation's tax liability, excluding any tax credits the company received from tax equity investments. The BEAT provision applies to all but R&D credits. If a company has invested in renewables, the second number could be lower than the first. If that's the case, the company would have to pay the difference in taxes.

World’s first floating wind farm in Scotland to use a 1.3MWh battery - Norwegian oil and gas company Statoil’s Batwind project in Scotland, combining wind turbines with energy storage, will have a battery system installed by system integrator Younicos. Batwind is under development through a partnership between Statoil and Masdar, the renewables and energy efficiency company owned by a government investment group in the United Arab Emirates’ Abu Dhabi. A Memorandum of Understanding (MoU) was signed by parties including Statoil and the Scottish government to develop the project in March 2016. The project host the world’s first floating wind turbines, based on Statoil’s proprietary Hywind platform, with the wind farm portion of the project dubbed Hywind Scotland. The floating turbines generate 30MW of electricity and began production in mid-October, when the facility was officially opened by Scotland’s First Minister Nichola Sturgeon.The offshore power plant, some 25km off the coast of Aberdeenshire to the east of the Scottish coast, is 75% owned by Statoil and 25% by Masdar. Statoil announced yesterday that it has awarded Younicos the contract to deliver a battery energy storage system of 1MW / 1.3MWh to connect to Hywind Scotland. The battery is intended to maximise the output of the wind farm usable by the grid, which in times of overproduction could mean storing the energy generated for injection into the grid later. This would smooth out the variable generation of the six 5MW Siemens Gamesa-supplied turbines and otherwise mitigate peaks and troughs in energy production. Younicos has in the past sourced batteries from Samsung SDI and others, acting as integrator for grid-scale and commercial energy storage projects and using its own energy and battery management software and control platforms.

Australia Set To Export Wind & Solar Energy To Indonesia - A coalition of renewable energy leaders has unveiled plans to build a 6 gigawatt wind and solar hybrid power plant in Western Australia with the sole intention of exporting its electricity production to its northern neighbor Indonesia via subsea electrical cables.  The project in question is the Asian Renewable Energy Hub (AREH), a proposed 6 GW (gigawatt) hybrid wind and solar power plant which would then export the electricity north via subsea cables to Indonesia, thereby solving several key energy and sustainable development issues currently facing the Asian country. The project would be built in the East Pilbara region of Western Australia, and is expected to begin construction in 2023 and reach full operation by 2029, meeting Indonesia’s energy demand and renewable energy targets. As can be seen below, the East Pilbara site can generate a tremendous amount of renewable electricity at a constant rate.   “Given the increasing ability to move energy over long distances, the Asia Renewable Energy Hub is a compelling proposition for Indonesia — not only for supplying the energy, but for the economic benefits that come with establishing manufacturing facilities in Indonesia.“  The project would be built in the East Pilbara region of Western Australia, the country’s western-most state, and is expected to begin construction in 2023 and reach full operation by 2029, meeting Indonesia’s energy demand and renewable energy targets. The East Pilbara site is an impressive renewable energy source, and its proximity to Indonesia, combined with recent advances in subsea cable technology, means that the project is nowhere near as expensive as it might sound at first. The first phase of the project has an initial cost of around $10 billion, and subsequent phases of the project could look to begin exporting renewable energy to other countries in South East Asia.

Why Tesla's e-truck matters - The Barrel Blog -- E-trucks matter because growth in commercial transportation is a key factor expected to keep the oil market on a low but steady growth path out to 2040 and beyond, at least according to most long-term outlooks. If commercial transportation can adopt electrification, it would result oil demand peaking much earlier than most forecasts currently suggest and oil would become a sunset industry. That oil demand from Light Duty Vehicles — everyday passenger cars — will contract is already assumed. This results only partially from the adoption of Electric Vehicles (EVs); another factor is the improving fuel efficiency of internal combustion engines, which is expected to increase on average for the global parc (population of cars) from about 25 mpg today to 40 mpg by 2040. Thus the number of cars in the world can nearly double, but so long as even a fairly small proportion of them are New Energy Vehicles, overall oil demand from the sector will fall. Not so with HDVs. These defy electrification essentially because they are load carriers, and would thus need much larger batteries, which are heavy and bulky, using up space and adding weight, neither of which would help the economics of e-truck freight. As a result, forecasters see commercial e-trucks as more than decade away. Global GDP is forecast to nearly double between now and 2040 and that means much more commerce, people and trade, adding hugely to the movement of goods and people around the planet. So if commercial transportation cannot be electrified, then oil demand retains a huge market sufficiently robust to deliver long-term growth over and above the expected contraction in the LDV segment. However, Tesla says e-trucking will be here in 2019. Even that is only CEO Elon Musk’s timetable; the reality is that Tesla leads the field only in style, but not in production capacity or commercialization when it comes to EVs. Production of e-buses has been ramped up surprisingly quickly in China, in good part supported by subsidy, but they have found both a ready domestic and foreign market in megacities as far afield as Buenos Aires and London, where politicians are keen to cut urban air pollution. Although figures vary, Chinese e-HDV production, largely of buses, exceeded 100,000 in 2016, up from less than 10,000 a few years earlier. China is also churning out increasing numbers of electric garbage and yard trucks and not just at home. Market leader BYD has been assembling them for about two years at a plant in California, which it is tripling in size, while it plans to open another in Ontario, Canada, next year. 

Study: Tesla Truck Needs 4000 Homes To Recharge - Tesla revealed the 'Semi' electric truck earlier this month, promising 400 miles (644km) of charge in just 30 minutes through a new "mega charger" to be manufactured by the company.  In a report published by FT.com, one of Europe's leading energy consultancies has predicted that Tesla's electric haulage truck will need the same energy as up to 4,000 homes to recharge. John Feddersen, chief executive of Aurora Energy Research, said the energy required for the mega charger to charge a battery in that amount of time would be 1,600 kilowatts. The amount of energy required to recharge the Tesla truck translates to powering 3,000-4,000 "average" houses, Fedderson added. While Tesla has installed superchargers for its electric cars, the scope of megachargers by Tesla for haulage trucks is still quite challenging. Tesla has not revealed when it will start offering the network of megachargers despite confirming that the Tesla Semi will be rolled out from 2019. The numbers are indeed mind-boggling, but Tesla has surprised us with its technological advancements in electric vehicle development, and we could expect the electric vehicle manufacturer to offer the best for its customers.

Self-Driving Cars And Deciding Who Lives And Dies - Sacrificing Your Family For The "Greater Good" --As the establishment continues to declare that the era of “self-driving” cars is upon us, many Americans have been left wondering what the privacy implications for such a tremendous change in society will end up being. Now, with the very real possibility that, in the event of an accident, these cars would literally make the decision between who dies and who lives, Americans have even more to worry about when it comes to handing over control of their vehicle to a supercomputer. USA Today reports:  Consider this hypothetical: It’s a bright, sunny day and you’re alone in your spanking new self-driving vehicle, sprinting along the two-lane Tunnel of Trees on M-119 high above Lake Michigan north of Harbor Springs. You’re sitting back, enjoying the view, moving along at the 45-mile-an-hour speed limit. As you approach a rise in the road, heading south, a school bus appears, driving north, one driven by a human, and it veers sharply toward you. There is no time to stop safely, and no time for you to take control of the car.Does the car:

  • A. Swerve sharply into the trees, possibly killing you but possibly saving the bus and its occupants?
  • B. Perform a sharp evasive maneuver around the bus and into the oncoming lane, possibly saving you, but sending the bus and its driver swerving into the trees, killing her and some of the children on board?
  • C. Hit the bus, possibly killing you as well as the driver and kids on the bus?

The article goes on to say that the above question is one that is no longer theoretical as upwards of $80 billion have been invested in the sector with companies such as Google, Uber, and Tesla all racing to get their self-driving cars onto a road near you. Last month, Sebastian Thrun, who founded Google’s self-driving car initiative, told Bloomberg that the cars will be designed to avoid accidents, but that “If it happens where there is a situation where a car couldn’t escape, it’ll go for the smaller thing.” But what if the smaller thing is a child?

Why battery cost could put the brakes on electric car sales  -- Battery prices need to drop by more than half before electric vehicles will be competitive with cars powered by internal-combustion engines, according to Bloomberg New Energy Finance, whose two-day Future of Energy summit in Shanghai concludes on Wednesday. That’s likely to happen by 2026, when the cost for lithium-ion battery packs is projected to fall to about $100 per kilowatt hour, speakers at the summit said. The focus of the industry has moved from lithium-ion batteries using liquid electrolytes to solid-state ones, which address the need for safer and more powerful energy storage. Toyota Motor Corp. has said it’s working to commercialize the technology in the early 2020s, and Dyson Ltd. says it will build an electric car using solid-state batteries in three years. The British company plans to invest one billion pounds ($1.3 billion) to develop the car, plus the same sum to create solid-state batteries for it. That investment would outpace those made by other major EV makers such as Tesla Inc.Panasonic Corp. of Japan, BYD Co. of China and South Korea’s LG Chem Ltd. are the top manufacturers of lithium-ion batteries for EVs, according to BNEF. Shares in companies such as lithium-salt maker Stella Chemifa Corp. and Sociedad Quimica y Minera de Chile SA, which mines chemicals including lithium, are on the rise.  As demand rises for metals used in batteries, beneficiaries include companies such as Japan’s Tanaka Chemical Corp., which manufactures and sells components for the storage devices. The average cost of cars powered by fossil fuels is about $28,000, a figure that will probably rise to about $30,000 by 2030, based on estimates by Bloomberg New Energy Finance. To become cheap enough to replace that fleet, electric vehicles will rely on a 67 percent drop projected for battery costs in the next nine years.

The trouble with big data is the huge energy bill -- Every service that Google provides is provided via its huge data centres, which consume vast amounts of electricity to power and cool the servers, and are therefore responsible for the emission of significant amounts of CO2. Since the advent of the modern smartphone in about 2007 our reliance on distant data centres has become total, because everything we do on our phones involves an interaction with the “cloud” and therefore has a carbon footprint.The size of this footprint has been growing. At the moment, about 7% of the world’s electricity consumption is taken by our digital ecosystem but this is forecast to rise to 12% by 2020 and is expected to grow annually at about 7% through to 2030.The big internet companies are acutely aware of this. Electricity costs money and they are fanatical about reducing costs. And they are desperate to avoid the PR downsides of being perceived as energy hogs. So they have responded to a challenge issued by the environmental group Greenpeace some years ago – to commit to having all of their activities powered by renewable sources. Facebook, Apple and Google made this “100% renewable” commitment four years ago and have now been joined by nearly 20 other internet companies. The trouble is that server farms and networks account for only 50% of the electricity consumption of our networked world. The devices we use consume another 34% and the industry that manufactures them takes up the remaining 16%. Making environmental progress on these fronts will be much harder. A desktop PC running eight hours a day, for example, emits 175kg of CO2 in a year. So you can imagine the carbon footprint of a large city office block that has thousands of desktop PCs running for the whole of a working day. Multiply that by all the office blocks in the centre of London and you get an idea of the environmental impact of even the humble PC.

Bitcoin -> Energy Use –> Pollution --  Bitcoin, and cryptocurrencies more generally, consume huge amounts of energy. According to an analysis by Digiconomist, Bitcoin alone is currently eating up nearly as much energy as the entire Slovak Republic.  Per the same site, the energy devoted to a single Bitcoin transaction could power 10 American households for a day. Keep in mind that Americans devour energy – in Italy the same transaction could power more than 50 households for a day.It is worth remembering that there are three other virtual currencies not included in these figures.The activity known as “Bitcoin mining,” as currently conceived, not only consumes energy quickly, but does so at a continually increasing rate. Continuing in this manner will lead to steadily more severe environmental consequences, absent changes in the relevant technological systems. If you search for “Bitcoin” on Google, you get about 200 million results; if you search for “Bitcoin pollution,” you get about 800,000. One wouldn’t say that the media finds the environmental impact of Bitcoin mining a particularly thrilling topic. To understand better the complexities and dangers here, let’s look more closely at the world of cryptocurrency mining. “Miners” play a crucial role in every cryptocurrency system. A cryptocurrency’s goals include (1) validating new transactions in a way resistant to fraud, and (2) enforcing a limit on how fast Bitcoins can be created and transactions validated.The basic setup involves mathematical functions called “hashes” that are easy to calculate but hard to reverse. It is easy to compute the hash function even of a large amount of data, but it is very difficult to tamper with the data without causing major changes in the hash value.In the case of cryptocurrencies, the large block of data is the records describing a collection of new transactions. All of the blocks together form a linked list (the “block chain” or “ledger”), with each block containing the hash of the block added just before it.Suppose now that a hacker tries to modify a block. That will trash its hash value, and comparing the hash with the value that’s supposed to match it in the following block will reveal that something is wrong. The way this regulates the speed of creation of new blocks is that a part of the new block’s header (the “nonce”) is not fixed in advance. It has to be chosen so that the new block’s hash will satisfy some sort of restriction (typically, starting with a certain number of zeros). The only way to validate the new block is to calculate hashes for every possible value of the nonce until you hit one that works.  In practice, there is a global contest to see who can solve the computing puzzle for a new block. The winner is paid in Bitcoin. Solving the contest requires a ton of computing power (“work”). In this sense, the activity of a Bitcoin “miner” is not entirely dissimilar to that of an ordinary miner who toils in order to extract raw materials (gold, copper, silver) that will make it possible for a mint to coin money. For more details on this process, see for example here.

Bitcoin mining consumes more electricity a year than Ireland --Bitcoin’s “mining” network uses more electricity in a year than the whole of Ireland, according to statistics released as the currency broke $9,000 for the first time.According to Digiconomist the estimated power use of the bitcoin network, which is responsible for verifying transactions made with the cryptocurrency, is 30.14TWh a year, which exceeds that of 19 other European countries. At a continual power drain of 3.4GW, it means the network consumes five times more electricity than is produced by the largest wind farm in Europe, the London Array in the outer Thames Estuary, at 630MW.At those levels of electricity consumption, each individual bitcoin transaction uses almost 300KWh of electricity – enough to boil around 36,000 kettles full of water. Although power consumption of other payment networks is harder to isolate, one of Visa’s two US data centres reportedly runs on about 2% of the power required by bitcoin. Between them, those two data centres conduct around 200m transactions a day; the bitcoin network handles fewer than 350,000.The astronomical power draw is a facet of how the bitcoin network protects itself against fraud. With no centralised authority confirming transactions, bitcoin is instead backed by “miners”, who put specialised computers to work churning through extremely power-intensive computing problems. Solving those problems both rewards the miner, handing them almost a quarter of a million dollars in bitcoin, and verifies all transactions made in the last 10 minutes. As the price of bitcoin goes up, so does the value of the reward, meaning that more miners put more computers to the task of running the network. But since the price of bitcoin doesn’t necessarily rise in step with the number of transactions, that disconnect can mean the currency uses a significant amount of power per transaction in periods of high prices.

Why Bitcoin-Mining May Be Elon Musk's Next Big Problem... For those unfamiliar, cryptocurrencies only work because there is a network of distributed computing that processes the transactions. To reward those offering the computing power, cryptocurrencies give fractions of new bitcoins to those who did the work of running the network. This is referred to as “mining” bitcoins and other cryptocurrencies. This was an expensive and power-hungry task that could wear out computer components much faster than usual. Initially, many doing this used high-end graphics processing units, but as the money earned per device diminished, miners turned to specialized computer units, called ASICs, to do the task faster with less electricity. But the units are still not free and they still can use kilowatts of electricity for a handful of them. To reduce the overall cost of running mining computers, some miners put the computers throughout their homes to act as small space heaters and reduce their heating bill. Others run their rigs on solar panels to avoid a monthly power cost. Any source of electricity you don’t have to pay the normal rate for, or that you don’t have to pay for at all, is an opportunity for miners to increase their already thin profits. Teslas and other EVs have free access to power at many charging stations, so it was probably only a matter of time until somebody decided to plug their mining computers in. One member of the Tesla Owners Worldwide on Facebook suggested the idea, possibly in jest. Then another owner went ahead and did it, posting a photo of his setup (above). Some members suggested that his setup could pull as much as 3 kilowatts of power and would probably require the vehicle’s air conditioning to be on for cooling.

Websites use your CPU to mine cryptocurrency even when you close your browser - Researchers have discovered a new technique that lets hackers and unscrupulous websites perform in-browser, drive-by cryptomining even after a user has closed the window for the offending site. Over the past month or two, drive-by cryptomining has emerged as a way to generate the cryptocurrency known as Monero. Hackers harness the electricity and CPU resources of millions of unsuspecting people as they visit hacked or deceitful websites. One researcher recently documented 2,500 sites actively running cryptomining code in visitors’ browsers, a figure that, over time, could generate significant revenue. Until now, however, the covert mining has come with a major disadvantage for the attacker or website operator: the mining stops as soon as the visitor leaves the page or closes the page window. Now, researchers from anti-malware provider Malwarebytes have identified a technique that allows the leaching to continue even after a user has closed the browser window. It works by opening a pop-under window that fits behind the Microsoft Windows taskbar and hides behind the clock. The window remains open indefinitely until a user takes special actions to close it. During that time, it continues to run code that generates Monero on behalf of the person controlling the Website.  The animated GIF image at the top of this post shows the Windows task bar on the left. On the right is the offending browser window as the user removes it from its hiding place, resizes it, and finally closes it. In a blog post published Wednesday morning, Malwarebytes Lead Malware Intelligence Analyst Jérôme Segura wrote: This type of pop-under is designed to bypass adblockers and is a lot harder to identify because of how cleverly it hides itself. Closing the browser using the “X” is no longer sufficient. The more technical users will want to run Task Manager to ensure there is no remnant running browser processes and terminate them. Alternatively, the taskbar will still show the browser’s icon with slight highlighting, indicating that it is still running.

Duke Energy rate increase focused on coal ash cleanup cost --  The country's largest electric company heads into a fight for a rate hike with regulators in its top market now focused on setting a precedent on whether consumers should pay the full cost of cleaning up coal ash pits loaded with toxic metals. The North Carolina Utilities Commission opens hearings Monday into whether Duke Energy Corp. will be allowed to charge consumers nearly $200 million a year for the cleanup. The company and the state's official utilities consumer advocate reached a tentative deal last week that would cut the requested rate increase of almost 15 percent. The deal involved Duke Energy slightly reducing its requested potential profit margin from 10.75 percent to 9.9 percent, speeding up consumer repayment of some deferred taxes and other moves. Still at issue is whether the Charlotte-based company will be allowed to charge consumers the full, multibillion-dollar cost of cleaning up its coal ash pits. The company plans to excavate coal ash and move it away from waterways at eight of the 14 North Carolina sites. Ash would be dried out, covered and left in place at the other waste pits. Coal ash contains arsenic, lead, mercury and other elements that may be hazardous in sufficient concentrations. Environmentalists and state regulators say those heavy metals have been draining through the unlined bottoms of pits where liquefied coal ash has been stored for decades. Duke Energy argues both its North Carolina subsidiaries should be allowed to pass along the full bill for coal ash cleanup to consumers as part of the routine cost tied to burning coal to deliver low-cost electricity. 

As the lobbying gets louder, coal power stations may not go quietly - Europe’s race to quit coal has hit a speed bump as energy companies face local political resistance to the closure of power stations burning the polluting fuel. ScottishPower owner Iberdrola said this month that it was closing its last two coal power stations in Spain as part of its plan to cut carbon emissions and switch to cleaner power generation. But days later the Spanish government reacted by blocking the shutdowns, starting the process for a royal decree that would give ministers the final say on any power station closure if it was deemed to affect energy security. Despite the company’s protestations, Álvaro Nadal, the country’s energy minister, told Iberdrola last week that Madrid’s opposition was firm. To an extent, the impasse is a problem peculiar to Spain: despite most of the coal burned by the country’s power plants being imported, its vocal mining lobby still carries political clout. But it is not the only example in Europe of political concerns rubbing up against the EU’s climate change goals and energy companies trying to transform themselves from coal-burning polluters into green energy firms: Enel, the world’s biggest utility by customer numbers, has faced similar hiccups in Italy. The cases also raise questions about whether the UK’s progressive and self-imposed coal phase-out, due to conclude by 2025, will be as painless as it has been so far, if energy supply concerns bite. Although Madrid argues its policy is about security of supply, energy experts point out the country has too much power capacity, not too little. Chris Littlecott at the thinktank E3G said: “Spain could comfortably switch off all of its coal power plants and use its other existing capacity. The debate in Spain is much more driven by domestic politics, and regional organised opposition, particularly by unions, that is playing back into national politics.” 

Trump's Coal Man Is Racing the Clock to Bail Out Plants - President Donald Trump is on the verge of subsidizing coal plants that would otherwise be driven out of business by cheaper, cleaner natural gas. A plan that would leave consumers footing a potential multibillion-dollar bill is expected Dec. 11, and Trump couldn’t have chosen a more enthusiastic person to get it done: Neil Chatterjee, a Republican from coal country, who has spent years brokering seemingly impossible deals for Senate Majority Leader Mitch McConnell of Kentucky. Now he’s cutting the biggest deal of his career -- and he’s running out of time to do it.His role as chairman of the Federal Energy Regulatory Commission, the agency that oversees U.S. power markets, is temporary, with a replacement waiting in the wings. With precious little time, he’s pushing a proposal to bail out failing coal plants, paid for by electricity customers. And he’s treating this latest negotiation as seriously as a last-minute fight for votes in Congress.  In several interviews, Chatterjee laid out his strategy for success, revealing one likely framework for keeping money-losing coal plants alive. He describes it as “the most significant proposed change to market rules in decades.”Trump made the rebirth of coal, unpopular because of its expense and its contribution to climate change, a central theme of his 2016 campaign. Since then, coal magnate Robert Murray has appealed directly to the president to halt the wave of coal-plant retirements. Murray said that without immediate government intervention, power generator FirstEnergy Solutions Corp. will be forced into bankruptcy, followed by his own company, Murray Energy Corp. Some other energy-generating companies oppose the payments.

Ex-convict coal magnate says to run for Senate (Reuters) - Don Blankenship, the former CEO of coal company Massey Energy who was recently released from jail after a sentence for violating mine safety laws, said on Wednesday he plans to run for U.S. Senate representing West Virginia. “It’s true,” he told Reuters in an email, without elaborating. Local broadcaster WCHS-TV first reported the news earlier on Wednesday, saying Blankenship filed his registration papers this week to run as a Republican, making him an official candidate for the seat during 2018 elections. A Federal Election Commission spokeswoman said she had not yet seen the filing. Blankenship was sentenced to a year in prison in April 2016 for conspiring to violate federal mine safety standards, following an explosion in 2010 at Massey’s Upper Big Branch mine that killed 29 people. He is the most prominent American coal executive to be jailed for mine deaths. He was released in May 2017. He has maintained that his conviction was unfair and the accident at Upper Big Branch was distorted by the media. If Blankenship wins the Republican nomination, he would be up against incumbent Democrat Joe Manchin, who was governor at the time of the Upper Big Branch explosion and vehemently criticized Blankenship over the incident. Rival Republican Senate candidate Patrick Morrisey said he welcomed Blankenship’s entry into the race. 

 German court: Ancient forest can be cleared for coal mine  (AP) — A court in western Germany says an ancient forest near the Belgian border can be chopped down to make way for a coal strip mine. Cologne's administrative court ruled Friday against a legal complaint brought by the environmental group BUND that wanted to halt the clearance of much of the Hambach forest. The group said it would appeal the decision and seek an injunction to prevent energy company RWE from clearing the trees in the meantime. Hambach forest has become a focus of environmental protests against the expansion of a vast mine that supplies much of the coal used in nearby power plants. The coal, a light brown variety called lignite, is considered one of the most polluting forms of fossil fuel.

Germany to axe ancient forest for coal mining; Poland faces EU fines for chopping down infected trees - A German company has received the green light to raze an ancient forest in order to make room for a massive coal mine. The court decision comes days after the EU threatened Poland with exorbitant fines if it logs an insect-infested forest.   Cologne’s administrative court ruled Friday that Germany’s biggest electricity provider, RWE, could proceed with plans to chop down a section of the 12,000-year-old Hambach forest in order to clear space for the company’s open-air coal mine near the Belgian border. The mine produces lignite, a light brown variety of coal considered one of the most environmentally-unfriendly forms of fossil fuel. The mine has been expanded every year since 1978, reducing the Hambach forest to less than 10% of its original size. The ruling comes just days after the European court of justice warned Poland that it would be fined more than €100,000 a day if it continues to chop down the Unesco-protected Bialowieza forest.  The Polish government claims that the forest must be logged in order to stave off an outbreak of the spruce bark beetle. Poland’s environment minister, Jan Szyszko, accused the EU of “spreading lies” by publicizing photographs detailing extensive logging in Bialowieza that had been “manipulated” in a cyber-attack. Warsaw also called into question the protected status of Bialowieza, insisting that the forest is man-made, and not the last primeval forest in Poland. However, Poland faces a €36.5m annual penalty if it doesn’t comply with the EU ruling within two weeks. While environmental activists celebrated the European court’s landmark decision, Germany’s deforestation of Hambach raises concerns over whether the ruling will create a meaningful precedent.

Bangladesh Starts Constructing its First Nuclear Power Plant -- With a ceremony held today, Bangladesh started the construction of its first nuclear power plant at Rooppur. The pouring of the first nuclear safety-related concrete for the power plant made Bangladesh the third ‘newcomer’ country to start constructing its first nuclear power reactor in three decades – following the United Arab Emirates in 2012 and Belarus in 2013. The two VVER type (AES-2006) pressurized water reactors are to be supplied by Atomstroyexport of Russia. Each with a 1200 MW(e) gross electricity generation capacity, the reactors are planned to be commissioned in 2023 and 2024, respectively. The ceremony held today at Rooppur, some 140 km west of the capital Dhaka, featured leaders of the country and representatives of key organizations assisting Bangladesh in this major undertaking, such as the IAEA and Rosatom, Atomstroyexport’s parent company.  “We want to transform Bangladesh into a middle income country… and a developed one by 2041. I hope that the Rooppur Power Plant will play an important role in achieving this goal,” said Prime Minister Sheikh Hasina, at the ceremony. “Our government has given top priority to the issue of nuclear safety and radiological protection, while implementing the Rooppur project. We are strictly following IAEA safety standards and other relevant guidance as well as international good practices,” she added.

The Mysterious Radioactive Cloud—Why the Ruthenium-106 Story Matters -- A week ago, the Russian meteorological service, Roshydromet, reacted to a month-long standing request for information from Greenpeace . It triggered extraordinary interest among journalists world-wide in a rather unknown bit of nuclear physics: the radioactive substance ruthenium-106 .  For weeks, two Russian state-run bodies, Rosatom and Roshydromet, made statements negating or misinterpreting each other's information and the data coming from French and German sources. The International Atomic Energy Agency—the UN body in which all nuclear states are supposed to cooperate—did not give any clarity, and only a Russian energy propaganda site leaked what looks like the IAEA's measurement data . The Russian disinformation services were working overtime over social and even official media, making denial statements and sometimes pointing the finger to France and the Ukraine. In other words, there is no reliable information on where the cloud of this rare man-made radioactive substance came from.  The only thing that is clear, is that at its source there must have been a lot of it—sufficient, according to the French nuclear research institute IRSN , to activate precautionary measures for some kilometers around. The scary thing is that we still don't know what caused it. Speculation abounds: medical waste burned in an incinerator? Or an incident in the recently started new vitrification plant in the nuclear reprocessing facility, Mayak, or like in 2001 in a similar installation in France ? We know it was no satellite and no nuclear power plant.

New Ohio law would allow the sale of drilling brine for use on roads - The Post -- A new Ohio House bill would allow the sale of commercialized brine produced during fracking and oil drilling for use on roadways — something Athens’ city officials plan to oppose.   Ohio House Bill 393, introduced by Ohio State Representatives Anthony Devitis, R, and Michael J. O’Brien, D, would allow the “sale of brine as a commodity for surface applications.” That would mean that brine, a byproduct of oil and gas drilling, could be sold and sprayed on roads as a form of ice control. Athens City Council members expressed concerns about the potential toxicity of the brine.   “This means that ODOT, or the county or the city, could use brine and injection fluid from oil and gas fracking on the streets,” Athens City Councilwoman Chris Fahl, D-4th Ward, said at a council meeting Nov. 13. “This would open up a whole other area and would be so poisonous.”  Fahl said she plans to introduce an ordinance that would ban the city from spraying brine on its roadways. Brine is leftover waste from the drilling process in both fracking and conventional drilling, according to a report by the Connecticut General Assembly. “The process produces high volumes of wastewater that must be treated, recycled or safely disposed,” the report reads. “The wastewater is generally classified in two categories: flowback fluid, which is the fracturing fluid (the mix of water, sand and chemicals) that returns to the surface when production starts, and production brine (also called produced water, formation water or simply ‘brine’) … Waste from fracking operations is exempt from federal hazardous waste regulations, according to the Environmental Protection Agency (EPA).”

Rights groups hope to achieve goals by altering state law - Athens NEWS - A legal organization that has been working with a group of Athens County residents to put an anti-fracking county charter before voters the past three years is launching an initiative petition process for two Ohio constitutional amendments. One seeks to assert the primacy of local self-government, while the other seeks to grant counties and townships the power of initiative and referendum. The Pennsylvania-based Community Environmental Legal Defense Fund (CELDF) assisted the Athens County Bill of Rights Committee (ACBORC) in its legal arguments with proposed charters in 2015, 2016, and 2017. None of those charter proposals ever reached the ballot in Athens County, having been struck down each time eventually by the Ohio Supreme Court. In a press release earlier this month, the CELDF announced that the organization, working through the Ohio Community Rights Network (OHCRN), submitted two proposed state constitutional amendments to the Ohio Attorney General. The office will have to certify the validity of the proposals before the process of collecting petition signatures can begin. The CELDF assisted in the drafting and legal review of both amendments, the press release said. The proposed “Ohio Community Rights Amendment” codifies the right to local community self-government, enabling local governments to protect and expand fundamental rights and prohibit corporate activities that violate those rights, the news release stated. “It also secures the authority of communities to put in place stronger environmental rights and protections than those recognized at the state, federal, or international level,” the release said.

Community rights group's petitions certified by AG - Athens NEWS - The Ohio Attorney General’s Office has certified two petitions for proposed amendments to the Ohio Constitution put forward by a group that has advised Athens County residents on proposed anti-fracking county charter efforts the past three years. The AG’s certification clears the first hurdle for the Pennsylvania-based Community Environmental Legal Defense Fund (CELDF) to begin efforts to collect the more than 305,000 signatures needed to bring the two proposed amendments to Ohio voters. One amendment seeks to assert the primacy of local self-government, while the other seeks to grant counties and townships the power of initiative and referendum.  The CELDF assisted the Athens County Bill of Rights Committee (ACBORC) in its legal arguments with proposed charters in 2015, 2016, and 2017. None of those charter proposals ever reached the ballot in Athens County, having been struck down each time eventually by the Ohio Supreme Court.Once the summary language and initial signatures are certified, the Ohio Ballot Board must determine if the amendments each contain a single issue or multiple issues. The petitioners must then collect signatures for each proposed amendment from registered voters in each of 44 of Ohio’s 88 counties, equal to 5 percent of the total vote cast in the county for the office of governor at the last gubernatorial election in 2014. Total signatures collected statewide must also equal 10 percent of the total vote cast for the office of governor at the last gubernatorial election.In a press release earlier this month, the CELDF announced that the organization, working through the Ohio Community Rights Network (OHCRN), submitted two proposed state constitutional amendments to the Ohio Attorney General.The proposed “Ohio Community Rights Amendment” codifies the right to local community self-government, enabling local governments to protect and expand fundamental rights and prohibit corporate activities that violate those rights, the news release stated. “It also secures the authority of communities to put in place stronger environmental rights and protections than those recognized at the state, federal or international level,” the release said.

Ohio activists push amendments to restore community rights - Youngstown Vindicator -- Activists in Ohio are joining efforts around the country that supporters say are aimed at restoring rights to communities to challenge a growing list of corporate incursions. The campaign to pass an Ohio Community Rights Amendment stems from mounting frustration among environmental groups that have failed for years to push anti-fracking measures onto local ballots. But the latest effort is broader, said spokeswoman Tish O’Dell. State laws are making it increasingly difficult for communities to regulate predatory lending, puppy mills, wireless equipment location, minimum wages, pesticide treatments and a host of other issues, O’Dell said. Two constitutional amendments proposed in Ohio would prevent further setbacks from election officials, courts and the state’s Republican-led state Legislature, O’Dell said. Similar efforts are underway in Oregon and New Hampshire. An earlier attempt failed in Colorado.The first would extend the right of initiative and referendum enjoyed by residents of municipalities to those living outside them, in counties and townships. The second, dubbed the Ohio Community Rights Amendment, would secure localities’ rights to self-government on issues of the health, safety and welfare of humans and the environment.Republican Ohio Attorney General Mike DeWine certified petitions for both amendments Monday, sending them next to the state ballot board.If the proposed amendments make it onto ballots, they will face broad opposition, said Ohio Oil & Gas Association Executive Vice President Shawn Bennett. The group has fought similar local efforts as both illegal and unconstitutional.

US appeals court orders halt on natural gas pipeline in Ohio (AP)- A city facing long odds of stopping section of a $2 billion natural gas pipeline from being built there was handed a victory this week when a federal appellate court issued an emergency order that temporarily halts the start of construction. The 6th U.S. Circuit Court of Appeals in a 2-1 decision on Wednesday ruled that the city of Green, in northeast Ohio's Summit County, is likely to prevail in a federal petition it filed with the court last month claiming that the state Environmental Protection Agency failed to follow its own rules when it granted NEXUS Gas Transmission a clean water certificate for the project. Green argues that the 8-mile (13-kilometer) pipeline section could damage environmentally sensitive areas, including a bog that contains protected plant and animal species. The EPA has said in court documents that it followed its rules. NEXUS, a partnership between Calgary, Alberta-based Enbridge and Detroit's DTE Energy, has intervened in the petition to defend the EPA. The company has recently begun construction of a 255-mile-long (410 kilometer) pipeline capable of transporting 1.5 billion cubic feet (42.5 million cubic meters) of gas per day from Appalachian shale fields across northern Ohio and into Michigan and Canada. The project has received all its federal approvals but will now have to wait to do any work in Green, a solidly middle class community of 25,000 residents south of Cleveland, until after 6th Circuit decides the merits of the city's claims.

Ohio asks Rover pipeline to stop horizontal drilling (AP) — The Ohio Environmental Protection Agency has told the company building the massive Rover natural gas pipeline project to stop horizontal drilling after another spill of clay-based slurry. The Repository reports EPA Director Craig Butler on Wednesday asked Energy Transfer Partners, the Dallas-based company building the $4.2 billion project, to halt drilling after 200 gallons of slurry spilled into a river in Ashland County on Nov. 16. Butler told the company the EPA will be asking the Federal Energy Regulatory Commission to intervene. The state Attorney General’s Office earlier this month sued Energy Transfer claiming the company had committed numerous environmental violations in more than a dozen counties. The EPA earlier fined the company $2.3 million over previous spills. A spokesman for the project didn’t respond to messages seeking comment.

Fracking chemical clarity is requested - — A policy group has partnered with emergency management agencies across 21 states, including Ohio, to petition the U.S. Environmental Protection Agency to disclose the identities of chemicals used by oil and gas drilling companies in the hydraulic fracturing process.  Dusty Horwitt, J.D., senior counsel for the group, said in a release that the state of Ohio and the federal government often prevent citizens, even first responders, from knowing what chemicals are used in drilling operations because they deem their extracting process as “confidential business information.” In a letter dated Nov. 15 and sent to U.S. EPA Director Scott Pruitt, the group, along with more than 100 first responders, health professionals and scientists from 21 states and the District of Columbia, requested that the EPA disclose the identities of 41 chemicals that EPA regulators reviewed between 2003 and 2014, under a program created by the Toxic Substances Control Act to ensure that new chemicals are safe before they are used commercially.“The regulators identified health concerns about each of the new chemicals ranging from lung irritation to developmental toxicity to neurotoxicity, yet allowed each of them to be used in oil and gas wells. “In at least 30 of the 41 cases, EPA allowed the chemicals to be commercially produced without receiving health testing data from the manufacturers or requesting such data — as EPA has authority to do under the law,” Horwitt stated. The PFPI claims evidence has shown that the 41 chemicals were likely used for hydraulic fracturing, and that chemical manufacturers have declared confidential some or all of the chemicals’ identifying information, as permitted by the TSCA. “President Trump frequently talks about how important first responders are to protecting the public,” said Silverio Caggiano, battalion chief with the Youngstown Fire Department and deputy chief with the Mahoning County Hazardous Materials Response Agency in Mahoning County, Ohio. “Here’s something his EPA can do to protect first responders and citizens: disclose these chemical identities so that we know what kind of risks we’re likely to encounter in the event of a spill or emergency.”

Sunoco proposes construction change for Mariner East 2, but meets fresh resistance - Sunoco’s plan to change the construction of its Mariner East 2 pipeline in Chester County’s West Whiteland Township is stirring opposition from residents and local lawmakers only five months after a botched drilling operation there spilled fluid, punctured an aquifer and turned drinking water cloudy in some private wells.The company wants to abandon its controversial method of horizontal directional drilling (HDD) at two West Whiteland sites where a court temporarily halted the practice last summer as part of a statewide action in response to dozens of spills along the 350-mile route.The Environmental Hearing Board ordered Sunoco to conduct a “re-evaluation” of 63 sites where fluid was spilled, in an effort to determine whether local geology was suitable to the drilling technique even though state permits were issued and construction was underway.At the points where the pipeline route crosses North Pottstown Pike and Swedesford Road, an independent geologist hired by Sunoco concluded, horizontal drilling should either be sharply curtailed or scrapped altogether, because continuing the work would likely result in more spills.At the Pottstown Pike site, the consultant said, the drilling would likely have the same result because of a “fractured” geological formation some 70 feet below the surface.“Based on the further analysis of the underlying geology and hydrogeological factors such as fractured geology, cobble and voids, the original design was determined to pose a moderate to high risk of subsurface and/or surface loss of drilling fluid,” the report by Groundwater & Environmental Services said.At the Swedesford Road site, the drilling technique is unsuited to the limestone geology, and a method should be used that won’t spill drilling fluids, the report said. Sunoco has accepted the geologist’s reports, and is now proposing to build the pipeline in an open trench and through a conventional bore at the West Whiteland sites, according to two “re-evaluation” documents on the Department of Environmental Protection’s web site.

Lawmaker: Natural gas lobby too influential in severance tax debate - A Democratic lawmaker from Delaware County says the current debate over the severance tax is unduly influenced by the natural gas industry, which has spent millions lobbying lawmakers. With more than 200 gas industry lobbyists registered in Harrisburg, State Rep. Greg Vitali says the industry has spent $3.7 million on lobbying the Capitol this year alone. Using campaign finance reports, lobbying disclosure reports, lobbying registration statements and lawmakers’ statements of financial interests, Vitali has regularly tracked industry spending. He says in order to pass a severance tax, House members would have to agree to changes in the way the Department of Environmental Protection regulates the industry. “This is all because of the huge clout of the natural gas industry and the contributions they give to the legislature and the money they spent lobbying the legislature,” he said. The current severance tax deal includes speeding up natural gas permit reviews and curbing the state’s efforts to reduce methane emissions. Vitali says the changes to DEP’s permitting rules would hurt its ability to regulate. “They are so influential in this building that In order to get a severance tax of less than one percent,” he said, “we have to give this to them as a way to make amends.” The industry has also spent $7.7 million on campaign contributions since 2007. Senate President Pro Temp Joe Scarnati has received $483,500, according to Vitali’s calculations. 

Commission releases fracking ban proposal for Delaware River - The Delaware River Basin Commission released a draft of the new proposals late Thursday that would permanently ban fracking, but environmentalists fear that the measures don't go far enough.The proposed rules outline a permanent ban on fracking in the region, which environmentalists have long called for, but would still allow for fracking wastewater to be dumped in the river basin. The proposed rules would also allow for water to be taken out of the river basin and shipped off for fracking use elsewhere. "There's some really big success in the proposed regulations," said Maya van Rossum, the Delaware Riverkeeper. But she added that she had "mixed feelings" about the rest of the proposal."It still puts the watershed at risk," van Rossum said.  "High volume hydraulic fracturing in hydrocarbon bearing rock formations is prohibited within the Delaware River Basin," the proposed rules state.Natural gas producers in the region spoke out against the proposed ban, claiming that it only served to deny citizens the right to develop their own property."[The proposal] flies in the face of settled science and common sense environmental regulation, and would bring self-inflicted economic harm to [Pennsylvania]," David Spigelmeyer, the president of the Marcellus Shale Coalition, said in a statement.If approved, the new rules would make permanent a temporary moratorium on fracking in the region that has been in place since 2010. Environmentalists still worry, however, that allowing for fracking waste to be dumped in the region will undercut a fracking ban."Banning fracking but then allowing the dumping of fracking waste undoes the whole purpose of the ban in the first place, which is to protect our water," said Jeff Tittel, the director of the New Jersey Sierra Club, in a statement Thursday.  “This is a dirty water deal hidden behind a fracking ban," Tittel added.

US FERC approves 223 MMcf/d Millennium Pipeline expansion in New York - Millennium Pipeline has received certificate approval from the US Federal Energy Regulatory Commission for the Eastern System Upgrade project, which would add 223 MMcf/d of capacity on the eastern end of its system in New York.The project will increase capacity along the constrained portion of Millennium's system, specifically from the Corning Compressor station in Steuben County to the interconnect with Algonquin Gas Transmission at Ramapo in Rockland County.By alleviating this constraint, production within the area will have the potential to increase and deliver more gas into Algonquin, according to Platts Analytics' Bentek Energy. The increase in deliveries will in turn place downward pressure on AGT city-gate prices.The project entails a roughly 7.8-mile-long, 30- to 36-inch-diameter loop in Orange County known as the Huguenot Loop, two new 24,000 hp compressor stations in Sullivan and Delaware counties and other modifications to existing Millennium stations.Millennium has precedent agreements with nine shippers, all of which are local distribution companies or municipalities, for about 91% of the capacity and is marketing the remaining 20,500 Dt/d, according to FERC's certificate order (CP16-486), issued late Tuesday.Unlike Millennium's Valley Lateral project, which has been caught up in a legal tangle between FERC and the New York State Department of Environmental Quality over a water quality certificate, the Eastern System Upgrade has already received air and water quality approval from the state agency. Construction of the Valley Lateral, which would serve a new power plant, was held up when the 2nd US Court of Appeals on November 2 granted an administrative stay of the notice to proceed with construction, at the request of the DEC.

Transco natgas expansion approved to start: (Argus) — The US Federal Energy Regulatory Commission (FERC) has given Transcontinental Gas Pipeline permission to begin flows on its Virginia Southside II expansion project in the mid-Atlantic US. The 241mn cf/d (7mn m³/d) expansion was designed to provide additional service to markets in southern Virginia, including deliverability to Dominion Virginia Power's new 1,580MW combined-cycle natural gas-fired power plant in Greensville County, Virginia, when that plant comes on line. The $191mn pipeline project includes the new 4-mile (6km) Greensville Lateral in Virginia, as well as metering and compressor station facilities in Virginia, South Carolina and North Carolina. The project will boost flows from Transco's compressor station 210 pooling point in Mercer County, New Jersey, and from its compressor station 165 pooling point in Pittsylvania County, Virginia, to a proposed delivery point on the Greenville Lateral. The $1.3bn Greensville County power plant will acquire full transportation rights on the Virginia Southside II expansion once the plant begins service, according to filings with FERC. Dominion began construction on the plant in June 2016, and expects it to begin commercial operations in late 2018.

FERC sued over alleged ‘unconstitutional’ granting of pipeline certificates - In another challenge to the expansion of natural-gas pipelines, a conservation group is accusing a federal agency of unlawfully allowing the taking of private land in a complaint filed in the U.S. District Court in Trenton. The lawsuit filed against the Federal Energy Regulatory Commission by the New Jersey Conservation Foundation is the latest legal entanglement involving the 120-mile PennEast pipeline, a project spanning two states and crossing the Delaware River. The $1 billion project, facing strong opposition in New Jersey and Pennsylvania, has been troubled by numerous delays, including the refusal of property owners to allow PennEast Pipeline LLC access to land along the route.The standoff has prevented the company from submitting all the information it needs to obtain crucial permits from the New Jersey Department of Environmental Protection. To obtain access, the company is seeking to gain final approval for the project from FERC, a decision that would give it the power of eminent domain over those properties. In the 20-page filing with the federal court, the complaint advances what its plaintiffs argue is a first-of-its-kind legal challenge, alleging the federal agency is unlawfully allowing companies to seize private property through eminent domain for pipeline construction. The lawsuit, filed by the Eastern Environmental Law Clinic and Columbia Environmental Law Clinic, also argued the agency failed to demonstrate the project is needed, a point repeatedly made by opponents of the pipeline. “The Fifth Amendment says that private property can only be taken for public use, and FERC’s pipeline review process doesn’t pass that test,’’ said Tom Gilbert, campaign director of the New Jersey Conservation Foundation. 

Enviros raise new challenge to FERC eminent domain process - New Jersey environmentalists are the latest pipeline critics to take aim at how natural gas projects are approved and developed.The New Jersey Conservation Foundation last week sued the Federal Energy Regulatory Commission, arguing that the agency's practice of granting eminent domain power to pipeline developers is unconstitutional.The group argues that FERC's process for approving pipelines and then granting developers the power to take private property falls short of constitutional standards that require such property takings to be for a public use. The lawsuit, filed in the U.S. District Court for the District of New Jersey, contends that the agency often approves pipelines that are not really needed."FERC's failure to ensure that the only pipelines built are those that are absolutely required to be built has burdened the parties FERC was meant to protect," the filing says. "While a constitutional public use analysis may be time-consuming or complex, that does not excuse FERC from doing its job."The conservation group claims it is harmed by FERC's process because the proposed PennEast pipeline, under review by the agency, passes through land the group owns in western New Jersey. But the lawsuit does not focus on proceedings for that project; instead, it broadly challenges FERC's pipeline approval processes. Landowners along pipeline routes have shown increasing concern about the use of eminent domain by developers. At least three similar challenges are pending: a lawsuit in Ohio focused on the Nexus pipeline, a lawsuit in Virginia focused on the Mountain Valley pipeline, and a lawsuit in Washington, D.C., focused on both the Mountain Valley and Atlantic Coast pipelines.

Climate activists delay U.S. gas pipeline approvals: regulator (Reuters) - National environmental groups waging legal battles against energy projects are delaying approval of U.S. natural gas pipelines, a top federal energy regulator said on Thursday. The groups have lawyers who “understand how to use all of the levers of federal and state law to frustrate pipeline development,” Neil Chatterjee, the chairman of the Federal Energy Regulatory Commission (FERC), told a meeting of natural gas industry officials. Some recent approvals of natural gas pipelines, such as the Atlantic Coast Pipeline from West Virginia to North Carolina, have taken two years or more. Chatterjee said he hoped a timeline of two-plus years would not become the new industry norm. While industry officials have often complained about climate activists, Chatterjee’s comments, which he said reflected his opinion, are rare for a regulator.  He did not identify any specific green groups, but the Sierra Club and 350.org both have campaigns to reject pipelines filled with gas from hydraulic fracturing, or fracking, projects. The groups are fighting development of fossil fuels including oil, coal and fracked natural gas, because they say the production slows the transition to cleaner sources, like wind and solar power, and the conservation and storage of energy.

FERC chairman takes a break from discussing coal plan to slam pipeline protesters -   Federal Energy Regulatory Commission Chairman Neil Chatterjee took a break from discussing a high-profile plan to prop up coal and nuclear plants to criticize environmentalists' efforts to delay pipeline approvals.  Instead, Chatterjee used his remarks before the Natural Gas Roundtable to slam what he called the well-funded and legally savvy campaigns by climate change activist groups to significantly delay the natural gas pipeline approval process at FERC. The independent federal agency is in charge of overseeing the development of interstate oil and natural gas pipelines. Activists have targeted natural gas pipelines because of the perceived link between the drilling process known as fracking and pipeline development. The activists equate stopping FERC with stopping the fracking process since pipelines are the only way to transport shale-produced natural gas to the market."It is not hard to see that opposition to natural gas pipeline projects has become much more ideologically driven than it used to be," Chatterjee said. He said much has changed from when pipeline decisions might have been held up by local interests, such as a landowner or community, which focused on avoiding pipelines being built on their land. But anti-fossil fuel activism has turned pipelines into a much bigger issue that is slowing the agency's work.  "But what's new is this: increasing anxiety about carbon emissions has given rise to a national 'keep it in the ground' movement resisting any natural gas project as a matter of principle," Chatterjee said.  Adding to the national activist groups are the "political branches" of state and federal governments that "these pipeline opponents" now possess, alluding to members of Congress and state attorneys general that look to block fossil fuel development. "Now, what we see are well-funded, sophisticated, national environmental advocacy organizations who understand how to use all of the levers of federal and state law to frustrate pipeline development," Chatterjee said.He particularly noted the "clever" legal strategies employed by activist groups to confound the natural gas pipeline review process at FERC. Even if they do not win lawsuits, they manage to significantly slow the pipeline review while emboldening state opposition to pipeline development, he said.The FERC chairman also said it has become increasingly "evident that these folks are growing more confident in their chances in taking those challenges to the D.C. Circuit, in particular, and other federal appellate courts." Chatterjee said that affects FERC by forcing the agency to become "even more deliberate in its review processes to ensure that they will withstand judicial review."

The East Coast's pipeline wars: A cheat sheet - The expansion of natural gas infrastructure along the East Coast has created a seemingly endless queue of new pipeline battles involving landowners, environmentalists, states and the federal government. Some of the proposed pipelines have similar names. A handful have similar routes. Many have been in the news for years, while others seem to have sprung from nowhere. They're all accompanied by a nonstop stream of procedural and legal drama. Even the most astute pipeline watchers have trouble keeping it all straight. Was it Atlantic Coast or Atlantic Sunrise that just got approved? Wait, how many projects are on hold in New York? And aren't there nuns protesting somewhere? Here's a breakdown of some of the most interesting projects to help you avoid getting your wires — er, pipelines — crossed.

  • Constitution - Length: 126 miles  Route: Northeast Pennsylvania to central New York.  Status: Company wants FERC to waive a state-issued water permit.
  • Northern Access - Length: 99 miles and associated infrastructure. Route: Northwest Pennsylvania to western New York.  Status: Company appealing New York permit denial at 2nd Circuit, at FERC and in state court. 
  • Valley Lateral- Length: 7.8 miles. Route: Connects Millennium Pipeline Co.'s main line to a power plant in Orange County, N.Y.  Status: Construction halted pending arguments at 2nd Circuit.
  • PennEast - Length: 120 miles. Route: Northeast Pennsylvania to central New Jersey. Status: Awaiting final approval at FERC before reapplying to New Jersey.
  • Atlantic Sunrise. Length: 183 miles and multiple expansions and upgrades. Route: Southern Pennsylvania to northern Pennsylvania and upgrades across East Coast network Status: Approved by FERC; under construction.
  • Nexus - Length: 255 miles. Route: Eastern Ohio to southeastern Michigan.  Status: Approved by FERC; under construction. 
  • Rover - Length: 713 miles  Route: From processing plants in Pennsylvania, West Virginia and Ohio to delivery points in Ohio and Michigan. Status: Some segments in service, others under construction; completion expected in early 2018.  
  • Mountain Valley - Length: 303 miles. Route: Northern West Virginia to southern Virginia. Status: Approved by FERC; state permits pending.
  • Atlantic Coast - Length: 600 miles. Route: Northern West Virginia to eastern Virginia and North Carolina. Status: Approved by FERC; state permits pending.
  • Sabal Trail. Length: 515 miles. Route: Eastern Alabama to central Florida. Status: Partially in service; FERC is conducting supplemental review.

Atlantic Coast Pipeline faces another delay as NC officials push for more details --  The planned Atlantic Coast Pipeline, already more than a year behind schedule, could face further delays as North Carolina officials once again seek additional information on the project’s potential impacts to the communities the pipeline will traverse. The N.C. Department of Environmental Quality on Wednesday sent the pipeline’s developers a fourth round of questions about the economic benefits and environmental risks of the project. The unusual repeat request gives pipeline officials 30 days to respond and gives the agency 60 days to review their response. The energy consortium building the pipeline includes Charlotte-based Duke Energy and Dominion Energy in Richmond, Va. The proposed 600-mile pipeline would cross West Virginia, Virginia and North Carolina to bring natural gas from northern fracking operations to fuel Duke’s power plants in North Carolina and South Carolina. Duke said the Atlantic Coast Pipeline will submit a responses in less than 30 days. “We’re working on a response to the NC DEQ’s data request and will submit it in short order,” Duke said in a statement. “We don’t expect an impact to the overall project schedule.” Department of Environmental Quality spokeswoman Bridget Munger said the answers could spark further inquiries. “It really will depend on whether they provide the information requested, and once staff has reviewed it, what additional questions they will have,” Munger said of the timeline. 

A map of $1.1 billion in natural gas pipeline leaks -- When a crude oil pipeline is ruptured, it’s bad news, particularly if the oil gets into water, where it’s likely to impact wildlife or drinking water supplies. But when a natural gas pipeline busts, it can be far worse because of the volatility of the fuel, which is made up mostly of methane. Leaked natural gas can’t be recovered, it can build up in enclosed spaces and explode, and it is a potent greenhouse gas, with at least 30 times the warming potential of carbon dioxide over the long term. Between January 2010 and November 2017, the nation’s natural gas transportation network leaked a total of 17.55 billion cubic feet of mostly methane gas. That’s enough to heat 233,000 homes for an entire year, and it’s got the same global warming potential as the carbon dioxide emitted from a large coal-fired power plant over the course of a year. Pipeline incidents took nearly 100 lives, injured close to 500 people and forced the evacuation of thousands during that time, while costing about $1.1 billion. Click the below image to be redirected to the interactive version. Then, hover over the circles on the map for more details. (Note: It does not include the massive Aliso Canyon methane leak of a couple years ago because natural gas storage sites are not under the PHMSA’s jurisdiction.)

TransCanada sees US gas supply, demand growth seen as keys to future - TransCanada's US natural gas pipeline business is expected to provide the company its biggest financial boost by segment through the end of the decade thanks to growing Appalachian production and Gulf Coast demand for LNG exports, the operator said Tuesday. The efforts -- designed to carry more gas to residents, businesses, industrial plants and export terminals -- are bolstered by forecasts that output from the Appalachian Basin, which includes the Marcellus and Utica shale plays, will grow to over 40 Bcf/d in 2027 from 25 Bcf/d this year. The company also estimates that Gulf demand will increase by over 14 Bcf/d during the next 10 years. The outlook highlights TransCanada's increased focus on the US market through billions of dollars in new projects and expansions of existing pipelines. While adding long-term transportation contracts provides stability, the strategy also comes with potential roadblocks, especially on the regulatory front amid aggressive resistance from environmental and community groups. "As a company, we are prepared for those challenges that lie ahead," CEO Russ Girling said during TransCanada's annual investor day presentation webcast from Toronto. "While pipelines aren't perfect, we continue to believe they are by far the safest and most efficient method of moving both natural gas and crude oil to markets that need them." On the oil front, TransCanada has been working on boosting optionality through upgrades and cross-border opportunities. The company filed a "procedural" motion last week with the Nebraska Public Service Commission seeking permission to raise questions regarding the state regulator's decision on the new routing of the proposed Keystone XL crude pipeline, Dean Patry, senior vice president of TransCanada's liquids pipelines unit, said during the presentation. NPSC spokeswoman Deb Collins said in an email that TransCanada's motion for reconsideration is a routine filing with the commission having 60 days to rule on it. The NPSC ruled in a 3-2 vote on November 20 approving the company's "mainline alternative" for its Keystone XL pipeline, rather than the direct route.

Will US Oil Markets be Roiled by a New FERC Order? -- Last Wednesday, November 22, the Federal Energy Regulatory Commission acted on a Petition for Declaratory Order (PDO) by Magellan Midstream Partners in which the midstreamer asked for FERC’s blessing to establish a marketing affiliate to “buy, sell and ship” crude oil on pipelines owned by Magellan as well as pipes owned by other companies. Today Magellan does not have such an affiliate, although many of its competitors do. Most of those competitors use their affiliates to generate incremental throughput on their pipelines, sometimes by doing transactions that result in losses for the marketing affiliate, but that are still profitable for the overall company because the marketing arm pays its affiliated pipeline the published tariff transportation rate. FERC denied Magellan’s request, coming down hard on such transactions as “rebates” specifically prohibited by the law governing interstate oil pipelines. In today’s blog, we take a preliminary look at FERC’s Magellan order and what it could mean for U.S. crude oil markets.  The FERC finding spells out aspects of crude oil pipeline regulation that have been in place for over 100 years, but have been subject to varying degrees of interpretation and enforcement and are very different from the rules that cover natural gas and gas pipelines. As we discussed in Hey Crude – The Costs and Challenges of Building Crude Oil Pipelines, although crude and gas pipelines that cross state lines are both regulated by FERC, the laws and rules governing crude oil pipelines are based on an entirely different statute — the Interstate Commerce Act (ICA) instead of the Natural Gas Act (NGA) — and the evolution of FERC regulation of oil pipelines has a pretty tortured history ever since FERC took over this area of regulation from the Interstate Commerce Commission.  There are two important aspects of these ICA-based regulations relevant to the Magellan PDO. First, the rules for setting crude oil pipeline tariffs are somewhat ambiguous, to say the least. The tariffs aren’t necessarily based on costs, the approach to setting rates can vary over the life of a pipeline, and the rules have pragmatically mutated from time to time, to the extent that they can change without a lot of warning. All this provides both opportunities and risks that don’t exist to the same degree for gas pipelines. Second, the rules governing permissible transactions on crude pipes are quite different than those for gas pipelines, and are even more ambiguous than the crude oil pipeline tariff rules.

The Rejuvenation Of Natural Gas Processing Economics, Part 2  --NGL prices have been rising fast since the middle of this year, but the same cannot be said for the price of natural gas. So how does this market scenario play out for gas processors who make their money extracting NGLs from gas? It plays out pretty darn good. In Part 1 of this series, we looked at how the relationship between the price of NGLs versus natural gas can be assessed by the Frac Spread, and concluded that things are definitely looking up for gas processing economics. But we also concluded that the Frac Spread misses the impact of a few key factors, including the BTU value and composition of the inlet gas stream. So today we’ll see what it takes to incorporate those factors into our assessment and, in the process, do a deep dive into the math of gas processing to examine the relationship between volumetric capacity, gallons of NGLs per 1,000 cubic feet of natural gas (GPMs) and moles. Today, we continue our latest expedition into the wilds of gas processing. In Part 1, we reviewed the calculation methodology, the history and the pros and cons of the Frac Spread — the difference between the price of natural gas and the weighted average price of NGLs on a BTU basis. We noted that while the Frac Spread is a good indicator of the relative health of natural gas processing over time, it is not representative of the specific processing margin for a particular stream of input gas. That is because the Frac Spread does not take into account the quality of the gas being processed either in terms of the liquids content or the BTU content, nor does it factor in things like the operating efficiency of the plant or help determine if ethane rejection makes sense. (We’ll get to these issues in later episodes of this blog series.) These factors and others ultimately determine the quantity of NGLs that a given inlet gas stream can produce from a given gas processing plant. To incorporate these factors into gas processing margin calculations, we first have to understand how liquids content and BTU content are measured and then how to convert between gas volumes and liquid volumes, since we transform the input gas stream into both liquid and gas outputs in our processing plant.

A rumbling volcano halfway around the world could hit natural gas prices -- Scientists say a volcano in Bali has the potential to seriously affect natural gas prices if it blows, as research shows tropical eruptions typically bring on mild winters in the U.S. An eruption of Mount Agung, which has been rumbling since September and on Monday sent ash soaring 4.7 miles above sea level, could cool the earth for years, which traders say could usher in freezing temperatures across the U.S. and higher gas prices.  But research shows Northern Hemisphere winters tend to be warmer than usual following large tropical eruptions; an eruption also could trigger a Pacific Ocean El Nino by cooling tropical Africa, which could set the stage for milder conditions across much of the U.S. “If Agung does put a large enough mass of sulfur dioxide into the stratosphere, the global average temperature would be reduced for several years,” says Michael Mills of the National Center for Atmospheric Research, but "the regional and seasonal climate impacts would be more complex."

Traces of petroleum, lead found in water at Rover Pipeline work site - Test results showed "slightly elevated" levels of petroleum in water spilling from a Rover Pipeline construction site into wetlands near Pinckney, about 10 miles northwest of Ann Arbor. Rover Pipeline has taken steps to filter the water and has halted its pumping activities, designed to dry out the construction site near the northern crossing of Dexter-Townhall Road, until the necessary permits are issued. That could happen this week, said Matthew Konieczki, of the Michigan Department for Environmental Quality.The MDEQ issued a violation notice to Rover Pipeline on Oct. 13 after area residents reported water that smelled like gasoline spilling over the sides of a dewatering enclosure into the wetlands. "They have not done any pumping once they stopped, due to the violation notice letter," said Konieczki, who is an environmental quality analyst in the Water Resources Division of the MDEQ's Jackson District. Rover Pipeline stopped its pumping activities after receiving the violation notice and installed a carbon filter to address any contaminants in the water. "Rover is willing to address any contamination, even though not released by Rover's construction project, and has decided to employ a carbon filter system proactively to eliminate the flow of any preexisting contamination at the site," stated a letter dated Oct. 18 from Rover to the DEQ.

Michigan gets deal to keep controversial oil pipeline running | TheHill: Michigan Gov. Rick Snyder (R) and Enbridge Inc. reached a deal Monday for the company to increase safety precautions on its controversial Line 5 petroleum pipeline under the Straits of Mackinac. The agreement means Enbridge can, for the time being, keep operating the line, despite intense scrutiny in recent years from regulators and environmentalists. Line 5 is decades old, and regulators have said it is at risk of leaking due to corrosion, anchors, missing coating and other factors.“Business as usual by Enbridge is not acceptable and we are going to ensure the highest level of environmental safety standards are implemented to protect one of Michigan’s most valuable natural resources,” Snyder said in a statement. “The items required in this agreement are good strides forward. The state is evaluating the entire span of Enbridge’s Line 5 pipeline and its future, but we cannot wait for the analyses to be completed before taking action to defend our waterways.” The binding deal means Enbridge must replace a portion of the line under the St. Clair River, study the feasibility of replacing the line under the Straits of Mackinac, shut down the line during adverse weather and improve monitoring for leaks, among other steps. “We hope the agreement is a step in a positive direction to demonstrate our commitment to doing the right thing to serve Michigan and protect the waters of the Great Lakes. The Great Lakes are a treasure that must be preserved now and for future generations,” Enbridge said in a statement of its own. 

Enbridge oil pipelines in Straits, St. Clair River could go in tunnels under new pact  - Canadian oil transport giant Enbridge's underwater pipeline in the St. Clair River would run under the river inside a tunnel, and its controversial pipeline at the bottom of the Straits of Mackinac would be studied for the same treatment as part of an agreement announced Monday between the company and the state of Michigan. Enbridge also will be required to shut down transmission of oil through Line 5 in the Straits of Mackinac during adverse weather conditions that would limit oil recovery efforts in the event of a spill, according to the agreement.   Under stipulations detailed in the agreement, the state is requiring Enbridge to:

  • Replace the portion of Line 5 that crosses beneath the St. Clair River with a new pipe in a tunnel under the river, a site where similar pipeline construction for Line 6B was successfully accomplished a few years ago. The St. Clair River is an important source of drinking water and an environmentally sensitive location along the pipeline. The underground replacement line will significantly lower the risk that oil could reach the river or the Great Lakes.
  • Undertake a study, in conjunction with the state, on the placement of a new pipeline or the existing dual pipelines in a tunnel beneath the Straits of Mackinac. The state’s alternative analysis identified tunneling as an alternative to the current pipelines. This study will examine several possible techniques and allow a much more detailed examination on the technical feasibility of such a tunnel.
  • Temporarily shut down operation of Line 5 in the Straits during periods of sustained adverse weather conditions, because those conditions do not allow effective response to potential oil spills. “Sustained adverse weather conditions” are defined in an appendix of the agreement.
  • Assess the possible installation of underwater technologies, including cameras, to better monitor the pipeline beneath the Straits of Mackinac.
  • Implement technologies that improve the safety of Line 5 in the straits by allowing faster detection and a more immediate response in the event of a spill.
  • Implement measures to mitigate a potential vessel anchor strike on Line 5 beneath the straits. A vessel anchor strike was identified in the final alternatives analysis as one of the most serious threats to Line 5 safety in the straits.

Environmental Groups Blast Michigan Officials for 'Trust' in Pipeline Operator -- Environmental groups are attacking an agreement between Michigan and Canadian oil transport company Enbridge, Inc. that set a timeline to determine the future of a controversial pipeline running across a channel where Lakes Huron and Michigan come together.  The 645-mile pipeline, Line 5, lies at the bottom of the Straits of Mackinac, a five-mile-long environmentally sensitive stretch of water that serves as a center piece in Michigan's tourist industry. It cuts through the state as it runs from western to eastern Canada, bringing 23 million gallons of oil and liquid natural gas across the straits between Michigan's Upper and Lower peninsulas—an area noted for its choppy waters, unpredictable currents and subzero temperatures. "I can't imagine another place in the Great Lakes where it'd be more devastating to have an oil spill," Dave Schwab, an expert in hydrodynamics from University of Michigan, told a Motherboard correspondent in 2015. Monday's agreement between Gov. Rick Snyder and Enbridge was designed to address immediate concerns about the 64-year-old twin pipeline. Under the agreement, Enbridge is required to halt pipeline operations if waves in the straits reach eight feet or higher for more than an hour.  The deal , which doesn't preclude a permanent shut down of Line 5, requires Enbridge to evaluate three options for routing the pipeline through a tunnel or trench on or beneath the lakebed by June 2018. Enbridge also said it would take steps to prevent pipeline damage from ship anchors, and increase its monitoring by placing cameras and other devices near the pipeline. It would also expedite plans to detect potential ruptures and respond to spills.

Well pump spools up at Boulter / 11-23-17 -- As of last week, an oil pump jack is humming at the Boulter 1-17 site. After secondary drilling, trucks arrived with pump components in mid-November. Large square storage containers occupy the north end of the site, along with a generator and equipment. “Escaping natural gas burns in a release flare near the well head.” State authorities are unable to confirm whether the well's target depth has been reached or if hydrocarbons have been discovered. Under state law, operators are protected from divulging drilling results until 90 days after drilling concludes. The 90-period is expected to end sometime in January 2018. Absent of confirmation, well pump installation suggests the lessor, Interstate Explorations, has found or is close to finding oil and gas deposits. The pump jack, visible from Sisson Road, operates intermittently throughout the day. Boulter 1-17 received a permit to utilize hydraulic fracturing. An estimated 950,000 gallons of fluid were to be used in fracking Boulter 1-17. However, a well expected to utilize fracking may be completed conventionally, said Mark Snow with the Michigan Department of Environmental Quality Oil, Gas, and Minerals Division. Until drill records are made public, it will be impossible to confirm whether Boulter 1-17 was fracked. Smaller completion rigs fracture the injection zone after the main well bore is drilled. At least one smaller rig was used at Boulter 1-17 after the initial drilling rig was dismantled. Boulter 1-17 targeted the Trenton-Black River formation, a large natural gas and oil deposit stretching from New York state into Kentucky, West Virginia, Ohio, Michigan and Quebec. A DEQ permit specifies Boulter 1-17's target depth at 6,500 feet. Trenton-Black River has yet to be tapped in Barry County. If Boulter 1-17 successfully extracts oil and natural gas from Trenton-Black River, it could attract additional companies eager to capitalize undeveloped oil and gas fields. More likely, Interstate Explorations may redeem dozens of leases it holds throughout Barry County, most of which are in Carlton Township.

Everglades oil well application rejected - A proposal for an exploratory oil well in the Everglades of western Broward County was rejected again Monday by state regulators, although this is unlikely to be the final act in a Miami family’s persistent attempts to extract oil from its land. Noah Valenstein, secretary of the Florida Department of Environmental Protection, signed a final order turning down the application of Kanter Real Estate LLC to drill in marshy wilderness about six miles west of Miramar. In issuing this decision, the department rejected the recommendation for approval by a state administrative law judge.“The Florida Department of Environmental Protection is committed to protecting Florida’s one-of-a-kind natural resources, including the environmentally sensitive Everglades, and administering Florida’s environmental laws,” the department said in a written statement accompanying the order. “After careful review and consideration, DEP today executed a final order denying Kanter Real Estate’s application for a drilling permit in the Everglades.” Company president John Kanter said the family was “very disappointed” with the decision, since the judge had recommended approval after hearing all the evidence. He declined to discuss the family’s legal options but made clear that the fight was far from over. “We will be assessing our options and take a suitable course of action to protect our property rights in the face of today's decision by the DEP secretary to ignore the findings and recommendation of impartial and unbiased judge,” he said.

Spilled pipeline oil near Pointe a la Hache to be burned: Coast Guard -  Contractors responding to a pipeline leak in marsh near Pointe a la Hache in lower Plaquemines Parish will use fire to remove the the majority of the oil on Friday (Dec. 1), the U.S. Coast Guard announced late Thursday.The pipeline owned by XTO Energy was reported to be leaking to the Coast Guard at 2:40 p.m. Thursday. The initial report indicated that about 504 gallons of oil were discharged before the pipeline was secured, but by Thursday night, officials said they'd already removed 1,260 gallons of "product" through the use of boom, sorbent pads and skimmer packages.The in-situ burn will begin at 11 a.m. Friday, and will monitored from the air.Personnel from Teichman Group LLC, OMI Environmental Solutions, New Orleans, National Oceanic and Atmospheric Administration, Louisiana Oil Spill Coordinators Office, Louisiana Department of Environmental Quality, and Louisiana Wildlife and Fisheries are responding to the incident. Coast Guard officials said there were no reported injuries and no waterway restrictions resulting from the spill. The cause of the pipeline leak is under investigation.

The United States continues trend toward exporting more gasoline than it imports – EIA - Despite record high gasoline consumption, the United States is on pace to export more gasoline than it imports for the second year in a row. Changes in regional markets, increased demand for exports, and high refinery runs are once again leading to the United States to be a net exporter in 2017. In 2016, the United States became a net exporter of gasoline for the first time on an annual basis with net gasoline exports of 56,000 barrels per day (b/d). Through September 2017 (the most recently available monthly data), the United States averaged net gasoline exports of 55,000 b/d. The shift toward net exports of gasoline on an annual basis has been a long-running trend.U.S. gasoline imports and exports are highly seasonal. The United States has typically been a net importer of gasoline in spring and summer months, whn domestic consumption increases, and a net exporter in winter months, when demand is lower. However, for every month between April and August 2017, the United States set either record low net imports or record high net exports (Figure 1). Almost year-round net gasoline exports is a major change for U.S. gasoline markets, which is the result of one long-term trend and two more recent trends.  Changes in trends of gasoline production and consumption in the Midwest United States, in part, have driven this trend. Historically, the U.S. Gulf Coast (Petroleum Administration for Defense District (PADD) 3) supplied refined products to other regions of the United States where demand exceeded supply, such as the Midwest (PADD 2) and the U.S. East Coast (PADD 1). While the East Coast still relies on supplies from the Gulf Coast and still remains a large net importer of gasoline—619,000 b/d in 2016, the Midwest has reduced its need to draw supplies from the Gulf Coast in recent years. Midwest refineries now are running at higher rates and increased capacity, resulting in more Midwest gasoline demand being met from in-region production. Between 2006 and 2016, Midwest receipts of gasoline from the Gulf Coast declined by 278,000 b/d to 273,000 b/d.

Second wave of US LNG to be based on 'free' gas: NextDecade Corp - The 'second wave' of US LNG production is coming in the early 2020s and will be based on essentially free gas, according to project developers NextDecade Corp. Speaking at the CWC LNG Summit in Lisbon Thursday, NextDecade CEO Kathleen Eisbrenner said her company had "the lowest cost, reliable LNG project in the world," and that it would be "the leader of the second wave of US LNG." That US LNG can be the world's lowest cost is a big claim, especially when set against the riches of Qatar's North Field and Iran's geologically connected South Pars. This giant gas accumulation produces large quantities of natural gas liquids (NGLs), which effectively underpins the production of LNG with large economies of scale. However, similar claims are being made by NextDecade about US LNG, as well as by another US second wave development company Tellurian. The basic argument is that gas output from the Permian basin, the US shale oil industry's hottest hot spot, is going to rise hugely, not because it is necessarily wanted, but because it will be produced as associated gas alongside the oil. According to Eisbrenner, drilling and completion spending in the Permian basin will double year-on-year in 2018 to make up 44% of all US D&C spending, up from just 20% in 2014. The gas produced cannot be reinjected, and it cannot be flared for more than very short periods. It must, therefore, be evacuated. Producers will pay for it to be taken away. Eisbrenner said that gas production in the Permian Midland would have a breakeven cost of negative $6.31/MMBtu. She estimated breakeven for gas production in the Permian Delaware at negative $2.69/MMBtu. Whether or not these calculations really stand up to scrutiny, the prospect of big increases in Permian basin gas production has prompted a plethora of new pipeline proposals to take that gas to a market or a point where markets can be accessed. Four projects, with total capacity of 6.4 Bcf/d, have been proposed between Waha and Agua Dulce on the Gulf Coast, but the gas will still need to be used and, most likely, liquefied for export.

UTA research finds dangerous bacteria in groundwater near Texas gas drilling sites - “Oil and gas companies are committed to protecting groundwater,” Todd Staples, president of the Texas Oil & Gas Association, said.   About the bacteria that researchers found, Staples said the connection to gas drilling is “based on proximity and nothing more."The research, UTA's Schug said, does point to chemically-altered water sources as a friendly environment for some nasty organisms.One of the study authors, Paula Stigler-Granados, assistant professor at the UTHealth School of Public Health in San Antonio, said these bacteria could cause gastrointestinal illnesses along with rashes and eye and ear infections. The microbes are particularly worrisome for the very young, the elderly and those with compromised immune systems."There's a lot of views that groundwater is clean and that it doesn't need to be filtered,” she said. “There are people who have lived there all their lives thinking, 'I've drank this water forever and I'm fine.’ It might not be the same [water]." "The potential contribution of these microbes to these health effects is probably understudied, underappreciated, unknown," Schug said. Staff and students at the CLEAR Lab have conducted extensive research about water quality in Texas, mostly focused on chemicals. It was only recently that they expanded the scope to include microorganisms. Some bacteria are known to thrive in more hostile environments. In 2016, Ohio State University researchers found a new genus of bacteria — which they named Frackibacter — in an oil well and gas wells. "As we've been involved more in conversations with oil and gas operators and even other industries looking to recycle waste water, you hear more and more concern about how microbes are interacting with those systems," Schug said.

Oil and gas industry is causing Texas earthquakes, a 'landmark' study suggests - An unnatural number of earthquakes hit Texas in the past decade, and the region's seismic activity is increasing. In 2008, two earthquakes stronger than magnitude 3 struck the state. Eight years later, 12 did. But for any given earthquake, it is virtually impossible to tell whether humans or nature triggered the quake. There are no known characteristics of a quake, not in magnitude nor in the shape of its seismic waves, that provide hints to its origins. A cluster of earthquakes around a drilling project can, at best, suggest a relationship. “The main approach has been to correlate the location to where there has been human activity,” said Michael Blanpied, a USGS geophysicist and co-author of the new study.The study authors took a different approach in the new work — they hunted for deformed faults below Texas. “This technique is called high-resolution seismic reflection imaging,” Magnani said. Seismic reflection is the same tool that allows extractors to find oil and gas deposits in underground structures. To collect seismic reflection data, an artificially generated wave ripples through the ground and reflects back to the surface, like light off a mirror. The result is “a little bit like an ultrasound,” Magnani said, revealing not baby toes but twisted rock.The scientists compared the Texas earth with Mississippi, another seismically active region that, like Texas, is not close to a turbulent edge of a tectonic plate. Unlike Texas, though, north Mississippi has a much longer history of recorded earthquakes, going back to the early 1800s.An underground ultrasound revealed that, beneath Texas, the most recent signs of active faults were in a geologic layer 300 million years old — 70 million years before the first dinosaur took its first step. All the younger layers above it were stable.“All the displacement was stopping at a layer that is 300 million years old,” Magnani said. “The fault did not move after that layer was deposited.” In the Mississippi region, in contrast, the rock told a story of continuous fault activity, unbroken for the last 65 million years.

Drilling Reawakens Sleeping Faults in Texas, Leads to Earthquakes - Since 2008, Texas, Oklahoma, Kansas and a handful of other states have experienced unprecedented surges of earthquakes. Oklahoma’s rate increased from one or two per year to more than 800. Texas has seen a sixfold spike. Most have been small, but Oklahoma has seen several damaging quakes stronger than magnitude 5. While most scientists agree that the surge has been triggered by the injection of wastewater from oil and gas production into deep wells, some have suggested these quakes are natural, arising from faults in the crust that move on their own every so often.  Now researchers have traced 450 million years of fault history in the Dallas-Fort Worth area and learned these faults almost never move.  “There hasn’t been activity along these faults for 300 million years,” says Beatrice Magnani, a seismologist at Southern Methodist University in Dallas and lead author of a paper describing the research, published today in Science Advances. “Geologically, we usually define these faults as dead.”  Magnani and her colleagues argue that these faults would not have produced the recent earthquakes if not for wastewater injection. Pressure from these injections propagates underground and can disturb weak faults. The work is another piece of evidence implicating drilling in the quakes, yet the Texas government has not officially accepted the link to one of its most lucrative industries. Magnani and her colleagues studied the Texas faults using images of the subsurface similar to ultrasound scans. Known as seismic reflection data, the images are created by equipment that generates sound waves and records the speeds at which the waves bounce off faults and different rock layers deep within the ground. Faults that have produced earthquakes look like vertical cracks in a brick wall, where one side of the wall has sunk down a few inches so the rows of bricks no longer line up. Scientists know the age of each rock layer—each row of bricks--based on previous studies that have used a variety of dating techniques. The seismologists compared images of faults in north Texas with images of other faults that have been active throughout geologic history. When Magnani and her colleagues examined the New Madrid faults, they saw evidence of earthquakes—the horizontal rows of bricks were offset at the fault line--from the distant past into the present. But images of the north Texas faults showed zero disturbances in the last 300 million years.

Okla. company cuts well volume after seismic shakes - A spate of small earthquakes thought to be caused by fracking forced an Oklahoma oil and gas company to curb volume and pressure at an oil well near the city of Yukon on Monday, the Oklahoma Corporation Commission said. Citizen Energy halved the pressure and volume of the well when a series of quakes that had begun last week continued after the weekend. The biggest earthquake in the series came in at magnitude 2.9, according to the Oklahoma Geological Survey. They were likely caused by fracking operations in the area, said commission spokesman Matt Skinner. Oklahoma has weathered an unusual number of earthquakes over the past few years, most of which have been attributed to saltwater disposal operations that pump oil and gas waste through the Arbuckle rock layer. "There are no Arbuckle disposal wells in that area," Skinner said. "The quakes are all located around the location of a well completion operation"

Transcanada asks Nebraska to reconsider order on Keystone route (Reuters) - TransCanada Corp has asked the Nebraska Public Service Commission to reconsider its order approving an alternate route for the Canada-U.S. Keystone XL pipeline, according to a filing posted on the commission’s website on Monday.  The Canadian pipeline company is seeking a “clarification” on the PSC’s Nov. 20 decision, a TransCanada spokesman said. The approved line was not TransCanada’s preferred route for the Keystone XL pipeline, but for a more costly alternative that would add 5 miles (8 km) of pipeline. “Keystone requests the Commission reconsider its order dated November 20, 2017, in accordance with this motion,” said the order, which was submitted on Friday. The PSC voted 3-2 to approve a route for TransCanada Keystone XL pipeline through Nebraska, removing a big regulatory obstacle for the long-delayed project backed by President Donald Trump, but leaving its future shrouded in legal and market uncertainty. In addition to the alternate route for the pipeline, the commission’s approval covered an additional pumping station and related transmission lines. State and federal officials said it was unclear if the route required any permits in addition to those already secured for the preferred route. TransCanada Chief Executive Officer Russ Girling said in a statement last week that the company would review the commission’s decision to assess the impact on the project’s cost and schedule.

Lawsuit over Keystone XL pipeline can go ahead - A federal judge has ruled that a lawsuit brought by environmentalists over the Trump administration's approval of the Keystone XL pipeline can proceed. The decision comes just two days after Nebraska regulators lifted the final regulatory obstacle to the project. It creates a potential roadblock for pipeline operator TransCanada's long-stalled project to transport heavy Canadian crude to U.S. refining hubs.On Wednesday, U.S. District Judge Brian Morris rejected efforts by the Trump administration and TransCanada to have the lawsuit dismissed. The administration argued that no further environmental reviews were necessary when President Donald Trump approved construction of Keystone XL.The environmentalists said the State Department and other agencies relied on outdated environmental reviews for the Keystone XL pipeline and did not consider relevant information when Trump issued his executive action in January. "Once again, the courts are serving as a critical backstop against this administration's attempts to flout the law for the benefit of corporate polluters," said Doug Hayes, senior attorney at Sierra Club, in a statement.

Judge allows lawsuit over Keystone XL pipeline to move forward | TheHill: A federal judge on Wednesday allowed a lawsuit over a key permit for the Keystone XL oil pipeline to move forward. U.S. District Judge Brian Morris rejected a request from the Trump administration and developers of the Keystone XL pipeline to throw out the lawsuit. The Indigenous Environmental Network, North Coast River Alliance and others challenged the presidential permit issued by the Trump administration in March allowing the pipeline to cross the U.S.-Canada border. The permit was issued using older environmental assessments that opponents say need to be updated before a cross-border permit can be issued. The Trump administration and developer TransCanada argued the lawsuit should be dismissed due to jurisdictional concerns. Morris, an appointee of former President Barack Obama, rejected that request on Wednesday. Opponents of Keystone XL celebrated the decision Wednesday. Their lawsuit against the federal permit is one of the key roadblocks still facing the Keystone pipeline. A Nebraska regulatory commission this week issued a permit allowing the construction of the pipeline in the state. That decision is subject to legal challenges, and TransCanada is analyzing the economics of building the proposed $8 billion pipeline before moving forward.

TransCanada contacting landowners as fate of rerouted Keystone XL pipeline uncertain -  TransCanada has begun contacting Nebraska landowners along the newly approved path for its Keystone XL pipeline as the company ponders whether or not to build. "We're not standing still," said Dean Patry, TransCanada's senior vice president for liquids pipelines, speaking Tuesday to attendees of the Calgary-based company's annual investor day in Toronto. Patry was asked, but gave no timeline for when TransCanada executives will make a final investment decision on the pipeline. The soonest the company hopes to begin construction is next year, a decade after the 36-inch, $8 billion pipeline was first proposed. It would run 1,184 miles from Hardisty, Alberta, to Steele City, Nebraska, connecting there with the existing Keystone pipeline to carry Canadian oil sands to the U.S. Gulf Coast. The Keystone XL's fate has never been certain, but Nebraska regulators added to that uncertainty last week by rejecting TransCanada’s preferred route for the pipeline in favor of another route through this state. TransCanada has asked the Nebraska Public Service Commission for clarity on its decision, but says it isn't trying to contest the approved route. The Public Service Commission determined TransCanada's preferred route wasn’t in the public interest because it did not take advantage of an existing utility corridor. Instead, the commission approved a route that more closely follows the original Keystone pipeline, which was completed in 2010. That approved route — the “mainline alternative” — would carry the pipeline through Keya Paha, Boyd, Holt, Antelope, Madison and Stanton counties before meeting up with the existing pipeline and continuing through Colfax, Butler, Seward, Saline and Jefferson counties. The change means TransCanada would need to deal with new landowners, plan and build more pumping stations, cut through more regulatory red tape and face the probability of fresh legal challenges from pipeline opponents, who argue the commission's decision was in error. That process could add months, even years, to the project timeline.

TransCanada recovers 44,400 gallons of oil from Keystone pipeline spill site (Reuters) - TransCanada Corp said on Friday it has recovered 44,400 gallons, or 1,057 barrels, of oil from the Keystone pipeline spill site at Amherst, South Dakota. An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota. The company had shut down its 590,000 barrel-per-day Keystone pipeline, which links Alberta’s oil sands to U.S. refineries, on Nov. 16 after a 5,000-barrel spill. It has not yet set an expected restart date for the pipeline, which is one of Canada’s main crude export pipelines. Additional excavation will be conducted beyond Sunday for soil remediation purposes, the Calgary-based company said, adding, it has about 170 personnel round-the-clock on the site engaged in clean-up activities. Preliminary inspections of the damaged section will be completed on site by both TransCanada and U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) staff, then sent to Washington, D.C., for an investigation by the National Transportation Safety Board’s Metallurgical Laboratory, the company said. “As a safety precaution, TransCanada sampled one residential water well yesterday at a location about 1.5 miles from the site to alleviate any concerns — all test results were normal,” TransCanada added. 

Regulators suspect construction damage caused Keystone spill - Mechanical damage to the Keystone pipeline that occurred when it was built may be responsible for the leak of 5,000 barrels of crude oil into a rural part of South Dakota earlier this month, federal officials say.A "corrective action order" issued by the Pipeline and Hazardous Materials Safety Administration on Tuesday says the pipeline failure that led to the spill was a rupture that "has characteristics of mechanical damage from original construction" in 2008.PHMSA's preliminary analysis suggests that the failure may have been caused by damage to the pipe and a protective coating that covers the metal, associated with a weight sometimes placed on pipes to hold them down "in areas where water could potentially result in buoyancy concerns."The broken portion of the pipeline will undergo testing to inform the agency's ongoing investigation into what caused the rupture. PHMSA said the pipeline section that failed was manufactured by Berg Steel Pipe Corp.Cleaning and leak detection tools were in use on the pipeline at the time of the rupture and had already passed the failure site without detecting any problems and are not believed  to have contributed to the leak, according to PHMSA. TransCanada Corp.'s Keystone pipeline runs from Hardisty, Alberta, to Patoka, Ill., and on to the U.S. Gulf Coast. Following the leak on Nov. 16, the pipeline was shut down from Alberta to Illinois. TransCanada got the go-ahead to restart operations at reduced pressure Tuesday after excavating and replacing the ruptured pipeline segment.

3 Major Spills in 7 Years: Keystone Has Leaked Far More Than TransCanada Estimated -- TransCanada's existing Keystone pipeline has already leaked a significant amount of oil three times in less than seven years . That's a much higher rate than the company predicted in its risk assessments provided to regulators, Reuters reported. Since the 2,147-mile pipeline began operating in 2010, it has gushed 5,000-barrels just this month in Marshall County, South Dakota, and about 400 barrels each in Hutchinson County, South Dakota in 2016 and in Sargent County, North Dakota in 2011.  However, TransCanada's spill risk assessment estimated that the chance of a leak of more than 50 barrels to be “not more than once every seven to 11 years over the entire length of the pipeline in the United States,"  And in South Dakota, where the line has leaked twice, the estimate was for a “spill no more than once every 41 years."  The spill risk analysis was conducted by international risk management company DNV GL, which did not respond to Reuters' request for comment.  TransCanada could lose its permit to operate the Keystone in South Dakota if an investigation into this month's massive leak determines that the pipeline operator violated its license. Conditions include construction standards and environmental requirements.  “They testified that this is going to be a state-of-the-art pipeline," South Dakota Public Utilities Commission member Gary Hanson told Reuters. “We want to know the pipeline is going to operate in a fashion that is safe and reliable. So far it's not going well."

With US leak repaired, Keystone pipeline is set to reopen - France 24: - The Keystone pipeline will resume oil deliveries on Tuesday after being shut down because of a leak in South Dakota, its operator TransCanada announced Monday. The company's "repair and restart plans have been reviewed by the Pipeline and Hazardous Materials Safety Administration (PHMSA) with no objections, permitting a safe and controlled return to service," TransCanada said in a statement. The PHMSA falls under the US Transportation Department. The pipeline, TransCanada added, will initially be operated at "a reduced pressure," before ramping up "to ensure a safe and gradual increase in the volume of crude oil moving through the system." A spill of about 5,000 barrels of oil earlier this month in a remote part of South Dakota forced the company to shut down the 4,324-kilometer (2,700-mile) conduit, which runs from the Canadian province of Alberta to oil terminals in Cushing, Oklahoma and Patoka, Illinois. In the spring, US President Donald Trump gave the green light for construction of the larger Keystone XL pipeline, which his predecessor Barack Obama had rejected amid environmentalists' warnings about the potential for serious leaks and ecological damage. With Keystone XL, TransCanada aims to more than double the current capacity of the line and have a direct hookup with oil refineries on the US Gulf Coast.

DAKOTA ACCESS:  Greenpeace urges court to scrap pipeline developer's lawsuit - Environmentalists are pushing a federal court to toss a lawsuit from Energy Transfer Partners LP that accuses several groups of defaming the company and inciting violence around the construction of the Dakota Access oil pipeline.In filings to the U.S. District Court for the District of North Dakota this week, Greenpeace International argued that ETP's recent legal challenge is a meritless attempt to punish advocacy work.ETP filed the challenge in August, accusing Greenpeace, BankTrack, Earth First! and others of racketeering and campaigning for "malicious interference" with pipeline construction. The company claims it incurred $300 million in damage from construction interruptions (E&E News PM, Aug. 22).Pipeline construction near the Standing Rock Indian Reservation in North Dakota attracted thousands of demonstrators, some of whom engaged in "direct action" protests to obstruct the construction route. The oil project is now complete and in service.Greenpeace says ETP's lawsuit wrongly alleges criminal activity from a few organizations participating in widespread opposition to the pipeline."However, despite gallons of ink spilled in the 228-page, 442-paragraph Complaint, on careful review it becomes obvious that all Energy Transfer is really complaining about is garden-variety environmental advocacy, not a criminal conspiracy," the group told the court Tuesday.Greenpeace argues that Washington's anti-SLAPP (strategic lawsuit against public participation) law should apply to the case, as two of the five defendants live there, and many of the allegedly defamatory or inciting statements were made from within the district. Under that statute, litigants are barred from using the courts to attempt to silence critics. "If Energy Transfer Partners succeeds, it will embolden other corporate giants to abuse the legal system with SLAPPs to silence any criticism," Tom Wetterer, Greenpeace USA general counsel, said in a statement. "Anyone who values free speech and public advocacy — including journalists, nonprofit organizations, and community protectors — should be following these cases closely, and defending our collective right to speak out against corporate power."

Bakken gas flaring rebounds, and more challenges loom - Producers in the Bakken region made substantial progress in 2014-15 in reducing the volume and percentage of gas that was flared or burned off, but those gains stalled in 2016, and flaring has actually been on the rise through much of 2017. Due to an unfortunate confluence of events (gas processing plant and pipeline issues among them), 16% of the gas produced in the Bakken in September was flared, marking the first time producers failed to meet the state’s ratcheting-down target for gas burn-offs. The October and November flaring numbers are expected to improve, but there are worries that without more processing capacity, Bakken producers will have trouble achieving the North Dakota flaring target when it drops to 12% (from the current 15%) in November 2018. Today, we discuss recent developments in Bakken gas production, gas flaring and gas-related infrastructure. One of the most enduring images of the Shale Era is a photograph of North America from a NASA satellite that showed western North Dakota shining as brightly in the nighttime sky as major metropolitan areas like New York City, Los Angeles and Houston. But it wasn’t streetlights and stadiums that lit up the Bakken region; it was the flaring of vast volumes of associated gas that was being produced at crude oil-focused wells. The burn-off of more than one-third of Bakken gas production wasn’t just wasteful, it hurt producers’ bottom line and it gave the Shale Revolution (and the Bakken in particular) a public-relations black eye — a real shiner. As we said a while back in We Did Start the Fire and (Fewer) Candles In The Wind, getting a handle on flaring proved to be especially challenging in the Bakken, given its remote location and the fast pace of oil and gas production growth there earlier in this decade. In September 2011, with oil (and associated gas) production in the Bakken on a tear and gas gatherers and processors struggling to keep up, the percentage of produced gas that was flared peaked at 36%. Something had to be done, and it was. Since June 2014, the North Dakota Industrial Commission (NDIC) has required exploration and production companies (E&Ps) to file a “gas capture plan” (GCP) with their drilling permits. Flaring now is limited to one year after first production from the well; after that, the well has to be either connected to a gas gathering pipeline or capped.

California's largest solar power plant to extract oil - Yesterday, Aera Energy and GlassPoint Solar announced plans to build California’s largest solar energy project. Located at the Belridge oilfield west of Bakersfield, the project will be used to generate steam to inject into the ground to help extract oil.The site will produce 12 million barrels of steam per year, replacing 4.8B ft3 of natural gas that would have been burnt to generate the steam. The oil-producing solar project is projected to save more than 376,000 metric tons of carbon emissions, which is equivalent to the emissions of 80,000 cars per year.Belridge Solar will consist of two power plants, a solar thermal plant and solar electric plant. The solar thermal facility will output 850 MW of thermal energy, producing 12 million barrels of steam per year via reflecting sunlight from large mirros on a centrally located tube. The solar electric plant will produce 26.5 MW of electricity.Aera and GlassPoint plan to break ground on the Belridge Solar plant in the first half of 2019 and expect to be producing steam and electricity as early as 2020.An explanation for the purpose GlassPoint’s solar thermal project was provided:  Heavy oil is produced by injecting steam into the reservoir to heat the oil so it can be pumped to the surface. This process, known as thermal Enhanced Oil Recovery (EOR), typically generates steam using natural gas. By harnessing the sun’s thermal energy to replace the combustion of natural gas, GlassPoint is enabling Aera to reduce its energy consumption and carbon footprint at Belridge. A patent was given for ‘solar augmented geothermal energy‘ that looks very similar to this oil extraction method and was actually referenced by GlassPoint in its own patent filings. The image below gives a rough description of the flow of steam in the power plant:

Natural gas production in Bakken region increases at a faster rate than oil production - In North Dakota’s Bakken region, the ratio of natural gas production relative to crude oil, known as the gas-oil ratio, has been gradually increasing since 2008 and has increased at a faster rate since 2014. More than 90% of North Dakota’s crude oil and natural gas production comes from the Bakken region, which includes the Bakken and Three Forks formations.  Total North Dakota crude oil production peaked at more than 1.2 million barrels per day (b/d) in December 2014, but production has since dropped to 1.07 million b/d (as of August 2017), based on data in EIA’s Monthly Crude Oil and Natural Gas Production Report. The record crude oil production in late 2014 was the result of increasing crude oil production from the Bakken and Three Forks formations. Despite production declines in 2016, North Dakota remained the second-largest oil-producing state, accounting for 11% of total U.S. crude oil production.   While oil production has slowed in North Dakota, natural gas production has continued to grow, reaching a record high of 1.94 billion cubic feet per day (Bcf/d) in August 2017, or the energy equivalent of about 334,000 b/d of crude oil. Despite the increasing gas-oil ratio, North Dakota still produces more than three times as much energy from crude oil as from natural gas.  In tight oil formations like the Bakken and Three Forks—which have low permeability—the gas-oil ratio tends to increase only gradually over an extended period of time before reaching a certain point at which it then increases significantly. As producers extract hydrocarbons from a rock formation, the pressure in the formation eventually falls below the point at which natural gas naturally separates from the gas-saturated crude oil—a threshold known as the bubble point. More oil relative to natural gas tends to be produced during the initial phases of production, after which natural gas production can increase once pressure in the formation reaches the bubble point.

Anti-fracking activists and anarchists are blocking rail tracks in Olympia, Wash. They don't plan on leaving. -- The encampment went up on Nov. 17, a guerrilla whirlwind of tents, tarps, wooden pallets and two-by-four studs. In just a few hours, the intersection at Jefferson Street SE and Seventh Avenue in downtown Olympia, Wash., was transformed from a drab piece of asphalt into a hulking structure, somewhere between a refugee camp and a carnival tent. As impressive as the camp was, however, most of the 100 people who collected behind its barricades the first day did not expect it to last. This was contested turf. Two sets of train tracks snaked north from the intersection to where the Port of Olympia sits on a piece of land jutting into the Budd Inlet like a fat thumb pointing from a fist. The encampment covered both rails, planting the makeshift site — and the people inside — directly in the path of any engines heading in or out of the port. That was the point. In a peaceful protest spearheaded by members of local indigenous tribes, activists planned to disrupt rail shipments related to the hydraulic fracturing business in North Dakota. A similar effort a year before ended in arrests and flash bangs and burning recycling bins. This year, the activists were sure authorities would react similarly. “We assumed another raid would be coming instantly,” one participant, who declined to give her name, told The Washington Post this week. “We thought it had to come down. We were feeling nervous. People stayed up all night.” But when the sun climbed up the next morning, the camp was still there. This week, 12 days into the blockade, the protesters remain. The structure has only grown. “This year it’s much larger,” Kyle Taylor Lucas, an indigenous rights activist involved in the protest, told The Post. “Last year we only covered one of the tracks.” Lucas said the attitude in the camp is hopeful. “What we are trying to do is resist the forced complicity in this brutal practice to devastate the earth,” she said. “The various affinity groups here bring their own specific messages and commitments and specific reasons for being here. But we came together for the common demands.” The blockade has successfully created controversy among Olympia’s political leaders, port commissioners and the rail company. But the stand is also a window into protest in the age of President Trump, a time when longtime activists find themselves fortifying the barricades with a younger breed galvanized into action by Trump’s election and other high-profile protests. “We have more anarchists,” Lucas told The Post. “And I suppose last year we did have more mainstream activists there, folks who are doing climate change work but on a more mainstream level.”

Trump administration approves Arctic Ocean oil exploration | TheHill: The Trump administration has approved an oil company’s request to explore for oil in the Arctic Ocean. The Bureau of Safety and Environmental Enforcement (BSEE) on Tuesday granted a permit for Italian oil giant Eni SpA to drill an exploratory well in the Beaufort Sea as a way to test production conditions there. The permit means the company could begin work on its exploratory well as early as next month. The decision is the first time the federal government has allowed a company to explore for oil in the American portion of Arctic waters in two years. Obama administration regulators put tight conditions on drilling activities in the Arctic and eventually decided to prohibit the sale of new drilling leases there. Eni already owns leases for the area it hopes to explore. The Trump administration, meanwhile, has looked to encourage drilling activities both on and offshore. The Interior Department approved Eni's drilling plan in July, and officials are considering a rewrite of Obama's offshore drilling plan, potentially opening up more areas of the Arctic for development in the future. “Responsible resource development in the Arctic is a critical component to achieving American energy dominance,” BSEE Director Scott Angelle said in a statement. 

Oil Exploration in Arctic Ocean Approved by Trump Administration as ANWR Drilling Bill Moves Forward -- The fight against new Arctic drilling took a major setback on Tuesday. On the same day that the Senate Budget Committee passed a bill allowing oil and natural gas drilling in Alaska's pristine Arctic National Wildlife Refuge , the Trump administration granted oil company Eni's request to explore for oil in nearby Alaska waters. The Department of Interior 's Bureau of Safety and Environmental Enforcement (BSEE) issued the permit to Eni yesterday, allowing the oil giant to drill exploratory wells in the Beaufort Sea as early as next month. “Achieving American energy dominance moved one step closer today with the approval of Arctic exploration operations on the Outer Continental Shelf for the first time in more than two years," the department boasted . In April, President Donald Trump signed an executive order that initiated the process of rolling back former President Obama's 2016 ban on any new off shore oil and gas leasing in the Arctic Ocean. Exploratory drilling will take place on Spy Island, a man-made artificial island approximately three miles offshore of Oliktok Point. Eni, which has sat on its leases in the Beaufort Sea for more than a decade, says the new development could lead to the creation of 100-150 jobs in the region and new production of 20,000 barrels of oil per day.

Green group poll: Arctic refuge drilling unpopular in key GOP districts | TheHill: A proposal to allow drilling in a section of the Arctic National Wildlife Refuge (ANWR) is unpopular in several key House districts Republicans are looking to defend next year, according to a poll released Wednesday. The survey, from the League of Conservation Voters, found 61 percent of voters in eight GOP-held House districts oppose drilling in the Arctic refuge, while only 29 percent support it. A majority of respondents in seven of the eight districts told pollsters their opinion of their House member would decline if the member votes to allow drilling in ANWR. The drilling proposal is less popular than the GOP tax plan, which 34 percent of respondents support and 48 percent oppose. The two proposals are expected to be linked together as Congress debates the tax bill next month. The League of Conservation Voters opposes drilling in ANWR. Its poll comes a week after the Senate Energy Committee approved a bill from Sen. Lisa Murkowski (R-Alaska) calling for drilling lease sales in a small portion of the refuge. Republicans say drilling can be done safely, would create jobs in Alaska and raise revenue for the federal and state governments. Opponents of the proposal contend ANWR is too environmentally sensitive to allow drilling there.

Democrats worry Arctic National Wildlife Refuge being lost amid tax debate – Politico -  Democrats’ fight to keep oil and gas rigs out of the Arctic National Wildlife Refuge is losing ground as the Republican tax plan advances — and it's almost as if no one has noticed. The prospect of drilling in the untouched Alaskan tundra is as close to reality as it's been in more than a decade, with none of the political drama that in past decades turned the refuge's fate into a top-tier rallying cry for liberals. Legislation to allow drilling in ANWR is quietly hitching a ride on the tax code overhaul that Senate Republicans hope to complete by the end of the week, overshadowed by larger debates on whether the bill is a giveaway to rich people and corporations at the expense of the poor and working class. “It’s really not gotten the attention that it should,” Sen. Tammy Duckworth (D-Ill.), a member of the Energy and Natural Resources Committee, told POLITICO about the ANWR provision. “It’s not just the budget discussion. It’s about everything else that’s going on, the flurry of all sorts of other news.” Angus King (I-Maine) said Republicans were trying to shield ANWR from opposition by adding it to the larger bill rather than bringing it to the floor separately under rules, which would require it to win support from 60 senators to overcome a filibuster. “Well, clearly the strategy is to try to get it through as part of this tax reform effort and thereby avoid a direct up-or-down vote,” King said in an interview earlier this month. The nonstop news cycle and preponderance of other concerns with the tax bill are making it difficult to focus on an issue that normally fires up Democratic voters. 

ANWR Drilling Effort Hits Snag: 'This Is What Happens When You Sneak Drilling Into a Terrible Tax Bill'  -- The backdoor Arctic refuge drilling provision snuck in the Senate Republican's tax reform plan could be held up thanks to a little-known procedural rule. The Republican-led effort to open the pristine Arctic National Wildlife Refuge (ANWR) to oil and natural gas drilling could violate the Byrd Rule, which outlines what can be included in the Senate's budgetary legislation. According to the Associated Press : "Senate Democrats objected to the provision opening a portion of the remote refuge to oil drilling, saying measures to fast-track environmental approvals violate a rule designed to limit budget legislation to provisions that are mainly fiscal in nature. Congressional aides say the Senate parliamentarian has signaled agreement with Democrats, which could force Republicans to secure 60 votes for drilling, instead of 50 needed for the tax bill."The fate of the bill is now unclear but environmental groups cheered the news.  Tiernan Sittenfeld of the League of Conservation Voters told the AP that the procedural hiccup "is what happens when you cut corners and try to sneak drilling into an already terrible tax bill."  The drilling provision was introduced by Sen. Lisa Murkowski (R-Alaska), who chairs the Senate Energy and Natural Resources Committee and has worked for most of her career to allow drilling in the refuge. Conservatives have sought for decades to open up parts of the refuge to create jobs and boost the energy sector. They have targeted the so-called 1002 area on the Prudhoe Bay in Northern Alaska, which has an estimated 12 billion barrels of recoverable crude. Murkowski called the 1002 a "non wilderness area" since the government set it aside for petroleum exploration decades ago. However , the targeted area hosts migratory bird species and endangered wildlife and is considered to be sacred to the indigenous Gwich'in people, who sustain themselves from the caribou that migrate there.

US shale producers renew challenge to OPEC: Kemp (Reuters) - U.S. shale producers have started adding more drilling rigs in response to rising oil prices and improving confidence about the outlook for 2018. Experience shows changes in the number of rigs drilling for oil in the United States tends to follow changes in WTI prices with a lag of about 16 to 20 weeks. The active rig count peaked in mid-August and then declined through September and October, in response to the earlier peak and fall in prices between February and mid-June. But WTI prices hit a recent low around June 21 and have been on an upward trend for 22 weeks so it was expected the rig count would start to rise. Right on time, the rig count has climbed from a low of 729 on Nov. 3 to 747 on Nov. 22, according to oilfield services company Baker Hughes (http://tmsnrt.rs/2AAaSQ5 ). Shale firms are adding rigs in response to a big increase in spot prices, which is improving their short-term cash flow, and a brightening outlook, which should make production more profitable over the next year. Front-month WTI futures prices have climbed by more than $16 per barrel or almost 40 percent since their trough in late June. Front-month prices are now above their previous peak in February and at the highest level in almost 31 months. The WTI calendar strip for 2018, the benchmark against which shale producers execute hedges for next year, has climbed by more than $11 per barrel to the highest level since the start of 2017. The strip is now trading above $56 per barrel, high enough for most shale firms to ensure basic profitability in 2018. The renewed rise in the U.S. rig count underscores the delicate balance Saudi Arabia, Russia and other OPEC and non-OPEC oil exporters must strike this week at their meeting in Vienna. 

Million-Barrel Oil Hedging Surge Signals Shale Boom Here to Stay - Oil explorers took advantage of a market rally to lock in prices for almost 1 million barrels a day’s worth of future output, signaling the shale boom’s staying power as OPEC ponders the extension of its supply curbs. New hedging contracts in the third quarter covered 897,000 barrels a day of annualized production, a 147 percent increase over the second quarter, according to an analysis of 33 companies released Tuesday by industry researcher Wood MacKenzie Ltd. It was the biggest jump in crude hedging volumes since Wood Mackenzie began tracking such activity two years ago. OPEC and its allies are scheduled to meet in Vienna this week to discuss whether to extend supply cuts intended in large part to counter the historic surge in U.S. production. The hedging contracts, which allow drillers to lock in future payments of at least $50 a barrel, could make it easier for the cartel’s American rivals to keep pumping more, no matter which way prices go. “Producers that are able to lock in prices above previous expectations may feel more comfortable with increasing activity,"  . “Others may leave budgets unchanged and promote higher cash-flow guidance to an investment community anxious about profits." Most of the hedges guarantee payments of $50 to $60 a barrel for 2018, the analysis found. New York-based Hess Corp. and Cenovus Energy Inc., one of Canada’s biggest producers, were the most active, accounting for 35 percent of volume added in the quarter. Fourteen companies each added at least 25,000 barrels a day, said Wood Mackenzie. Natural-gas hedging slowed, with drillers adding almost a third fewer contracts than in the prior quarter. That’s likely because gas prices have been less volatile this year, McConn said. Most contracts were added at prices between $3 and $3.40 per million cubic feet, with Fort Worth, Texas-based Range Resources Corp. accounting for 27 percent of volumes added. 

Oil Majors Are Leading The Recovery Race - In a sign that the oil majors have survived the three-and-a-half-year oil bust and are back on solid ground, Royal Dutch Shell announced that it will restore its full cash dividend.Shell hasn’t paid the full cash dividend in over two years, instead offering investors shares in lieu of payment. But with debt falling significantly over the past year, cash flow improving, and an improved oil market outlook, the company chose to dish out some of the rewards to its shareholders. Shell also said that it would buy back $25 billion worth of shares by 2020, roughly the equivalent to the amount of shares that it issued instead of paying the cash dividend.Shell follows BP and Statoil, which both made similar announcements in recent weeks. BP said it will begin buying back shares and Statoil said it will end its scrip dividend and return to cash payments. But Shell’s decision to pay the full cash dividend is notable because it had become one of the most indebted oil companies in the world after its $50 billion purchase of BG Group.Taken together, the moves to step up payments to shareholders is a sign that the oil majors are feeling much more confident than they were in recent quarters. Shell increased its guidance for free cash flow from a prior range of $20 to $25 billion through 2020, up to a new range of $25 to $30 billion—a level that assumes oil prices trade at an average of $60 per barrel. The “strategy update shows an encouraging increase in future cash flows,” said Simon Gergel, chief investment officer of equities at Allianz Global Investors, according to Bloomberg. The restoration of the cash dividend “reflects their improving cash-generation profile,” he said. The sharp improvement for Shell is the result of several years of cost-cutting, asset disposals and efficiencies that have helped drive down the cost of production. Also, some high-profile projects have reached completion, easing the spending burden while also adding new sources of revenue. The acquisition of BG Group transformed Shell into the largest LNG exporter in the world, but it also raised eyebrows because of the stratospheric debt that it required. Now, with the Anglo-Dutch company paying down debt, improving its cash position, and restoring its cash dividend, the acquisition of BG Group looks much better.

MIT Study Suggests US Vastly Overstates Oil Output Forecasts - Turns out, America’s decade-long shale boom might just end up being a little too good to be true. Researchers at MIT have uncovered one potentially game-changing detail: a flaw in the Energy Department’s official forecast, which may vastly overstate oil and gas production in the years to come. The culprit, they say, lies in the Energy Information Administration’s premise that better technology has been behind nearly all the recent output gains, and will continue to boost production for the foreseeable future. That’s not quite right. Instead, the research suggests increases have been largely due to something more mundane: low energy prices, which led drillers to focus on sweet spots where oil and gas are easiest to extract. “The EIA is assuming that productivity of individual wells will continue to rise as a result of improvements in technology,” said Justin B. Montgomery, a researcher at the Massachusetts Institute of Technology and one of the study’s authors. “This compounds year after year, like interest, so the further out in the future the wells are drilled, the more that they are being overestimated.” Extrapolating from field studies Montgomery and his colleague Francis O’Sullivan conducted in North Dakota’s Bakken shale deposit, the research suggests that total U.S. oil and natural-gas production from new wells could undershoot the EIA estimate by more than 10 percent in 2020. Things would get progressively worse each year after that as wells in various sweet spots are exhausted and technology fails to close the gap.

Oil Major: 70% Of Crude Can Be Left In The Ground - Canada’s oil sands are too dirty to be produced, and should probably stay in the ground.That has long been the sentiment of environmental groups, but it is also gaining acceptance even among some of the largest oil companies in the world. “A lot of fossil fuels will have to stay in the ground, coal obviously … but you will also see oil and gas being left in the ground, that is natural,” Statoil’s CEO Eldar Saetre told Reuters in an interview. “At Statoil we are not pursuing certain types of resources, we are not exploring for heavy oil or investing in oilsands. It is really about accessing the most carbon-efficient barrels.” Meanwhile, Statoil is under pressure at home on another front: its Arctic wells in the Barents Sea have come up dry, capping off a highly disappointing drilling season. If heavy oil and oil sands are to be left unproduced, then a lot of oil will need to stay in the ground. According to the USGS, about 70 percent of the world’s discovered oil reserves are in the form of heavy oil and bitumen. Much of that comes from Venezuela – one of the last places in the world that an oil company wants to do business in these days – and Canada.  Last year, Statoil abandoned Canada’s oil sands, selling off its assets to Athabasca Oil Corp. But Statoil is hardly alone in the exodus. ConocoPhillips unloaded a whopping $13.3 billion of oil sands assets to Cenovus Energy earlier this year. Shell sold off $4.1 billion in oil sands assets to Canadian Natural Resources. Meanwhile, ExxonMobil wrote off 3.5 billion barrels of oil sands from its book in February, admitting that they were unviable in today’s market. French oil giant Total SA decided earlier this year to halt funding for the Fort Hills oil sands project, led by its partner Suncor Energy. To be sure, the overarching motivation for many of these asset sales is one of economics.  ConocoPhillips’ CEO said that it would no longer invest in any oil project that needs a breakeven price of $50 or higher, according to the FT. Conoco’s CEO Ryan Lance said that much of the company’s new investment will be directed into U.S. shale. “You don’t even get through the door unless you are below $50 cost of supply, and you don’t really get to the table in the capital allocation fight unless you are $40 a barrel or below,” he said.

Exxon, oil giants team up to reduce methane emissions | TheHill: ExxonMobil Corp. and seven other energy firms have teamed up to tackle natural gas sector greenhouse gas emissions, the companies announced on Wednesday. Exxon was the only American-owned company to sign an agreement to crack down on emissions of methane, a powerful greenhouse gas that producers tend to emit along the natural gas production line. The companies agreed to take steps to reduce methane emissions, work with institutions and governments to write new methane regulations, improve emissions reporting data and increase transparency. The oil industry has increasingly touted natural gas as an effective way to cut down on electricity sector greenhouse gas emissions, because it burns cleaner than other fossil fuel alternatives like coal. But methane emissions pack about 25 times the warming potential of carbon dioxide, a fact that has caused regulators to turn their eye to pollution controls on natural gas producers. In the United States, the Trump administration is working to roll back methane pollution rules from the Interior Department and the Environmental Protection Agency.The oil industry has opposed the regulations, arguing they are costly and duplicative of state pollution standards, and noting they have cut emissions on their own. Environmentalists say the warming potential of methane make the regulations necessary.

Ban fracking, London mayor tells councils - The Mayor of London wants to effectively ban fracking in the capital, urging local councils to refuse applications for exploration or extraction. Sadiq Khan called the method of extracting shale gas "harmful" and a risk to public health, and will this week set out guidance on the matter in a new draft plan for London. "There is absolutely no place for fracking in London and I remain firm in my belief that any such application must be refused," he said. “The harmful, negative impact of the use of fossil fuels on the environment and on the air we breathe is well known. We must instead focus our resources on developing technologies for the efficient extraction of clean, renewable forms of energy, rather than coming up with more ever innovative ways to keeping burning fossil fuels. The move was welcomed by campaigners at Greenpeace and Friends of the Earth. It's understood that application for fracking has been made to any councils, but London Local Energy has signalled that it wants to explore a site in Brentford. Fracking was effectively banned in Scotland last month, following in the footsteps of Wales and Ireland. France, the Netherlands, Germany and Bulgaria are also among the countries to have banned the controversial practice. 

Denmark's New Law Could Block Nord Stream 2  -- A new law passed by the Danish government could authorize regulators to block the passage of the Russian Nord Stream 2 gas pipeline on security or foreign policy grounds, according to a new report by Reuters.  Under previous laws, the two reasons above would not have constituted valid grounds to reject the construction of a pipeline. Nord Stream 2 will bypass land routes through Ukraine, Poland, and Belarus to supply gas to Germany and surrounding nations. The line’s route cuts through Danish waters in its current form, but Gazprom researchers are investigating a new route that cuts through international waters instead, preventing a showdown in the Danish parliament regarding the project.The Danish Energy Agency is assessing a submitted application for the Nord Stream 2 line, but the new law applies to all applications being processed, including this controversial one. Supporters of the project argue that Germany and neighboring countries will get cheap, reliable gas from Russia that will complement - not replace - gas from existing supply routes.  Opponents of the project argue that Russia’s Gazprom will increase its share of the European gas market, which would boost its already dominant position in Central and Eastern Europe, and therefore undermine the efforts of some European countries to diversify their gas supplies away from Russia. Opponents also see Nord Stream 2 as Moscow gaining political leverage over the EU.  Nord Stream 2 - currently planned for completion by the end of 2019 - faces stiff opposition from Poland, the Baltic countries, and several other EU countries. Germany, on the other hand, which will be the main beneficiary of the new gas supplies, says that the project is just business, and should not be made political.

Venezuela's military is reportedly taking over the country's state oil giant - The general appointed to run Venezuela's energy sector will bring more military officials into the senior ranks of state oil company PDVSA during a major shakeup intended to root out corruption, two company sources told Reuters on Monday. Industry analysts and sources said the surprise appointment of Manuel Quevedo, a former housing minister with no known energy experience, was a bad omen for the country's already deteriorated oil industry. Quevedo takes over from two industry veterans to become one of the most powerful players in the country, which is home to the worlds largest crude reserves. He will have to tackle corruption scandals and an attempted debt restructuring, within the context of a deep recession and debilitating U.S. sanctions. The time for a new oil revolution has come, leftist Maduro said in his televised Sunday address, urging Quevedo to purge PDVSA of corruption. Last week, six executives from U.S.-based Citgo, a Venezuelan-owned refiner and marketer of oil and petrochemical products, were arrested in Caracas on graft allegations. About 50 officials at state oil company PDVSA have been arrested since August in what the state prosecutor says is a crusade against corruption. Sources within PDVSA and the oil industry said Maduros administration was using corruption allegations to sideline rivals and deepen its control of the industry, which accounts for over 90 percent of export revenue. Quevedo, whom two sources close to the military identified as a Maduro ally, will take over his new roles on Monday before he is officially sworn in on Tuesday. He vowed on Sunday to bring PDVSA closer to the ideals of late leftist leader Hugo Chavez. It was unclear how Quevedo planned to increase oil production, or what position he would have in Venezuelas complex attempt to restructure its debt, although his appointment is likely to worry bondholders. 

Report: Shell Complicit in Human Rights Abuses -- Amnesty International is calling for an international investigation into Royal Dutch Shell 's practices, alleging in a new report released Tuesday that the oil giant was involved in human rights violations committed by the Nigerian government in the early 1990s. The report, created following a review of thousands of internal company documents and testimony statements, charges Shell with aiding Nigerian security forces in silencing protests in the country's oil-producing Ogoniland region. "The evidence we have reviewed shows that Shell repeatedly encouraged the Nigerian military to deal with community protests, even when it knew the horrors this would lead to—unlawful killings, rape, torture, the burning of villages," Amnesty Director of Global Issues Audrey Gaughran told Bloomberg.   Shell is the oldest oil company established in Nigeria, Africa's largest oil producer and the sixth largest oil-producing country in the world, and currently operates a joint venture with the Nigerian government that produces more than one-third of the nation's crude oil.  As reported by The Guardian : "Mark Dummett, a researcher for Amnesty, said: 'The fact Shell was running a shady undercover unit and then passing on information to the Nigerian security agency is incredibly disturbing. 'This was a time when Nigeria was cracking down on peaceful protesters, and there must have been a risk that information gathered by Shell's secret spy unit contributed to grave human rights violations.'  He added: 'The revelations show how close and insidious the relationship was between the oil company and the Nigerian state, and Shell has serious questions to answer.'"

US exporting dirty fuel to already pollution-choked India   (AP) — U.S. oil refineries that are unable to sell a dirty fuel waste product at home are exporting vast quantities of it to India instead. Petroleum coke, the leftover from refining Canadian tar sands and other heavy crude, is cheaper and burns hotter than coal. But it also contains more planet-warming carbon and far more heart- and lung-damaging sulfur — a key reason few American companies use it. Refineries are sending it around the world instead, especially to energy-hungry India, which last year got almost a fourth of the fuel grade "petcoke" the U.S. ships, an Associated Press investigation found. In 2016, the U.S. sent more than 8 million metric tons of petcoke to India — about 20 times more than in 2010, and enough to fill the Empire State Building eight times. The petcoke burned in countless factories and plants is contributing to dangerously filthy air in India. "My life is finished....My lungs are finished," said Satye Bir, 63, wheezing and reaching for an inhaler. "This is how I survive. Otherwise, I can't breathe." Tests on imported petcoke used near the capital found 17 times more sulfur than the limit for coal, according to India's Environmental Pollution Control Authority. India's own petcoke, produced domestically, adds to the pollution. Industry officials say petcoke has been an important fuel for decades, and its use recycles a waste product. Health and environmental advocates say the U.S. is exporting an environmental problem. The U.S. is the biggest producer and exporter of petcoke in the world. 

Strong China demand, oil drive spot Asia LNG prices to highest since Jan 2015 - Asia LNG spot prices surged to a near three-year high Monday as surging Chinese demand and robust oil prices coincided with persistent supply anxieties. The Platts JKM for January was assessed at $9.85/MMBtu Monday, the highest price since January 9, 2015, and up about 8% since the start of the month. China imported 28 million mt of LNG in January-October 2017, up 47% from 19 million mt in the same period last year, closing the gap to the world's second-largest importing nation, South Korea. The country's policy directives encouraging coal-to-gas switching to combat air pollution mean that LNG imports were increasingly needed to feed the country's enormous energy appetite. The replacement of coal-fired heating with gas-fired boilers at millions of Chinese households this year also boosted winter LNG purchases. This additional demand was satisfied through spot procurement largely through majors CNOOC and PetroChina. Both companies were active in spot dealmaking, either via bilateral transactions or participating in sell-tenders, sources said. In particular, CNOOC awarded a rare tender for up to seven December deliveries in late-September, sources said. Other importers like Guanghui Energy opted to do short-term strip deals, while others like Sinopec and Jovo relied on long-term contracted volumes. "China's activity on the spot market this year really took out a lot of excess supply, especially for leaner cargoes," an international trader said. 

As gas heating demand soars, China's Hebei warns of shortages (Reuters) - China’s Hebei province has told cities across the region to force shops and factories to cut their natural gas use due to shortages, the strongest sign yet that Beijing’s shift to clean fuel is hurting businesses across the industrial heartland. Demand for gas in the world’s second-largest economy has surged after the government ordered millions of households across northern China to convert to gas heating from coal this year and companies to replace their coal-fired industrial boilers with gas or electricity as part of its war on pollution. The government has been battling toxic smog, produced from the emissions from coal-fired power plants, that blankets the north during the winter when people turn up their home heating. Hebei’s Development & Reform Commission (DRC) issued an orange alert, the second-highest level in its four-tier scale, and urged city authorities to force commercial and industrial users to cut gas consumption, according to the notice reviewed by Reuters. “Due to gasification projects and overall efforts to remove coal, gas consumption rose rapidly in Hebei. Upstream producers also cut supplies leading to a bigger tightness,” the notice said. A Hebei official confirmed the document’s authenticity, which was issued on Nov. 27 and came into force on Nov. 28. It is not known how long the measures will be in force. The Hebei DRC declined to comment on the situation. An orange alert means Hebei, the country’s largest steelmaking province, faces a gas supply shortfall of 10 percent to 20 percent of its current needs. Hebei’s warning comes just two weeks since the newly installed radiators were switched on for the winter on Nov. 15. The government has said residential users will have supply priority over industrial users. 

Gas exporters group hits out at economic sanctions against members - The Gas Exporting Countries' Forum (GECF) has slammed the imposition of sanctions against its members in a final communique from its fourth heads of state summit held in Bolivia last week. The GECF -- made up of the world's biggest gas exporters including the big hitters Russia, Qatar and Iran -- holds around 60% of the world's proven gas reserves and although it is more of an advisory forum than one that takes action, the comments on sanctions stand out. In the declaration, the GECF said it expressed its "deep concern" about the extra-territorial application of laws and regulations, and its objection to unilateral economic sanctions in the gas sector, particularly against its member countries. The US in August passed a new sanctions law that gave President Donald Trump the power to impose measures against companies investing in Russian energy export infrastructure. Heads of state and members of government from the member countries convened the week-long summit in Santa Cruz de la Sierra. There has been speculation over the past decade that the GECF could morph into a "Gas OPEC" with the power to manage markets through supply intervention, but the group has insisted its role is to promote gas and encourage cooperation. 

OPEC’s Clash With U.S. Oil Is Nearing Its Day of Reckoning - The clash between OPEC and America’s oil industry is reaching a day of reckoning.  The U.S. shale revolution is on course to be the greatest oil and gas boom in history, turning a nation once at the mercy of foreign imports into a global player. That seismic shift shattered the dominance of Saudi Arabia and the OPEC cartel, forcing them into an alliance with long-time rival Russia to keep a grip on world markets. So far, it’s worked -- global oil stockpiles are draining and prices are near two-year highs. But as the Organization of Petroleum Exporting Countries and Russia prepare to meet in Vienna this week to extend production cuts, ministers have little idea how U.S. shale production will respond in 2018. “The production cuts are effective -- it was absolutely the right decision, and the fact of striking a deal with Russia was crucial,” said Paolo Scaroni, vice-chairman of NM Rothschild & Sons and former chief executive officer of Italian oil giant Eni SpA. Nonetheless, “OPEC has not the same power. The U.S. becoming the biggest producer of oil in the world is a dramatic change.”  For OPEC members, the stakes couldn’t be higher. Saudi Arabia’s Crown Prince Mohammed Bin Salman is embarking on a radical economic transformation of the kingdom, including a partial sale of its state oil company that could be the largest public offering in history. Venezuela, reeling from years of recession and a crushing debt burden, is on the brink of political implosion. The producers’ efforts to clear the oil surplus are starting to pay off. They’ve drained excess inventories in developed nations this year by 183 million barrels, or more than half of the glut, which now stands at about 140 million barrels, according to OPEC data. That has revived London-traded crude futures, which sank below $45 a barrel this summer, to a two-year high of $64.65 on Nov. 7. That success goes some way to countering accusations that OPEC had lapsed from the dominant market force of the 1970s and 1980s into irrelevance. Although its 14 members still pump 40 percent of the world’s oil, their share has dwindled from the days when OPEC held the global economy in thrall.

Shale Is Confounding Everybody, But Never Mind -- If anyone doubted that the U.S. shale industry has completely upended the oil market, just look at how it's complicating OPEC's next meeting.As the group prepares to decide on Nov. 30 whether to extend output cuts to the end of 2018, it has no idea how much competition to expect from shale. Nor does anybody else, for that matter. Forecasting output growth used to be a relatively simple undertaking. Developing oil fields had a lead time of several years and the flow of new oil coming from them was reasonably visible over a 12-month horizon.Now, lead times are measured in weeks rather than years for new shale projects, and the large number of companies operating in the sector have made forecasting oil output growth almost impossible. The uncertainty makes it very difficult for OPEC and its friends to assess how they should respond. This raises a risk that they hesitate on extending the production reductions.Analysts briefing the group last week said forecasts of growth in shale oil output next year ranged from 500,000 barrels a day to 1.7 million. That margin of uncertainty is as big as the entire output cut the group agreed to a year ago. The group doesn't just have a problem with looking ahead. Understanding of the current year is little better. The U.S. Energy Information Administration is underestimating this year’s growth in shale oil output by about 300,000 barrels a day, according to veteran crude trader Andy Hall, who was part of the briefing. But Continental Resources Chief Executive Officer Harold Hamm said during an EIA webinar earlier this month that the department's 2017 exit rate of production is 220,000 barrels a day too high, implying it is also overstating annual average output.  Adding to the complexity, OPEC and the International Energy Agency have very different global projections for next year. If output cuts are extended to the end of 2018, the producer group sees oil inventories reducing quickly in the second half of the year. With an estimated 154 million barrels of excess inventory in Organization for Economic Cooperation and Development countries alone, those steep reductions are still needed to bring stockpiles down to the five-year average level that OPEC seeks.

China's splurge on U.S., Russian crude shows OPEC's dilemma (Reuters) - The shifting dynamics of China’s crude oil imports show the scale of the challenges facing the Organization of the Petroleum Exporting Countries (OPEC) and its allies ahead of a decision on whether to continue with production cuts. The detailed Chinese customs data for October illustrates trends that should give pause for thought to the leaders of OPEC and its allies, particularly major exporter Russia, ahead of the meeting in Vienna on Nov. 30. Market share is the big issue for shippers to China, the world’s largest crude importer, and there are two strands to the problem. The first is that the import data shows how China has been able to develop new relationships with oil exporters fairly rapidly, reducing reliance on some traditional suppliers from OPEC. The second is that it appears that the burden of reducing exports, at least as far as China is concerned, isn’t being shared remotely equally by members of OPEC and their partners in output cuts. This imbalance raises the chance that an extension to the overall output cuts first agreed a year ago will prove ineffective as some parties to the deal are tempted to export more in a bid to retain, or expand, market share. China’s imports from the United States neatly encapsulate the dilemma that OPEC and its allies have in dealing with the challenge of rising U.S. exports on the back of the boom in shale oil. China imported about 206,900 barrels per day (bpd) from the United States in October, the second-highest monthly amount on record since this trade flow started late last year.

OPEC sees market rebalancing after June as it mulls oil cut extension (Reuters) - Oil markets will rebalance after June 2018 at the earliest, an OPEC working panel concluded last week, OPEC sources said on Monday, signaling the need to extend existing production cuts well into next year. The conclusion from OPEC’s national representatives and the group’s secretariat came after a meeting on Thursday and Friday, according to four sources at the Organization of the Petroleum Exporting Countries. It also came as non-OPEC Russia said it would support extending cuts in tandem with OPEC but gave conflicting signals on the duration of the extension after oil price rallied about $60 per barrel, raising fears that the market could over-tighten and spur another spike in U.S. shale output. OPEC’s leader Saudi Arabia has signaled it wanted oil to trade at about $60 per barrel as the kingdom is preparing to list its national oil champion Aramco and is still fighting a large fiscal deficit. Russia also needs high oil prices ahead of the presidential election in March 2018. But officials in Moscow have said they were also worried about an overly strong rouble which would undermine the competitiveness of its economy. “The best scenario would suggest third quarter for the rebalancing of the market,” one of the OPEC sources said. OPEC, Russia and nine other producers are cutting oil output by about 1.8 million barrels per day until March 2018, and will discuss extending the deal at a Nov. 30 meeting in Vienna. OPEC delegates have said a nine-month extension was the most likely outcome although some delegates and Russia have said a six-month extension was an option. Oil prices have risen to almost $65 a barrel, the highest since 2015, supported by lower inventories. However, excess supply persists, making some in OPEC wary of renewed price weakness. The supply pact is aimed at reducing oil stocks in industrialized countries to their five-year average, and the latest figures suggest OPEC is more than halfway there. “OPEC needs an extension until the end of 2018 to send the market a message that we are committed,” a second OPEC source said. “OPEC will meet in June again and if the market is tight by then, they can always adjust supply.” Russian officials told OPEC they thought the market needed to be monitored very closely so the agreement could be reviewed if signs of a deficit began to emerge, according to sources familiar with the discussions. 

OPEC, Russia Said To Announce Oil Pact Extension On Nov 30 - Saudi Arabia and Russia have agreed that OPEC and non-OPEC allies should announce an extension of the cuts at the highly-anticipated meeting in Vienna on November 30, Bloomberg reported on Friday, quoting people involved in the talks. Recent OPEC/non-OPEC oil pact chatter had it that Saudi Arabia was pushing for an announcement of the cuts extension next week in Vienna, while Russia was more hesitant about telling the market on November 30 how the participants in the deal would act. Russia appeared to be stalling and playing for an announcement to be issued closer to the current expiration deadline of the deal, March 2018. According to Bloomberg’s sources, now Russia and Saudi Arabia have agreed on the need to announce some sort of a deal next week, but Russia has insisted on additional phrasing in the extension deal that would link the size of the cuts to the state of the oil market.  While OPEC and Russia have agreed on a general framework, discussions are ongoing as to how OPEC could meet Russia’s demands, including how to include a link between the size of the cuts and the state of the rebalancing of the oil market. There are also discussions about including an option to review the pact again in early 2018, including calling a new meeting, according to Bloomberg’s sources. As of last week, not all Russian oil companies were on board with extending the cuts, and they were said to have discussed a six-month extension with Energy Minister Alexander Novak.Novak, for his part, said on Friday in a television interview posted on the energy ministry’s website that some 50 percent of the global oil oversupply had been erased and Brent prices had risen to an “acceptable enough” level of more than $60 a barrel. Nevertheless, the oil market is not yet balanced and the pact needs to be extended,Novak said, adding that Russia supports an extension, and various options are being discussed.

U.S. oil falls on Keystone restart, doubts about Russia’s resolve (Reuters) - U.S. oil prices fell more than 1 percent on Monday, easing from two-year highs on prospects of higher supply from a planned restart of the Keystone crude pipeline and uncertainty about Russia’s resolve to join in extending output cuts ahead of this week’s OPEC meeting. TransCanada Corp said it will restart its Keystone crude oil pipeline at reduced pressure on Tuesday after getting approval from U.S. regulators. Calgary-based TransCanada shut down the 590,000 barrel-per-day pipeline, one of Canada’s main crude export routes to the United States, on Nov. 16 after 5,000 barrels of oil leaked in South Dakota. Keystone carries crude from Alberta’s oil sands to U.S. refineries. Brent futures LCOc1 ended down just 2 cents at $63.84 a barrel while U.S. crude CLc1 settled 84 cents, or 1.4 percent, lower at $58.11 a barrel. On Friday, U.S. crude touched $59.05 a barrel, its strongest since mid-2015, following the spill. In post-settlement trading the front month spread for U.S. crude spread hit a session low of negative 10 cents a barrel, after Transcanada’s restart announcement. Oil prices have surged in recent months due to output cuts by the Organization of the Petroleum Exporting Countries, Russia and other producers. However, higher prices have encouraged greater output among U.S. producers. OPEC and its allies cut production by 1.8 million bpd in January and have agreed to hold down output until March. OPEC meets on Thursday to discuss policy and most analysts expect a deal to extend the cuts. On Friday, Russia said it was ready to support extending an output cut deal. Still, Russia has not given a timeline, and on Monday there were signs Russia may find it hard to comply. Oil output from Russia’s Sakhalin-1 project is set to rise by about a quarter to 250,000-260,000 barrels per day (bpd) from January, sources with knowledge of the plan said. 

 U.S. oil prices mark first decline in 4 sessions - U.S. oil prices settled lower for the first time in four sessions Monday, as some traders expressed doubt over an extension to a production-cut deal at the OPEC meeting later this week. Still, prices for the U.S. benchmark crude finished off the session's worst levels, finding some support after a report that oil workers in Brazil are set to strike later this week. Oil labor union workers approved a strike starting Wednesday, Phil Flynn, senior market analyst at Price Futures Group said, citing a report from Bloomberg. The strike "may not even happen," but the news still helped oil trade off the day's "correction low," said Flynn. January West Texas Intermediate crude fell by 84 cents, or 1.4%, to settle at $58.11 a barrel on the New York Mercantile Exchange after tapping a low of $57.55. On Friday, the U.S. benchmark shot up 1.6% to $58.95, settling at a level not seen since June 30, 2015. January Brent oil , meanwhile, settled little changed, down 2 cents at $63.84 a barrel on the ICE Futures Europe exchange. WTI crude prices have been driven higher in recent sessions as U.S. inventory data showed crude stockpiles falling and on disruption to the Keystone pipeline in the U.S. after an oil spill in South Dakota. But the recent rise in prices, with WTI touching two-year highs, could provide incentive for U.S. producers, in particular, to further boost output. For now, investors are looking ahead to Thursday's meeting in Vienna of members of the Organization of the Petroleum Exporting Countries and nonmember oil producers, including Russia. Some expect the gathering will produce an extension to the output-cut deal announced in January. But "OPEC and Russia may not reach a conclusion on whether to extend supply cuts beyond March's deadline until February," said Adrienne Murphy, chief market analyst at AvaTrade. "The cartel aims to collect as much data possible, as well as appease reluctant Russia, before it commits to more cuts." 

OPEC heading for oil cut extension with a caveat (Reuters) - OPEC and Russia are heading towards prolonging their oil supply cuts for the whole of 2018 but with an option to review the deal in June, OPEC sources said on Tuesday after Moscow expressed concerns the market could overheat. The recommendation was made by a joint committee of OPEC and non-OPEC delegates including Russia but has yet to be approved by the ministers from the committee on Wednesday and then by a full OPEC meeting on Thursday, two OPEC sources said. Oil prices deepened their two-day decline on the news, which the market could perceive as an extension of production cuts by just three months until June 2018 rather than a full year. The Organization of the Petroleum Exporting Countries, Russia and nine other producers are cutting crude output by about 1.8 million barrels per day until March 2018, and on Thursday their oil ministers will discuss extending the deal. “It will not be an easy meeting and we always look at various scenarios,” United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said on Tuesday in Dubai. Upon arrival in Vienna, he said cutting output through the whole of 2018 was still the main scenario but not the only one. The market had largely expected OPEC to prolong the cuts until the end of 2018 to prop up prices and clear an excess of global stocks, but doubts have emerged in the last few days. OPEC’s leader, Saudi Arabia, has signalled that it wants oil to trade at about $60 a barrel as the kingdom prepares to list shares in national oil champion Aramco and fights a large fiscal deficit. The Russian government also wants high oil prices ahead of a presidential election in March 2018. But officials in Moscow have voiced worries about pricier oil boosting the rouble, which could undermine the competitiveness of Russia’s economy.

Oil prices slip on OPEC deal extension jitters (Reuters) - Oil prices eased on Tuesday, weighed down by uncertainty over the outcome of an OPEC meeting this week at which an extension to its price-supporting oil output cuts will be discussed. Prices also briefly came under pressure after a fire broke out at Exxon Mobil Corp’s (XOM.N) 362,300 barrel-per-day (bpd) Beaumont, Texas, refinery. Firefighters have since put out the blaze but the small crude unit is shut, sources said. Brent crude oil LCOc1 ended the session down 23 cents, or 0.4 percent, at $63.61 a barrel. U.S. crude CLc1 settled 12 cents, or 0.2 percent lower at $57.99, after falling 1.4 percent in the previous session. Prices extended losses after data from industry group the American Petroleum Institute showed crude inventories rose by 1.8 million barrels in the week to Nov. 24 to 457.3 million, compared with analysts’ expectations for a decrease of 2.3 million barrels. The Organization of the Petroleum Exporting Countries is heading for tougher-than-expected policy talks on Thursday. Its leader Saudi Arabia is pushing to extend output cuts by nine months while non-member Russia is hesitating due to worries that the market could overheat. Oil output from Russia’s Far Eastern Sakhalin-1 project is set to rise by about a quarter from January, sources with knowledge of the plan told Reuters, signaling Moscow may find it hard to comply with output cuts in tandem with OPEC for the whole of next year. A joint OPEC and non-OPEC technical committee recommended extending the deal until the end of next year, with an option to review it in June, two sources with knowledge of the matter said.

All Eyes On OPEC As Meeting Nears - Oil prices dipped slightly in early trading on Tuesday over a slight uptick in uncertainty regarding the OPEC meeting. Meanwhile, TransCanada is set to return its Keystone pipeline to operation, which dragged down WTI. “This bearish development adds to the underlying unease surrounding the outcome of Thursday’s OPEC meeting,” PVM Oil Associates analysts said in a report.An OPEC working panel concluded that the oil market would balance after June 2018, according to Reuters. “The best scenario would suggest third quarter for the rebalancing of the market,” an OPEC source told Reuters. The conclusion bolsters the case for extending the current agreement, which expires in March. While Russia is concerned about sparking a revival of U.S. shale if the production cuts are extended, some of the top oil traders caution OPEC and Russia not to back down now. The top oil traders insist that the current plan works. “What they need to do is quite simple — they need to stick to what they’re doing,” Marco Dunand, CEO of Mercuria, told the FT. “If they keep their discipline we should see inventories fall to a level that is adequate to support prices above $60 a barrel. If prices rise too high they can always revisit it, but the start of next year doesn’t look overly bullish.” Vitol, another major oil trader, warned that lower prices would be in store if the cuts are not extended. “Balances already look weaker than 2017 even with flat Opec production,” Vitol’s global head of research, Giovanni Serio, said to the FT. “The question going forward is do they want oil to stay above $60?” In a research note, Goldman Sachs said that Russia’s hesitation over extending the OPEC cuts has injected a degree of uncertainty into the talks. And because prices are already relatively high, hedge funds have taken out bullish bets, and timespreads indicate bullishness in the market, the downside risk is quite high, Goldman argued. “With the rhetoric not matching the logic for the first time in years, we believe that the outcome of this meeting is much more uncertain than usual,” Goldman analyst Damien Courvalin wrote. “We believe that oil prices have overshot fundamentals and that price risks are skewed to the downside into Thursday’s meeting.” Ahead of the OPEC meeting, hedge funds and other money managers slightly cut back on their bullish bets on oil futures, growing wary of their overextending position. Recognizing that much of the impact of the OPEC cuts are already priced into the market, speculators pulled back a bit over fears of an unexpected surprise.

 Hedge funds lighten bullish positions in oil: Kemp (Reuters) - Hedge funds started to reduce their record bullish position in crude and refined products in the week to Nov. 21 amid growing concerns about the possibility of a sharp price reversal.The net long position held by hedge funds and other money managers in the five main petroleum futures and options contracts covering crude and fuels were cut to 1,092 million barrels from a record 1,120 million on Nov. 14.For Brent, WTI, U.S. gasoline and U.S. heating oil, the net long declined by 28 million barrels after rising by 237 million barrels over the previous four weeks, data from regulators and exchanges shows.Most of the adjustments came from the long side of the market, where portfolio managers reduced the number of long positions in Brent, WTI and gasoline in a sign of profit-taking after a strong price rally.In total, fund managers cut petroleum long positions by 26 million barrels while raising short positions by only 2 million barrels (http://tmsnrt.rs/2ADBuzF).Despite the profit-taking, bullish positioning in all contracts remained close to record levels, which continued to leave the market vulnerable to a further correction.From a fundamentals perspective, the positioning appears reasonable, given strong growth in consumption and the likelihood that OPEC will extend production cuts for a further nine months to the end of 2018 when ministers meet in Vienna this week.But prices have already risen a long way in a  short time and the hedge fund community has amassed a record number of positions that could make it hard to sustain buying momentum.

WTI Sinks After Surprise Crude Build -- Despite UAE oil minister jawboning, WTI/RBOB was sold today heading into the API data and extended losses after crude showed a surprise build (+1.82mm vs -2.95mm exp). Cushing saw a massive destocking and RBOB was steady after gasoline showed a surprise draw. API:

  • Crude +1.82mm (-2.95mm exp)
  • Cushing -3.178mm - most since Sept 2009
  • Gasoline -1.529mm (+1.2mm exp)
  • Distillates +2.696mm (+200k exp) - biggest since July

Following last week's small crude draw and gasoline build, hope was high but API showed a surprise crude build (and surprise gasopline draw)... The kneejerk reaction to the API was WTI lower and RBOB higher

OPEC's Impossible Task  - OPEC is on the verge of extending its production cuts for an additional nine months, pushing the deal through the end of 2018.  But the determination to keep the cuts in place comes at the same time that U.S. shale seems to be accelerating in response to higher oil prices.  It’s an impossible tension that OPEC has to deal with. Hesitate on cuts and risk another slide in oil prices, or keep the cuts in place and offer more room to U.S. shale? OPEC has tried to send a signal to the oil market that the group is operating with a consensus, and it telegraphed its intentions ahead of time to inspire confidence in the group’s cohesion. By demonstrating such resolve, the logic seems to be, the oil market would continue to tighten and prices would remain stable. But the downside of such a strategy is that it isn’t just oil traders who are confident in a more balanced oil market – U.S. shale has kicked drilling into a higher gear recently, and appears poised to continue to ratchet up production. The rig count has climbed for several consecutive weeks, and U.S. oil production is on the brink of hitting an all-time record high. The difficulty for OPEC, as Bloomberg Gadfly notes, is that the estimates for how much supply the U.S. will add next year differ by a wide margin. The IEA predicts non-OPEC supply growth by about 1.4 million barrels per day (mb/d) in 2018, a massive sum that would overwhelm demand. In this view, the OPEC cuts are badly needed to avoid another price collapse. OPEC is more hopeful that the shale industry will struggle; the cartel only predicts non-OPEC supply growth of less than 900,000 bpd next year.  There are plenty of signs to suggest that the shale industry is indeed facing unexpected troubles. But the problem for OPEC is that it simply can’t forecast with any accuracy what to expect from shale drillers over the next year. Nevertheless, the objective of the OPEC production limits is to drain global crude inventories back down to average levels, a goal that will take more time to reach. But while there are some warning OPEC about a shale comeback, there are also voices that are warning OPEC that it could be doing too much. Brent is already safely in $60-per-barrel territory, and extending the cuts through next year could push prices up even more.

OPEC, Russia head for oil cut extension but wary of overheating market (Reuters) - OPEC and Russia look set to prolong oil supply cuts until the end of 2018 this week while signaling that they may review the deal when they meet again in June if the market overheats. With oil prices rallying above $60 per barrel, Russia has questioned the wisdom of extending existing cuts of 1.8 million barrels per day (bpd) until the end of next year as such a move could prompt a spike in U.S. production. Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude. Six ministers from OPEC and non-OPEC oil producers including Saudi Arabia and Russia met in Vienna on Wednesday - one day ahead of a full OPEC gathering - and recommended extending the cuts to the end of 2018. At present, the cuts expire in March. “That’s one of the recommendations,” Kuwait’s Oil Minister Essam al-Marzouq told reporters when asked whether the committee had agreed on a nine-month extension, among other matters. Russian Energy Minister Alexander Novak was, however, less certain about the duration. “The market has not been fully balanced yet. Joint efforts are needed after April 1. Everybody has recommended that the agreement could be extended and tomorrow such concrete details will be discussed,” Novak said. Several sources familiar with the talks have said Russia had suggested an option of reviewing the deal at the next OPEC meeting in June in case the oil market overheats. “In reality it would be only a three-month true extension with the review in June,” said Olivier Jakob from Petromatrix consultancy. Benchmark Brent and U.S. crude prices fell for a third consecutive session on Wednesday but Brent still traded above $63 per barrel. [O/R] Saudi Energy Minister Khalid al-Falih told the monitoring meeting on Wednesday that cuts needed to be extended as the rebalancing of oil markets was not yet complete. Iranian oil minister Bijan Zanganeh, who fought Falih on many previous occasions, said he would agree with extending cuts by either six or nine months to help the market rebalance. 

Oil Trims Losses as U.S. Crude Stocks Drop 3.4M Barrels Last Week -- Oil prices pared losses on Wednesday, after data showed U.S. crude stockpiles dropped more than forecast last week.U.S. West Texas Intermediate (WTI) crude futures were at $57.87 a barrel, down 12 cents, or about 0.2%, by 10:35AM ET (1535GMT). Prices were at around $57.78 prior to the release of the inventory data.Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 10 cents, or around 0.2%, to $63.14 a barrel.The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 3.4 million barrels in the week ended Nov. 24. That compared with analysts' expectations for a decline of 2.3 million barrels, while the American Petroleum Institute late Tuesday reported a supply-gain of 1.8 million barrels.Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 2.9 million barrels last week, the EIA said.Total U.S. crude oil inventories stood at 453.7 million barrels as of last week, which the EIA considered to be at the upper half of the average range for this time of year.U.S. crude oil imports averaged 7.3 million barrels per day last week, down by 544,000 barrels per day from the previous week.The report also showed that gasoline inventories increased by 3.6 million barrels, compared to expectations for a gain of 1.2 million barrels. For distillate inventories including diesel, the EIA reported a gain of 2.7 million barrels.Oil prices extended their decline into a second session on Tuesday as doubts over an extension to a production-cut deal at Thursday's OPEC meeting weighed.Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on Thursday to decide whether to extend their current production agreement beyond a March 2018 deadline. Most market analysts expect the oil cartel to extend output cuts for a further nine months until the end of next year, but the terms were so far unclear, as Russia has sent mixed signals about whether it will back the move.

EIA: US commercial crude oil inventories decreased by 3.4 mln barrels --Below are the key highlights from the EIA's report's summary of weekly petroleum data for the week ending November 24, 2017.

  • U.S. crude oil refinery inputs averaged 17.0 million barrels per day during the week ending November 24, 2017, 165,000 barrels per day more than the previous week’s average.
  • U.S. crude oil imports averaged over 7.3 million barrels per day last week, down by 544,000 barrels per day from the previous week.
  • U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the previous week.
  • Total products supplied over the last four-week period averaged 20.0 million barrels per day, up by 0.9% from the same period last year.

RBOB Fades On Surprise Product Build, New Record High Production -- Last night's API-reported surprise crude build sparked selling that not even Russia/Saudi jawboning could rescue, but DOE data showed the exact opposite with a big crude draw and even bigger gasoline draw. Added to a new record high in US crude production and RBOB is fading and WTI is not rallying. DOE:

  • Crude -3.43mm (-2.95mm exp)
  • Cushing -2.914mm - biggest draw since Sept 2009
  • Gasoline +3.63mm (+1.2mm exp) - biggest build since July
  • Distillates  +2.747mm (+200k exp) - biggest build since Jan

DOE data showed the exact reverse of API with big surprise draw in crude and build in gasoline... Additionally Cushing saw the biggest destocking since Sept 2009 last week... US crude production rose 24k b/d - to a new record high...  Gasoline exports hit a record high... WTI was lower and RBOB higher heading into the DOE data but the trend reversed after on the surprise bearish product builds...

U.S. oil production surged in September as Texas rebounded from Harvey -  The nation's oil production climbed nearly 300,000 barrels a day in September, reaching the highest level since its most recent peak in April 2015, the Energy Department said Thursday. Energy companies pumped 9.48 million barrels of oil a day in September, up 3.2 percent compared to the 9.19 million barrels a day produced in August. Drillers in Texas, rebounding from the crippling effects of Hurricane Harvey, boosted output in September to 3.57 million barrels a day, up 5.7 percent from 3.38 million barrels a day the month before. U.S. output crested at 9.62 million barrels a day in April 2015, its highest level in four decades, after American drillers tapped into once-inaccessible shale rocks containing vast amounts of oil and natural gas. After oil prices crashed, production fell as low as 8.55 million barrels a day in September 2016.

Oil prices higher with Brent up sharply amid optimism over OPEC meeting  - Oil prices settled modestly higher on Thursday after OPEC members and other major oil producers agreed to extend their production-cut pact to the end of 2018. In a press conference Thursday, Saudi Energy Minister Khalid al-Falih said (http://www.marketwatch.com/story/opec-officially-announces-extension-of-output-cut-deal-to-end-of-2018-2017-11-30) the Organization of the Petroleum Exporting Countries and its oil-producing allies reached a "unanimous decision" to extend their oil output-cut deal to the end of December 2018. He also said Libya and Nigeria have agreed to cap their production at 2017 levels next year. "In agreeing to extend current production quotas OPEC and non-OPEC nations are managing a fine balance, which is likely to maintain prices at current levels in the near term," said Chris Midgley, head of analytics at S&P Global Platts said. Russian Oil Minister Alexander Novak also said the country, which isn't an OPEC member, fully agreed to extend the cuts. Clashes between Russia and Saudi Arabia in the run-up to the summit had raised concerns about the likelihood of the deal's extension.  January West Texas Intermediate crude added a dime, or less than 0.2%, to settle at $57.40 a barrel on the New York Mercantile Exchange. Prices for the contract climbed about 5.1% for the month. Based on the front-month December contract at the end of October, prices rose 5.6%. That was the third-consecutive monthly rise in a row.January Brent , the front-month contract which expired at the session's settlement, rose 46 cents, or 0.7%, to $63.57 a barrel on ICE Futures Europe. For the month, front-month prices ended around 3.6% higher, according to data from Dow Jones. February Brent , which is now the front-month contract, added 10 cents, or nearly 0.2%, to $62.63 a barrel. 

OPEC Agrees To Extend Oil Supply Cuts Until End Of 2018 - With OPEC delegates sequestered in a Vienna conference room, as they negotiate the proposed 6-9 month production cut extension, at least one appears to be leaking the decision process to media outlets, because moments ago Bloomberg reported that OPEC ministers have agreed to extend their production cuts until the end of 2018 - agreeing with the Saudi-proposed 9 month extension - and discussions have now moved on to the mechanism that will be used to review the agreement in the middle of the year. While oil prices had traded near session highs ahead of the leaked announcement, they have failed to spike on the news and in fact Brent is back under $64, suggesting that, as Goldman predicted, a favorable outcome had been priced in, and now the details of the agreement will determine which way oil moves next.

Crude Oil Prices Dip as OPEC Fails to Corral Russia: Update - - The Organization of the Petroleum Exporting Countries (OPEC) has agreed in principle to maintain until December 2018 production cuts scheduled to end in March. The Wall Street Journal reported the agreement citing sources familiar with the matter. That is not, however, what markets wanted to hear. Crude oil has been trading higher for the past several weeks on the expectation that Russia and other non-OPEC partners in the production cuts would agree to extend the lower production level until the end of next year. Russia has apparently balked, sending benchmark West Texas Intermediate (WTI) crude from an intra-day high of nearly $58 to just a few pennies above $57. Brent futures also dropped about $1 per barrel to trade at around $62.40. The Russians do not want to commit to an extension through December 2018. The world’s leading producer would prefer to extend the agreement only through June and then return to the status quo ante if market conditions are favorable. The current production cuts have removed about 2% of global supply. Russia is concerned that continuing the cuts for another nine months will work too well, driving prices to a level that will unleash another wave of investment and drilling in U.S. shale plays, running production higher and, once again, lowering prices. The Saudis are not worried about U.S. shale production because they believe the global market can absorb any increase from the shale producers. The Saudis are probably right. The United States is on track to reach a production level of 10 million barrels a day this year and to fill the 2% hole in global supply would need to add nearly 2 million more barrels daily next year. That is not going to happen.

OPEC, allies set to agree oil cut extension to end of 2018 (Reuters) - OPEC and non-OPEC producers led by Russia agreed on Thursday to extend oil output cuts until the end of 2018 as they try to finish clearing a global glut of crude while signaling a possible early exit from the deal if the market overheats. Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn’t flip into a deficit too soon, prices don’t rally too fast and rival U.S. shale firms don’t boost output further. Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude. The producers’ current deal, under which they are cutting supply by about 1.8 million barrels per day (bpd) in an effort to boost oil prices, expires in March. Saudi Energy Minister Khalid al-Falih told reporters the Organization of the Petroleum Exporting Countries and non-OPEC allies had agreed to extend the cuts by nine months until the end of 2018, as largely anticipated by the market. OPEC also decided to cap the combined output of Nigeria and Libya at 2017 levels below 2.8 million bpd. Both countries have been exempt from cuts due to unrest and lower-than-normal production. Falih said it was premature to talk about exiting the cuts at least for a couple of quarters as the world was entering a season of low winter demand. He added that OPEC would examine progress at its next regular meeting in June. “When we get to an exit, we are going to do it very gradually ... to make sure we don’t shock the market,” he said. OPEC and Russia together produce over 40 percent of global oil. Moscow’s first real cooperation with OPEC, put together with the help of President Vladimir Putin, has been crucial in roughly halving an excess of global oil stocks since January. With oil prices rising above $60, Russia has expressed concerns that an extension for the whole of 2018 could prompt a spike in crude production in the United States, which is not participating in the deal. A joint OPEC and non-OPEC communique said the next meeting in June 2018 would present an opportunity to adjust the agreement based on market conditions. 

OPEC Meeting Concludes: This Is What Was Agreed -- As previewed earlier this morning, when the flurry of leaks began, today OPEC reached a deal with non-OPEC partners to extend the oil production cuts until end of 2018 (recall these were supposed to be "temporary" when originally unveiled one year ago) at their meeting in Vienna, as part of producers' strategy to reduce global inventory levels.  Below is a summary, via Bloomberg, of the key items agreed on:

  • Analysts had previously predicted an extension; a survey showed 9 months as the most likely duration, measured from end of March 2018
  • Thursday’s Vienna agreement will have an effective start date of Jan. 1 and run through end-December 2018, superseding previous deal
  • Total volume of supply cutbacks from participating nations was left unchanged at ~1.8m b/d, ministers say
  • In addition, Nigeria and Libya agreed to a collective cap of 2.8m b/d; they had previously been exempt from supply curbs
  • Discussions in Vienna progressed as expected, with Joint Ministerial Monitoring Committee proposing on Wednesday an extension of 6 to 9 months, with a preference for 9
  • Thursday’s meeting has concluded; deal will be reviewed at June meeting
  • Joint Ministerial Monitoring Committee to meet every 3 months, chaired by Saudi Arabia and Russia

A key part of today's agreement was the provision that a "further adjustment" would be considered in June.

WTI Slumps Despite OPEC 'Deal' As Russia Questions Remain -- Both WTI and RBOB prices are tumbling this morning after OPEC member agree to limit oil output through the end of 2018. While this is bullishly longer-than-expected (6-9mo was expected), OPEC members now rely on Russia to agree to these terms, and it appears the market is questioning that. Furthermore, despite US shale output at record highs, Saudi officials are shrugging off any impact.As The Wall Street Journal reports, OPEC members agreed in principle Thursday to keep limiting their output through the end of 2018, according to people familiar with the matter, providing assurance for an oil industry still struggling through a fragile recovery.The accord signals that the world’s biggest oil-producing countries believe that a global oversupply of oil is still weighing down oil prices, even a year after they struck their first agreement to cut crude production. Oil in storage—a proxy for the global glut—remains well above historical averages, national oil ministers said.Any agreement OPEC strikes will be contingent on support from a group of producers outside the cartel led by Russia, which pumps more crude than any country in the world. The Russia-led delegations are meeting with OPEC to hash out a final agreement. It appears the market is questioning Russia's acquiescence...

OPEC : Declaration of Cooperation -- OPEC and the aforementioned non-OPEC producing countries have reached the following commitment:

  1. OPEC maintains its decisions made on 30th November 2017;
  2. The Declaration of Cooperation is hereby amended to take effect for the whole year of 2018 from January to December 2018, while pledging full and timely conformity of OPEC and participating non-OPEC countries in accordance with voluntary agreed production adjustments.
  3. In view of the uncertainties associated mainly with supply and, to some extent, demand growth it is intended that in June 2018, the opportunity of further adjustment actions will be considered based on prevailing market conditions and the progress achieved towards re-balancing of the oil market at that time.
  4. Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, Republic of South Sudan maintain to continue to adjust their respective oil production, voluntarily or through managed decline.
  5. Pledge to fulfil their full commitment under this Declaration of Cooperation, individually and collectively;
  6. To strengthen their cooperation through a dynamic and transparent framework, including regular monitoring, joint analyses and outlooks for a sustainable market stability in the medium- to long-term, for the benefit of producers and consumers;
  7. To support the extension of the mandate of the Joint Ministerial Monitoring Committee (JMMC) composed of Algeria, Kuwait, Venezuela, Saudi Arabia and two participating non-OPEC countries of the Russian Federation and Oman, chaired by Saudi Arabia, co-chaired by the Russian Federation, and assisted by the Joint Technical Committee at the OPEC Secretariat, to closely review the status of and conformity with the Declaration of Cooperation and report to the OPEC – non OPEC Conference;
  8. To ensure continuity and proactive cooperation through established regular meetings at technical and ministerial levels.

Saudi Arabia and Russia reach compromise on oil pact: Kemp (Reuters) - Ministers from OPEC and their allies have agreed to extend their production pact all the way to the end of 2018 but with a review in June that will take into account market conditions and progress towards rebalancing.The outcome represents a successful compromise between de facto OPEC leader Saudi Arabia (which wanted to announce an extension throughout 2018) and non-OPEC heavyweight Russia (which wanted to avoid giving such a long commitment).The decision was in line with traders’ expectations and there has been little change in either outright crude prices or calendar spreads since the decision was announced on Thursday.As a practical matter, it makes little difference whether the decision is described as a nine-month extension from the end of March, when the current cuts were scheduled to expire; or a three-month extension from March to June with the option of extending them until December 2018.The compromise allows ministers to signal a resolve to do whatever it takes to rebalance the market (a Saudi priority) while preserving flexibility to adapt to changing market conditions (a Russian one).Critically, it recognises the oil market has already made significant progress towards rebalancing but also that there is uncertainty about how quickly the process will be completed (http://tmsnrt.rs/2zS3IX9).Saudi Arabia’s oil minister Khalid Al-Falih said on Thursday the excess of OECD oil stocks over the five-year average had already shrunk from 280 million barrels in May to just 140 million in October.Crude oil in floating storage has fallen by 50 million barrels since June, and products stocks are already down to their five-year average (“Opening address to the 173rd meeting of the OPEC conference”, Falih, Nov. 30). Both Brent and WTI have flipped from contango into backwardation for the first time since 2014, Falih noted, indicating the market’s move towards a more balanced condition.

OPEC deal calls on Libya, Nigeria to produce below 2.8 mil b/d combined: Iran's Zanganehr - OPEC ministers on Thursday agreed to a nine-month extension of their production cut agreement through the end of 2018, and will call on Libya and Nigeria not to exceed a combined output of 2.8 million b/d, Iranian oil minister Bijan Zanganeh told reporters. "We decided to roll over the past decision to the end of 2018, and Nigeria and Libya accepted not to produce more than their production in 2017 for all of 2018," Zanganeh said. "We didn't set a figure [for Libya and Nigeria], but both are less than 2.8 [million b/d]." Russian energy minister Alexander Novak, who has remained noncommittal on the nine-month extension, has yet to sign off on the deal and is currently meeting with OPEC ministers. The current deal calls on OPEC and its 10 non-OPEC partners, led by Russia, to cut 1.8 million b/d in supplies from October 2016 levels to hasten the market's rebalancing. It is scheduled to expire in March. OPEC granted Libya and Nigeria their exemptions when the production cut agreement with 10 non-OPEC countries was negotiated late last year, as the two African nations dealt with internal strife and civil unrest that had targeted their oil infrastructure. But both countries have seen sharp rises in production this year, partially undoing the impact of the OPEC/non-OPEC coalition's collective 1.8 million b/d in supply reductions. Libyan output rebounded to 980,000 b/d in October, a rise of 70,000 b/d from the previous month as production from key fields like Sharara ramped up. The normally talkative Mustafa Sanalla, the chairman of Libya's state-owned National Oil Corporation, attended the Vienna meeting, but refused to speak with journalists. He has outlined ambitious plans to raise Libyan production from current levels of around 1 million b/d to 1.25 million b/d by the end of 2017.

As OPEC extends output cuts, Asia turns to North America for more oil (Reuters) - Asian refiners are losing no time reacting to a decision by OPEC and Russia to extend their agreed production cuts to all of 2018, ordering more oil from the Caribbean and Gulf of Mexico in a move that will result in lost OPEC and Russian market share. r Output cuts aimed at tightening the market to prop up prices have been in place since January and were to expire in March 2018, but the Organization of the Petroleum Exporting Countries (OPEC), together with non-OPEC producers including Russia, extended those cuts on Thursday, to cover all of 2018. Despite this, oil supplies remain ample. Even before the official announcement on Thursday to extend the cuts, refiners in Asia, the world’s biggest consumer region, had already put in enquiries for oil shipments from the Gulf of Mexico and the wider Caribbean, particularly from the United States, Mexico, Venezuela and Colombia, tanker operators said. “There have been many enquiries from Asia for oil tanker shipments from the Gulf of Mexico and Caribbean. Now that we know OPEC’s cuts will be extended, these enquiries are being turned into orders,” OPEC’s and Russia’s biggest problem with cutting output has been that it has led to higher U.S. production and market share. “U.S. crude oil exports to China could easily double next year as U.S. production and export capacity expands ... (and) OPEC countries will see their market shares in Asia decline further.” Shipping data in Thomson Reuters Eikon shows oil shipments from the Gulf of Mexico and the Caribbean to Asia’s consumer hubs of China, Japan, South Korea, Taiwan and Singapore have already soared from around half a million barrels per day (bpd) in January, when the OPEC-led cuts were implemented, to over 1.2 million bpd in November and December. 

OilPrice Intelligence Report: OPEC Extension Sends Oil Prices Soaring - OPEC followed through on its promise, extending the production cuts through the end of 2018, bringing relief to an oil market that had grown jittery in recent days. Oil prices traded in a relatively narrow range after the meeting and appeared muted. But once concerns over a selloff calmed, oil prices rallied once again on Friday morning.  The deal will run from January through to December, and the exact volumes of the production cuts will be the same as this year. The OPEC/non-OPEC coalition said that they would monitor market conditions and would remain “agile,” ready to respond if the fundamentals deviate significantly from expectations. They will revisit the agreement at the next official meeting in June 2018, but they assume the cuts will last through the end of the year. Russian officials pressed for details on an exit strategy heading into the meeting, but the group offered no information – Saudi oil minister Khalid al-Falih said it would be “premature” to do so. One notable change is that Libya and Nigeria agreed to cap their production levels at their 2017 average, which doesn’t necessarily curtail supply but will prevent any “surprise,” as witnessed this year. The Russian and Saudi oil ministers played up their unity and boasted about their strong relationship.  While OPEC was meeting behind closed doors, the EIA published data for September, showing a dramatic jump in output. The U.S. produced 9.48 million barrels per day in September, an increase of 290,000 bpd from a month earlier. Aside from the size of the increase, the data was significant because it seemed to put to rest the notion that the agency was overestimating supply. For several months, the weekly data diverged from the monthly data, raising questions about how accurate the EIA’s estimates were. Yesterday’s data suggests that U.S. shale production is indeed growing robustly.

Oil Rig Count Rises After OPEC Deal Extension - A day after OPEC extended the already-extended production cut deal to end-2018, oil and gas rigs in the US climbed by 6. The boost to the number of oil and gas rigs in the US is likely just a taste of what’s to come if oil prices continue to climb as a result of OPEC’s prolonging of the deal that is designed to ease the glut. And at current prices of WTI, US drillers are bound to find sufficient funds to add rigs, pressuring the prices that OPEC is attempting to hold fast. This week, the number of active oil rigs increased by 2, with gas rigs climbing by 4. The WTI and Brent benchmarks slipped shortly after the agreement was signed on Thursday, but rebounded on Friday, with WTI up $1.23 (+2.14%) to $58.63 and Brent up $1.36 (+2.17%) to $63.99 around 11:00am EST. The total oil and gas rig count in the United States now stands at 929 rigs, up 332 rigs from a year ago. The number of oil rigs stand at 749 versus 477 a year ago. The number of gas rigs in the US now stands at 180, up from 119 a year ago. The Permian Basin added 4 rigs for the week, bringing the total count in the fastest growing shale patch to 397 compared to just 235 a year ago. Haynesville basin was also up this week, adding 3 rigs for a total of 43 actives. Rigs in the Eagle Ford basin stayed the same, with Barnett, Cana Woodford, and DJ-Niobrara each losing one rig.Canada also added rigs this week—4 oil rigs and 3 gas rigs, for a total of 7. Along with an increase to the number of active oil rigs, US crude oil production was up for the week ending November 24 at 9.682 million barrels per day—another new high for 2017 as new highs are achieved each week.

U.S. drillers add oil rigs for second week in a row: Baker Hughes (Reuters) - U.S. energy companies this week added oil rigs for a second week in a row as crude prices traded near their highest levels since the summer of 2015 as major oil producing countries extended a global deal to limit supply. Drillers added two oil rigs in the week to Dec. 1, bringing the total count up to 749, the highest since September, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. U.S. producers applauded Thursday’s decision by the Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia to extend oil output cuts of about 1.8 million barrels per day beyond March until the end of 2018 as they try to finish clearing a global glut of crude. Rising U.S. production, however, has been a thorn in OPEC’s side, undermining the impact of its output curbs. U.S. production rose to 9.5 million bpd in September, its highest monthly output since reaching 9.6 million bpd in April 2015, according to federal energy data going back to 2005. On an annual basis, U.S. output peaked at 9.6 million bpd in 1970. The U.S. rig count, an early indicator of future output, is still much higher than a year ago when only 477 rigs were active after energy companies boosted spending plans for 2017 as crude started recovering from a two-year price crash around the same time OPEC agreed to production cuts a year ago. The increase in U.S. drilling lasted 14 months before stalling in August, September and October as some producers started trimming their 2017 spending plans after prices turned softer over the summer. Energy firms started adding rigs again in November as crude prices rose. U.S. crude futures rose 5.5 percent in November amid talk of extending the OPEC-led deal to cut global supply, and so far in 2017 since the agreement kicked in, have averaged over $50 a barrel, easily topping last year’s $43.47 average. This week, futures climbed over $58 a barrel, near their highest since June 2015. Looking ahead, futures were trading near $57 for calendar 2018 and $54 for calendar 2019. In anticipation of higher prices than in 2016, exploration and production (E&P) companies increased their spending on U.S. drilling and completions in 2017 by about 53 percent over 2016, according to U.S. financial services firm Cowen & Co. In addition, Cowen said 14 of the 64 E&Ps they track have already provided capital expenditure guidance for 2018 indicating a 9 percent increase in planned spending over 2017. 

 U.S. oil prices end higher, but suffer largest weekly loss in 2 months - Oil futures climbed Friday, lifting U.S. benchmark prices to their highest finish in a week, after major oil producers hammered out an agreement that was widely expected, to extend ongoing production curbs through 2018. However, concerns about growing output from producers who aren't part of the deal, particularly the U.S., helped pull West Texas Intermediate prices down for the week. January WTI crude climbed 96 cents, or 1.7%, to settle at $58.36 a barrel on the New York Mercantile Exchange. That was the highest settlement since last Friday, but it was still down about 1% for the week, FactSet data show. The weekly percentage loss was the largest since the first week of October. February Brent crude put on $1.10, or 1.8%, to $63.73 a barrel, with the new front-month contract up 0.4% for the week. Oil prices settled modestly higher Thursday after Organization of the Petroleum Exporting Countries reached a "unanimous decision" with other major oil producers to extend their production-cut pact to the end of 2018. Soothing some concerns about a clash with Saudi Arabia in the run-up to the meeting, Russian Oil Minister Alexander Novak also said his country, not an OPEC member, fully agreed to extend the cuts.  Adherence to the 2017 quota levels beyond [the first quarter of 2018] for OPEC and Russia will create a fundamentally tighter balance by around [400,000 barrels a day] (all else equal) and therefore presents upside risk to our price forecast for [the second half of 2018]," wrote Michael Cohen and Warren Russell, of the Barclays commodities research team, in a note. An agreement between OPEC and several non-OPEC countries, including Russia, to cut production by roughly 1.8 million barrels a day from October 2016 levels was implemented in January, in a effort to rebalance market supply and demand. The cuts were previously set to end in March of 2018. Still, the oil-producer meeting "ended up being a bit of a wash for the market and futures appropriately ended almost perfectly flat". WTI and Brent each tacked on a dime Thursday.

The MbS-Blackwater Marriage Of Convenience -- In my previous related articles and herein, I have mentioned and reiterate that MBS is increasingly gaining popularity within the ranks of young and educated Saudi men and women of all ages and in general amongst the grass-roots of the population. Hence, in this venture, he is scoring two birds with a single stone. In rounding up more popular support, he is confiscating and freezing badly-needed cash under the pretext of corruption. The estimates of the number of incarcerated Saudi princes and businessmen are not any less subject to a game of guess work than the funds involved in this kerfuffle. Ignoring how many men have been put under detention, the tally of funds confiscated and frozen is estimated at a minimum of USD 150 bn to a maximum of USD 800 bn. Given that the total official Saudi savings reserve is in the tune of “only” USD 700 bn after decades of high financial times, even the low estimate of USD 150 bn is a huge sum by proportion and by any proportion of course. It is little surprise that MBS is trying to replenish into the coffers of the state such sums, and if he manages to do it, it would be to his credit. With MBS’s purge on the royals, no traditional royal supporter with known wealth is left feeling safe. How can they feel safe if they hear reports of news of princes like Al-Walid bin Talal not only being in custody, but also getting tortured and his assets frozen and sieged by the state. In my previous article, The Second Saudi Dynasty: MBS’s Reset Button, I wondered how can MBS count on any local supporters. Apparently, he is not. Recent inside information that was later on published in various media, reports that MBS has been using Blackwater to do his dirty work. If those reports are true, MBS has hired Blackwater to arrest, with orders to kill whoever resists arrest, Saudi princes and high-ranking businessmen, and to answer to no one but him.

Tolerance And Terrorism In Saudi Arabia - On the one hand this past week, Thomas Friedman at the New York Times has written a praising column about Crown Prince Muhammed bin Salman (MbS). He is going to bring a new “wave of tolerance” into Saudi Arabia, along with more generally modernizing it. This claim is not totally without substance given his setting up for women to drive starting next June as well as letting them go to sports events with men and also curbing some of the excesses of the Mutaween, the religious police. It is not clear what further liberalizations are in order, but Friedman assures they are coming. A newly tolerant Saudi Arabia is on our doorstep, whoopee! OTOH, it has since been announced that MbS is overseeing a rewriting of the criminal code of the Kingdom of Saudi Arabia (KSA). A major part of this rewriting is to help the government combat terrorism, with the death penalty available for helping to aid in this. Just as we all oppose corruption, which MbS fought by arresting 201 people, many of whom also seem to have been potential political rivals or critics, we all oppose terrorism. But just as with corruption, terrorism can be stretched to mean many things. And indeed, it turns out that one of the items appearing in the new criminal code is that criticizing the king is an act of terrorism, punishable by death. This is how one has tolerance while fighting terrorism at the same time in the new Saudi Arabia, whoopee!

Detained Saudi Prince Buys His Freedom For $1 Billion -- One day you were the billionaire head of the National Guard in one of the world’s most brutal dictatorships. Although that carries some risk, you were probably reassured by your position as a senior prince in the ruling family, never mind your strong ties to the US military... oh and of course the many zeros in your bank account. The next day, in a turn of events akin to Shakespearian drama, you were imprisoned (kind of) with ten of your fellow princes and a bunch of ministers and former ministers in a 5 star hotel on charges of money laundering, bribery and general corruption. Despite being a cousin of the Kingdom’s uber-autocratic crown prince, Mohammed bin Salman (MBS), Prince Miteb bin Abdullah was a son of former King Abdullah and got caught up in a clan war in the ruling family. Former Riyadh governor and another of King Abdullah’s sons, Turki bin Abdullah, was also arrested in the crackdown. Miteb was accused of conducting normal business practices in Saudi Arabia, such as embezzlement, hiring “ghost” employees and awarding his own companies a $10 billion contract for walkie-talkies and bullet proof protection. However, after what must have been the worst three and a half weeks of his life in the Ritz Carlton “prison”, Miteb has purchased his freedom for a cool $1 billion. According to Bloomberg, "Prince Miteb bin Abdullah, one of the most senior Saudi royals detained in the kingdom’s corruption crackdown, has been released after reaching a settlement deal believed to exceed the equivalent of $1 billion, an official involved in the anti-graft campaign said."

 Saudi Prince Who Wooed West Finds Few Friends in Tough Times -- For more than a quarter-century, Saudi Arabia’s Prince Alwaleed bin Talal has been making investments and building relationships in the West.  He bailed out Citigroup Inc., helped refinance the ill-fated Euro Disney and backed Rupert Murdoch during the U.K. phone-hacking scandal. Now, as Alwaleed passes a fourth week at a Riyadh hotel, one of hundreds of detainees in an anti-corruption crackdown, almost no one has rallied to his cause. Bill Gates, the Microsoft Inc. co-founder and philanthropist, said in a statement Monday that Alwaleed, 62, has been an “important partner” in their charitable work together. Earlier this month, Citigroup CEO Michael Corbat called him a “consistent, loyal supporter.” They don’t have much company. For Alwaleed, the relative silence is a skimpy return on the billions he’s invested over the years in everything from Twitter Inc. to Europe’s biggest hotel operator, Accor SA. Yet his situation reflects a harsh reality: As much as his friends and business associates may want to support him publicly, they’re wary of being perceived as critics of the crackdown and the man behind it, Saudi Arabia’s Crown Prince Mohammed bin Salman. The son of King Salman, Prince Mohammed is trying to modernize the Saudi economy in part by weaning the country off its decades-long dependency on oil revenue. His anti-corruption drive threatens to end a patronage system that allowed royals and Saudi businesspeople to grow wealthy off government contracts and lucrative deals with multinational corporations. “There is a recognition that attempting to interfere in the process in Saudi Arabia is unlikely to yield a lot of results, given that this has been driven by Mohammed bin Salman himself,” Ayham Kamel, head of Middle East & North Africa at Eurasia Group, said in a phone interview. “Any public defense of Prince Alwaleed or others would not necessarily be conducive to their interests in Saudi Arabia, or those of the individuals implicated.” 

A Prince’s Uncertain Fate Deepens Mystery in Saudi Arabia - It has been more than three weeks since Prince Alwaleed bin Talal, the most prominent investor in Saudi Arabia, was arrested on a Saturday night as part of the sweeping detention of several dozen elites. He hasn’t been heard from, nor have any charges against him been made public. Because he was the longtime public face of finance for Saudi Arabia, Prince Alwaleed’s arrest — and the lack of transparency around what has happened to him — is causing increasing consternation among his various business partners and in much of the Western business community.His arrest has also created a sense of uncertainty among investors about whether to do business with Saudi Arabia and, by extension, could affect some of its partners, like Masayoshi Son’s $100 billion SoftBank fund, in which the kingdom holds a 45 percent stake. It could also affect the highly anticipated public offering of the state-owned oil company, Aramco, planned for next year.“I’m surprised that he got swept up in this, because he had always been such a positive figure both in reality and symbolically for Saudi progressivism — for participating in the modern world, in modern finance,” said Richard Parsons, a former chief executive of Time Warner and former chairman of Citigroup, in which the prince had also been a large investor. Many of the prince’s longtime partners have sought information about him, but have not been able to learn about his well-being or the charges against him. The Murdoch family, which has long had a relationship with the prince — he has been a large investor in 21st Century Fox, which in turn has a nearly 20 percent stake in Rotana, the media company he controls — has tried to find out more about his situation but has been stymied. Known as the Warren Buffett of the Middle East, the prince has worked with Bill Gates on various projects, including their ownership of the Four Seasons resorts and several philanthropic endeavors. “I’m only aware of what I’ve read in the press, and I can’t speculate,” Mr. Gates, Microsoft’s co-founder, said by email. “Prince Alwaleed has been an important partner in my foundation’s work to ensure that kids around the world receive lifesaving vaccinations. We’ve worked together to help stop the spread of polio, measles and other preventable diseases. His commitment to philanthropy is inspiring.”  The Saudi Arabian government has officially described the arrest of Prince Alwaleed and dozens of other princes and businessmen as part of a long-planned “anticorruption” effort. But outside the country, questions remain. The arrests have been called everything from a power grab by the crown prince, to a shakedown, to a Saudi version of “the Saturday Night Massacre.”

With Saudi Blockade Threatening Famine in Yemen, U.S. Points Finger at Iran - The White House is pressing to declassify intelligence allegedly linking Iran to short-range ballistic missile attacks by Yemeni insurgents against Saudi Arabia, part of a public relations blitz aimed at persuading America’s U.N. counterparts that Tehran is helping to fuel the country’s conflict. The effort to cast blame on Iran comes at a time when the U.S.-backed Saudi military coalition in Yemen is facing mounting international condemnation for enforcing a blockade on vital ports that threatens to plunge the country into a massive famine. The declassification push is part of a broader U.S. bid to isolate Tehran in the U.N. Security Council, and potentially to provide a justification for enforcing sanctions or imposing new penalties against Tehran. It marks a surprising recognition by President Donald Trump — who dismissed the United Nations as a feckless talk shop during his presidential campaign — that the world body is critical for rallying international support. The U.S. campaign to highlight Tehran’s violation of U.N. sanctions suffered a setback earlier this month,when a U.N. panel of experts disclosed it has received no proof that Iran furnished Yemen’s Shiite Houthi insurgents with the missile it fired on Nov. 4 at an airport near the Saudi capital of Riyadh. The attack was cited earlier this month by Saudi Arabia as a justification for imposing a blockade on Houthi-controlled ports and the airport in Yemen’s capital, Sanaa, a move condemned by aid agencies as paving the way to a humanitarian catastrophe. Saudi Arabia announced Wednesday that it would reopen the port in Hodeida and the airport in Sanaa to humanitarian aid deliveries. But the move was criticized by the International Rescue Committee as a half measure which will continue to block the import of vital commercial goods and fuel.

Saudi Coalition Crumbles In Yemen: Sudanese Mercenaries On Front Lines, Foreign Officers, Proxies In Revolt -- Most Americans might be forgiven for having no clue what the war in Yemen actually looks like, especially as Western media has spent at least the first two years of the conflict completely ignoring the mass atrocities taking place while white-washing the Saudi coalition's crimes. Unlike wars in Iraq, Libya, and Syria, which received near daily coverage as they were at their most intense, and in which many Americans could at least visualize the battlefield and the actors involved through endless photographs and video from on the ground, Yemen's war has largely been a faceless and nameless conflict as far as major media is concerned.Aside from mainstream media endlessly demonstrating its collective ignorance of  Middle East dynamics, it is also no secret that the oil and gas monarchies allied to the West are rarely subject to media scrutiny or criticism, something lately demonstrated on an obscene and frighteningly absurd level with Thomas Friedman's fawning and hagiographic interview with Saudi crown prince MBS published in the New York Times. But any level of meticulous review of how the Saudi coalition (which heavily involves US assistance) is executing the war in Yemen would reveal a military and strategic disaster in the making. As Middle East Eye editor-in-chief David Hearst puts it, "All in all, the first military venture to be launched by the 32-year-old Saudi prince as defense minister is a tactical and strategic shambles."    And if current battlefield trends continue, the likely outcome will be a protracted and humiliating Saudi coalition withdrawal with the spoils divided among Houthi and Saudi allied warlords, as well as others vying for power in Yemen's tenuous political future. But what unsurprisingly unites most Yemenis at this point is shared hatred for the Saudi coalition bombs which rain down on civilian centers below. For this reason, Hearst concludes further of MBS' war: "The prince, praised in Western circles as a young reformer who will spearhead the push back against Iran, has succeeded in uniting Yemenis against him, a rare feat in a polarized world. He has indeed shot himself, repeatedly, in the foot."

‘The Saudis are Going to Fight Tehran to the Last Dead American’ - naked capitalism - Lambert here: NC readers, this Real News Network segment on our friends, the Saudis, concludes with grounds for optimism, in this exchange between TRNN’s Paul Jay and Larry Wilkerson:

    • JAY: [The administration] can’t execute much of anything right now.
    • WILKERSON: You’ve got a point. I’ve often said, and from time to time Colin Powell and I would joke about that the best thing going for us was incompetence.

So, “gridlock is our friend” in foreign policy, as well. (By contrast, we were extremely competent at overthrowing Qaddafi and getting his country bombed, and look where that got us.) (video and transcript)

Long Divided, Iran Unites Against Trump and Saudis in a Nationalist Fervor - After years of cynicism, sneering or simply tuning out all things political, Iran’s urban middle classes have been swept up in a wave of nationalist fervor. The changing attitude, while some years in the making, can be attributed to two related factors: the election of President Trump and the growing competition with Saudi Arabia, Iran’s sectarian rival, for regional dominance.  Iranians listened during the 2016 campaign as Mr. Trump denounced the Iran nuclear treaty as “the worst deal ever negotiated” and promised to tear it up. They watched in horror when, as president, he sold more than $100 billion worth of weapons to the kingdom of Saudi Arabia and participated in a traditional war dance in Riyadh. And they are alarmed at the foreign policy moves of the young Saudi crown prince, Mohammed bin Salman, whom they see as hotheaded and inexperienced. At the same time, they now believe they have something to be proud of, with Iranian-led militias playing a central role in defeating the Islamic State militant group in Syria and Iraq, increasing Iran’s regional influence in the process.The two most popular stars in Iran today — a country with thriving film, theater and music industries — are not actors or singers but two establishment figures: Gen. Qassim Suleimani, the leader of Iran’s regional military effort, which is widely seen as a smashing success; and the foreign minister, Mohammad Javad Zarif, the symbol of a reasonable and measured Iran.  In short, it appears that Mr. Trump and the Saudis have helped the government achieve what years of repression could never accomplish: widespread public support for the hard-line view that the United States and Riyadh cannot be trusted and that Iran is now a strong and capable state capable of staring down its enemies.

China pumps billions into Iranian economy as Western firms hold off | South China Morning Post: China is financing billions of dollars worth of projects in Iran, making deep inroads into the economy while European competitors struggle to find banks willing to fund their ambitions, Iranian government and industry officials said on Friday. Freed from crippling nuclear sanctions two years ago, Iran is drawing unprecedented Chinese funding for everything from railways to hospitals, they said. State-owned investment arm CITIC Group recently established a US$10 billion credit line and China Development Bank is considering lending US$15 billion more. “They [Western firms] had better come quickly to Iran otherwise China will take over,” said Ferial Mostofi, head of the Iran Chamber of Commerce’s investment commission, speaking on the sidelines of an Iran-Italy investment meeting in Rome. The Chinese funding, by far the largest statement of investment intent of any country in Iran, is in stark contrast with the drought facing Western investors since US President Donald Trump disavowed the 2015 pact agreed by major powers, raising the threat sanctions could be reimposed. Iranian officials say the deals are part of Beijing’s US$124 billion Belt and Road Initiative, which aims to build new infrastructure – from motorways and railways to ports and power plants – and link China with Europe and Africa to pave the way for an expansion of trade. A source in China familiar with the CITIC credit line, which was agreed in September, called it “an agreement of strategic intent”. The source declined to give details on projects to be financed, but Iranian media reports have said they would include water management, energy, environment and transport projects. An Iranian central bank source said loans under the credit line would be primarily extended in euros and yuan. The China Development Bank signed a memorandum of understanding for US$15 billion, Iranian state news agency IRNA said on September 15. 

New round of Syria talks opens in Geneva -- Syria's government and opposition will start a new round of UN-brokered talks in Geneva on Tuesday, but there is little optimism for progress towards ending the seven-year conflict.After months of stalemate, the talks are expected to focus primarily on a new constitution and elections, two of the four so-called "baskets" of reforms laid out by the United Nations for a political settlement to the Syria crisis.The UN's special envoy for Syria, Staffan de Mistura, said he hoped the warring factions would start a fresh round of negotiations "without preconditions" and within the framework of the UN Security Council's resolutions."We are all moving, I hope, in the direction of implementing Resolution 2254 and a political solution long overdue in Syria," said De Mistura from Moscow on Friday, at the end of a frantic week spent between the Saudi and Russian capitals in a bid to ensure that both the government and the opposition would come to Geneva ready to lay the groundwork for a political solution. De Mistura announced earlier that he would press hard for "particular up-front attention on a new constitution and UN-supervised elections", two of the four baskets, which also include a non-sectarian transitional government and "counterterrorism" measures.

Putin Is Mediating A Secret Deal Between Assad And Netanyahu, Bombshell Report Reveals -- A bombshell report that Israeli Prime Minister Benjamin Netanyahu has threatened to attack all Iranian facilities and assets within 40 kilometers (25 miles) of Israel's Golan Heights is circulating in Israeli media. The story, first picked up by The Jerusalem Post based on Israeli and Arab sources, also indicates that intense and potentially breakthrough back channel diplomacy between Assad and Netanyahu is currently being mediated via Vladimir Putin.Though unconfirmed, what appears to be an ultimatum by Netanyahu could be the catalyst that finally pushes the Levant either toward broader war, o r in the direction de-escalation and regional stability after months of intensifying and provocative Israeli airstrikes on Syria and a corresponding war of words. The report also follows on the heels of a rare and unexpected visit of Assad to Sochi, Russia where he met with Putin just prior to trilateral talks between Russia, Iran, and Turkey over the future of Syria. Netanyahu himself recently met with Putin in a reportedly contentious summit in August where the Israeli prime minister declared, "We cannot forget for a single minute that Iran threatens every day to annihilate Israel. Israel opposes Iran's continued entrenchment in Syria. We will be sure to defend ourselves with all means against this and any threat."

Damascus throws 'transition' up in air by skipping Geneva talks | Asia Times: Any hopes pinned on the eighth round of UN-mandated talks in Geneva yielding a firm peace settlement in Syria were dealt a blow on Tuesday as Damascus skipped the opening date in a move that threatens to derail the entire process. The Syrian government delegation is expected to make a brief stop-over in Switzerland on Wednesday (November 29), during which it will explain its non-appearance to the UN Special Envoy, Staffan De Mistura. Whatever hopes he had that this time of direct, face-to-face talks between the warring Syrian factions are dead in the water.Also on Tuesday, it was announced that a Kremlin-sponsored “national dialogue conference” due to be held at the Russian Black Sea resort of Sochi has been postponed. The brainchild of President Vladimir Putin, it was due to convene on 2 December 2017, and would have brought 1,300 Syrians to the negotiating table. The tentative new date for Sochi is 15 January. This is the second postponement after two initial dates were penciled in and then scrapped in November. A ninth round of talks in Switzerland, tentatively set for December 8, was also due to happen before Christmas but that too has now been put off. This wasn’t supposed to happen. Hadn’t Presidents Donald Trump and Vladimir Putin agreed to work together on Syria during their last meeting in Vietnam in mid-November? Their joint statement was well-received in both Moscow and Damascus, and Trump commented that “I think people are going to be extremely happy with it and also very impressed by it.” The statement stressed that there was no military solution for Syria, only a political one, and spoke both of constitutional reforms and elections, while acknowledging President Bashar al-Assad’s “commitment” to the political process. As far as the Russians were concerned, this was a de facto statement by the US of surrender to Putin’s long-held stance on Syria – namely that the regime should not be toppled, that Assad should be part of the country’s transition and that he should be allowed to run for a new term when his current tenure expires in 2021. 

The Challenge of Saudi-Israeli Intelligence-Sharing – Saudi-Israeli relations, especially between their intelligence services, started several years back under the direction of Bandar bin Sultan, a former Saudi ambassador to Washington and a former director of the Saudi national security council.These relations, however, accelerated significantly during the P5+1 negotiations over the Iran nuclear deal, and especially since Muhammad bin Salman (MbS) became the de facto ruler of Saudi Arabia.Saudi Arabia and Israel joined forces in a vigorous lobbying campaign in Washington to thwart the nuclear deal, to no avail. Despite failing to derail it, they have since collaborated closely to undermine the agreement and demonise Iran. Their claims that Iran has violated the conditions imposed on it under the deal have not been recognised by international observers or the International Atomic Energy Agency (IAEA).With MbS’ dramatic rise to power, bellicose attitude towards Iran and more recently Hezbollah, along with the failing war in Yemen, and his unabashed power grab in the kingdom under the guise of fighting corruption, he once again has joined forces with the Israelis to halt the spread of a “Shia Crescent” in the Middle East.MbS naively thinks that an alternative “Sunni Crescent” could constrain Iran’s regional stature and influence, or would be more palatable to western audiences and policymakers, including Israel’s right-wing government.The Saudi crown prince’s anti-Iran campaign has been welcomed by Israel, especially since MbS expanded his rabid anti-Shia front to include Hezbollah and Lebanon. By accusing tiny Lebanon of declaring war on Saudi Arabia – a patently ludicrous claim – MbS hopes to cement his relations with the Israelis, as they consider Lebanon their backyard and Hezbollah their mortal enemy. Saudi intelligence contacts with Israel’s external intelligence service – the Mossad – are part of the expanding relations between Israeli intelligence and the other GCC countries, especially Bahrain and the UAE.

 151 UN states vote to disavow Israeli ties to Jerusalem - The UN General Assembly voted overwhelmingly to disavow Israeli ties to Jerusalem as part of six anti-Israel resolutions it approved on Thursday in New York. The vote was 151 in favor and six against, with nine abstentions. The resolution came as the Trump Administration was rumored to be actively considering relocating its embassy to Jerusalem. “The president has said that he has given serious consideration to the matter, and we’re looking at it with great care,” US State Department spokeswoman Heather Nauert said. She added that US President Donald Trump had until December 4th to make a decision on the embassy relocation or waive the matter for another six months. In New York, only six countries out of 193 UN member states fully supported Israel’s ties Jerusalem: Canada, Marshall Islands, Micronesia, Nauru, the United States and Israel itself. The nine countries who abstained were: Australia, Cameroon, Central African Republic, Honduras, Panama, Papua New Guinea, Paraguay, South Sudan and Togo. The resolution stated that “any actions taken by Israel, the occupying Power, to impose its laws, jurisdiction and administration on the Holy City of Jerusalem are illegal and therefore null and void and have no validity whatsoever.” These words fall in line with similar resolutions approved in 2015 and 2016 by the United Nations Educational, Scientific and Cultural Organizations (UNESCO), including the resolution’s omission of the title “Temple Mount,” using instead only the Arabic term for the site, “Haram al-Sharif.” 

China To Deploy Elite Troops To Syria To Fight Alongside Assad's Army - According to multiple reports in Middle East regional sources, China plans to send elite military units to Syria to advise and assist the Syrian Army in an attempt to root out the country's terrorist insurgency, especially Chinese Islamist foreign fighters who have shown up in increasing numbers in Syria's north since the start of the conflict. If confirmed this won't be the first time China - one of the five veto-wielding powers of the UN Security Council - has sent assistance to the Assad government: according to previous reporting by Middle East Eye, China began quietly sending soldiers in an advisory capacity into Syria earlier this year to assist government forces in weapons systems, intelligence collection, logistics, and medicine. But this certainly marks a dramatic and more public escalation in terms of Chinese operations in the region as Beijing will reportedly send special forces to work closely with government troops, and likely in coordination with the Russians as well. Sources told the Saudi Arabia based newspaper New Khaleej that the Chinese Ministry of Defense intends to send two units known as the “Tigers of Siberia” and the “Night Tigers” - both elite special operations units - to assist the Syrian government's fight against the jihadist insurgency. The news follows a high level meeting last week in China between Syrian Presidential Advisor Bouthaina Shaaban and Chinese Chinese Foreign Minister Wang Yi, who praised Damascus' efforts in fighting foreign militants from the East Turkistan Islamic Movement (ETIM, also commonly called the Turkestan Islamic Party, or TIP). The Muslim separatist group was founded by ethnic Uighurs and is based in the Xinjiang province of northwest China.

Militants Who Killed Over 300 At Egypt Mosque Brandished ISIS Flags -- Yesterday, Egypt suffered its worst mass killing since at least 2013 – a massacre that was ironically carried out by the country’s security forces – when five armed gunmen stormed a mosque in northern Sinai and killed more than 300 people, including at least two dozen children.And while no group has stepped up to take responsibility for the murderous rampage,Reuters reported that the attackers brandished an Islamic State flag, according to witness accounts. Prosecutors are already investigating the group.Egyptian forces are battling a stubborn Islamic State affiliate in the region, one of the surviving branches of the militant group after it suffered defeats by US-backed forces in Iraq and Syria.The assault on the mosque has stunned Egyptians, prompting President Abdel Fattah al-Sisi’s government to tighten security at places of worship and key buildings, and call three days of mourning for the bloodiest attack in Egypt’s modern history. The official death toll rose to 305 Saturday, including 27 children, and 128 people were injured.Egypt’s public prosecutor’s office, citing interviews with wounded survivors as part of its investigation, linked Islamic State militants, also known as Daesh, to the attack on the Al Rawdah mosque in Bir al-Abed, west of El-Arish city.“The worshippers were taken by surprise by these elements,” the prosecutor said in a statement. “They numbered between 25 and 30, carrying the Daesh flag and took up positions in front of the mosque door and its 12 windows with automatic rifles."Witnesses described a scene of unparalleled brutality, amplified by the notion that the attackers escaped before authorities could respond.The gunmen, some wearing masks and military-style uniforms, had arrived in jeeps, surrounded the mosque and opened fire inside, sending panicked worshippers scrambling over each other to escape the carnage. Witnesses had said gunmen set off a bomb at the end of Friday prayers and then opened fire as people tried to flee, shooting at ambulances and setting fire to cars to block roads. Images on state media showed bloodied victims and bodies covered in blankets inside the mosque.

Strong Evidence that U.S. Special Operations Forces Massacred Civilians in Somalia —It was around five in the morning when Abdullahi Elmi heard the gunfire. Sitting in his small home in Bariire, in southern Somalia, the farm administrator had been recording the names of the laborers who had worked the day before. Stacks of accounting books sprawled on the floor around him. Across the room, his wife sat with their 3-year-old son who dozed as his mother rocked him back and forth in her arms. When the sound of gunshots began, Abdullahi thought they were too far away to be heading toward his farm. But within seconds they seemed to grow louder, and closer, sending Abdullahi and his wife, carrying their young son, sprinting through the nearby forest of banana trees in search of safety. “They told my wife to go back in our home and then they went inside to search. I was pleading with them not to take anything.” When the soldiers finished their search, they ordered the men to move with them toward the scene of the shooting. There Abdullahi and Goomey saw their fellow farmers’ bodies sprawled across the ground. The small pot that one of them had been using to make tea still stood upright near the corpses. And they also saw what they later estimated to be around 20 American soldiers standing around the bodies. A Somali National Army soldier who was at the scene estimated 10 to 12 Americans were there. Abdullahi felt his chest tighten as he heard his friend, Ali-waay, calling for help, blood from a gunshot wound pouring into the earth around him. One of the Somali soldiers ordered Abdullahi to put his head on the ground. The bottom of a boot belonging to an American soldier kept it there. THE U.S.-LED OPERATION on Aug. 25 would result in the death of 10 civilians, including at least one child, and become the largest stain on U.S. ground operations in the country since the infamous Black Hawk Down incident in 1993. In the operation’s aftermath, hundreds of people in the nearby town Afgoye flooded the city’s streets demanding justice for those killed, and survivors on the farm refused to bury their dead until the Somali government recanted its allegations that they were members Al Shabaab, and offered an apology.

B-52s Are Dropping Hundreds of Dumb Bombs in Afghanistan to Literally Shape the Terrain --The bombers, along with F-16s and drones, are blasting mountains and other cover to force the Taliban into the open.    According to the public affairs official, the very first of these missions in support of the U.S. military’s Operation Freedom’s Sentinel occurred in June 2016 and involved F-16C Viper multi-role fighter jets. Since then, F-16s, B-52s, and even MQ-9 Reaper drones, have flown terrain denial sorties. Though the unguided Mk 82 remains the weapon of choice for this task, aircraft have dropped a variety of laser- and GPS-guided munitions, as well. These include 500-pound class GBU-12/B Paveways, GBU-38/B Joint Direct Attack Munitions (JDAM), and GBU-54/B Laser JDAMs, and 2,000 pound class GBU-31/B JDAMs. The B-52s with their cavernous bomb bays definitely have an outsized capability in this regard. Since July 2016, B-52s have flown more than 225 strikes over Afghanistan and dropped approximately 1,050 munitions of all types, including standard Mk 82s, during area denial missions specifically, according to AFCENT. Until November 2017, the lumbering bombers at Al Udeid were not even able to carry precision guided weapons internally, limited instead to lugging a maximum of 18 of those munitions on external pylons. The revelation about area denial strikes thus helps explain earlier, conflicting reports about the BUFFs flying with as many as 30 bombs on individual sorties. This is, of course, hardly the first time the United States has employed these tactics. From World War II through Desert Storm, the U.S. military employed carpet bombing, in which aircraft, especially heavy bombers, dropped strings of unguided bombs across wide areas. During the Vietnam War, the American aircraft famously did this repeatedly over the Ho Chi Minh Trail that snaked from North Vietnam south through Laos. The United States also saturated the area with small landmines, irritating chemicals, and even a powder that was supposed to create permanent, made-made “mud” to slow down enemy personnel and vehicles. More infamously, the U.S. military sprayed copious amounts of toxic herbicides, including a mixture called Agent Orange, to deny cover to insurgent forces. Early in the U.S. military’s campaign against the Taliban and Al Qaeda in Afghanistan, B-52s famously flew similar missions to bombard enemy positions in a mountainous part of the country near the Pakistani border known as Tora Bora. That campaign ultimately failed to keep key leaders, such as Osama Bin Laden, from escaping into Pakistan. 

US putting off planned ban on its use of cluster bombs - AP - The Pentagon has put off indefinitely a planned ban on using certain cluster bombs, which release explosive sub-munitions, or bomblets. The U.S. military considers them a legitimate and important weapon, although critics say they kill indiscriminately and pose hazards to civilians. A 2010 international treaty outlaws the use of cluster bombs, but the U.S. is not a signatory.  The George W. Bush administration declared in 2008 that after Jan. 1, 2019 the United States would continue its use of cluster bombs only if they met a performance standard of failing to detonate 1 percent or less of the time. That standard is important because armed and unexploded cluster munitions left on the battlefield pose a long-term hazard to civilians. Tom Crosson, a Pentagon spokesman, said that despite efforts to develop more reliable, and thus safer, cluster munitions, the U.S. military has been unable to produce bombs with failure rates of 1 percent or less. He said it's unclear how long it might take to achieve that standard, and thus the Pentagon concluded in a months-long policy review that it should set aside the 2019 deadline and allow commanders to authorize the use of the weapons when they deem it necessary.

North Korea says nuclear push completed as missile test puts entire U.S. within striking distance -- North Korea announced Wednesday that it had completed its goal of becoming a nuclear state after test-firing a powerful new intercontinental ballistic missile that it said puts the entire United States within striking distance. The fresh challenge to the U.S. and Japan saw the North launch what was apparently its longest-range missile to date after a hiatus of 10 weeks, injecting new uncertainty into the nuclear crisis on the Korean Peninsula. In a special televised announcement, North Korea said it had “successfully carried out” a launch of the newly developed Hwasong-15 ICBM, which it said is “capable of striking the whole mainland of the U.S.” It said the missile had soared to an altitude of 4,475 km, flying a distance of 950 km. In a government statement run by state media, the North said that leader Kim Jong Un had observed the launch, calling it the culmination of the country’s nuclear weapons program. “After watching the successful launch of the new type ICBM Hwasong-15, Kim Jong Un declared with pride that now we have finally realized the great historic cause of completing the state nuclear force, the cause of building a rocket power,” the official Korean Central News Agency said. The North also lashed out at what it said was Washington’s “nuclear blackmail policy” and pointedly claimed that its own nuclear weapons program is not a threat to its neighbors.

Beijing condemns latest missile test that analysts say may give Pyongyang more negotiating power - SCMP - North Korea declared on Wednesday it had completed its mission to be a nuclear force as it successfully tested a powerful new intercontinental ballistic missile that can strike the “whole mainland of the United States”, sparking condemnation across the region. Beijing said it was “gravely concerned” about the Hwasong-15 missile test, which analysts say shows Pyongyang is close to achieving real nuclear capability and gives the reclusive regime more negotiating power with Washington. Chinese Foreign Ministry spokesman Geng Shuang said China opposed the launch and called on North Korea to refrain from further provocations. “We hope that all relevant parties could help promote dialogue to resolve the issue,” Geng said in a press briefing on Wednesday. The missile test came a week after US President Donald Trump put North Korea back on a list of countries that support terrorism, paving the way for Washington to impose more sanctions. It was the highest and longest any North Korean missile had flown, landing in the sea near Japan. “After watching the successful launch of the new type ICBM Hwasong-15, Kim Jong-un declared with pride that now we have finally realised the great historic cause of completing the state nuclear force, the cause of building a rocket power,” according to a statement read on North Korea’s state-run television. The missile reached an altitude of around 4,475km and flew 950km during its 53-minute flight. The Hwasong-15 was a more advanced version of an ICBM tested twice in July, North Korea said. It was designed to carry a “super-large heavy warhead”. The US-based Union of Concerned Scientists said the missile would have a range of more than 13,000km – meaning it could reach Washington and the rest of the United States.  

The New Hwasong-15 ICBM: A Significant Improvement That May be Ready as Early as 2018 - Photographs and video released by North Korea reveal that the Hwasong-15 test fired on November 29 is not a modified version of the Hwasong-14, as initially assessed here based solely on flight data. The Hwasong-15 is considerably larger than the Hwasong-14, and initial calculations indicate the new missile could deliver a moderately-sized nuclear weapon to any city on the US mainland. The Hwasong-15 is also large and powerful enough to carry simple decoys or other countermeasures designed to challenge America’s existing national missile defense (NMD) system. A handful of additional flight tests are needed to validate the Hwasong-15’s performance and reliability, and likely establish the efficacy of a protection system needed to ensure the warhead survives the rigors of atmospheric re-entry.The Hwasong-15 is a two-stage, liquid-fueled ICBM. Photographs of the Hwasong-15 reveal that its first stage is powered by a pair of engines that share the same external features found on the single chamber engine used by the Hwasong-14. The two-chamber configuration found on the Hwasong-15 is very similar to the original design of the RD-251 engine block developed and produced in the former Soviet Union, suggesting that the total thrust generated at lift-off is about 80-tons force. This is reasonably consistent with the estimated mass of the new missile, which is between 40 and 50 metric tons. The configuration of the second stage is not known, though its overall size suggests it contains 50 percent more propellant than the Hwasong-14. Taken together, and applying conservative assumptions about the second-stage propulsion system, it now appears that the Hwasong-15 can deliver a 1,000-kg payload to any point on the US mainland. North Korea has almost certainly developed a nuclear warhead that weighs less than 700 kg, if not one considerably lighter. The missile also features a new steering mechanism that is more efficient and simpler than the methods used in North Korea’s other missiles. North Korea’s older, Scud-based missiles employed jet vanes for steering during the boost phase. The Hwasong-12 and -14 used four small engines mounted in parallel to the main thrust chamber for missile control during first stage operations. North Korean engineers have mounted each of the main engines of the Hwasong-15 on a slotted gimbal that allows each to be reoriented in one dimension to control the direction of the exhaust gases to provide control. 

There’s a surprisingly mundane reason North Korea didn’t launch a missile for 74 days -- North Korea's need to feed its people is likely the reason behind the regime going nearly two and a half months without a missile launch. In a country plagued by food shortages, North Korea may reroute its limited resources — including fuel and military personnel — in autumn to take full advantage of the harvest season. While some pundits thought North Korea's quiet launch schedule in October and November might indicate its willingness to calm tensions in the interest of potential diplomatic overtures, experts think it is part of a larger pattern. Since 2011, when Kim Jong Un came to power, only five of North Korea's 86 missile launches have occurred between October and December. Shea Cotton, a North Korean missile expert at the James Martin Center for Nonproliferation Studies, told Business Insider he believes the lull is due to the harvest season because it "coincides with the slowdown we usually observe" and also requires large amounts of resources. "Naturally we can’t say for sure why we see this, the harvest just appears to be the best candidate right now. I’m not suggesting exactly that North Korea sends its rocket scientists out into the field to swing a scythe, more that it takes a lot of resources to gather up all the crops, just as it takes a lot of resources to move everything into place to do a missile test."

Between Sanctions, Drought and Tensions: How Bad is North Korea’s Food Situation? --  International sanctions on North Korea appear to be biting North Korea’s civilian economy more than in the past, arousing concerns that the country’s historically precarious food supply, which has also been adversely affected by dry weather this spring, is in jeopardy. However, the context matters. Food production in North Korea has grown remarkably over the past few years, so even if food production declines a bit, it may not be disastrous. Moreover, estimates by UN agencies, which are generally regarded as authoritative, tend to overstate how much food distribution by the state really matters. According to data from one 2017 book, based on survey studies on North Korean refugees in South Korea from several different years, about 60 percent of the North Korean public relies on private markets for purchasing food, while over 14 percent grow most of their food themselves; only 22.6 percent cite the public distribution system and other official channels as their primary sources of food.[1] Market spaces have grown consistently in the 2000s, as satellite imagery has shown.[2]    Overall, things do not seem to be out of the ordinary, at least not yet. The last observation by Daily NK, on October 24, shows the rice price continued to decline, as has been the case since earlier in October. Current market prices fall well within the range of what has been normal over the past few years. Since 2014, market prices for rice have tended to fluctuate between 4,000 and 6,000 won per kg. From the second half of 2015, prices stabilized further, ranging between 5,000 and 6,000 per kg, with only a few exceptions. The past few years are historically remarkable for their relative price stability. The following graph shows the average rice prices for three North Korean cities from late December 2012, when prices stabilized at their current levels, until late October 2017.

China’s debt pile growing fast despite years of efforts to contain it (Reuters) - For years China’s top officials have touted their ambitious policy priority to wean the world’s second-largest economy off high levels of debt, but there is not much to show for it. On the contrary, a Reuters analysis shows the debt pile at Chinese firms has been climbing in that time, with levels at the end of September growing at the fastest pace in four years. The build-up has continued even as policymakers roll out a series of measures to end the explosive growth of debt, including persuading state firms and local governments to prune borrowing and tighter rules and monitoring of banks’ short-term borrowing. By some estimates, China’s overall debt is now as much as three times the size of its economy. Without a comprehensive strategy to tackle the overhang, there is a growing risk China will have a banking crisis or sharply slower growth or both, the International Monetary Fund said last year. China’s central bank governor, Zhou Xiaochuan, made global headlines with a warning last month of the risks of a “Minsky moment”, referring to a sudden collapse in asset prices after long periods of growth, sparked by debt or currency pressures. On the sidelines of a key, twice-a-decade Communist Party Congress in October, Zhou referred to relatively high corporate debt and the fast pace of growth in household lending. While also pledging to fend off such risks, Zhou has acknowledged it will take some time to bring debt down to more manageable lvels. Reuters analysis of 2,146 China listed firms showed their total debt at the end of September jumped 23 percent from a year ago, the highest pace of growth since 2013. The analysis covered three-fifths of the country’s listed firms, but excluded financials, which have seen the brunt of government de-risking and deleveraging efforts so far. The analysis revealed that debt in the real estate sector multiplied the most over last five years, followed by industrials.

Japan plans extra budget of $24-26 billion for fiscal 2017: sources (Reuters) - Japan’s government is set to compile an extra budget worth around 2.7-2.9 trillion yen ($24-26 billion) for the fiscal year to March 2018, with additional bond issuance of around 1 trillion yen to help fund the spending, government sources told Reuters. In addition to construction bond issuance worth around 1 trillion yen, the government will scrape together cash reserves from the previous fiscal year’s budget and money left unused from debt servicing due to lower-than-estimated borrowing costs, the sources said. No deficit-covering bond issuance was planned, the sources said on condition of anonymity because the plan has not yet been finalised. Following October’s big election win, Prime Minister Shinzo Abe’s cabinet has made plans to beef up childcare support, boost productivity at small and medium-sized companies, and strengthen competitiveness of the farm, fishery and forestry industries.

Thousands of people are dying home alone in Japan, rotting for weeks before they’re found | South China Morning Post: The stench of flesh rotting on a sultry day fills the air as cleaner Hidemitsu Ohshima steps into a tiny Tokyo flat where a dead man lay decomposing for three weeks. The man, believed to be in his 50s, died alone in a city he shared with tens of millions of other people but no one noticed, making him the latest victim of “Kodokushi” or “dying alone” – a growing trend in ageing Japan. Decked out in a white protective suit complete with rubber gloves, Ohshima lifts up a futon mattress soaked with the dead man’s bodily fluids, only to uncover a writhing mass of maggots and black bugs. “Ugh, this is serious,” he says. “You wear protective suits to defend yourself from bugs that may or may not be carrying diseases.” Kodokushi is a growing problem in Japan, where 27.7 per cent of the population is aged over 65 and many people are giving up trying to find partners in middle age, opting instead for a solitary existence. Experts say a combination of uniquely Japanese cultural, social and demographic factors have compounded the problem. There are no official figures for the number of people dying alone who stay unnoticed for days and weeks but most experts estimate it at 30,000 per year.

How Long Can India’s Farmers Subsidise the Nation? - Farmers are coming onto the streets across the country – in Maharashtra, Madhya Pradesh, Rajasthan, Telangana, Tamil Nadu, Punjab and now from all states into Delhi. As the agitations intensify and take a national character, it is necessary for the nation to understand what is driving them. Are they asking for the sky, simply for what is due to them?   Take Ravindra Kumar, a bajra farmer from Rewari, Haryana. He produced a good crop of bajra of 20 quintals. As per the government’s own estimates, the cost of production is Rs 1,278 per quintal. The government announced a minimum support price (MSP) of Rs 1,425 per quintal. This means that a two-and-a-half acre farmer growing 20 quintals would get a net income of only Rs 2,940 for a whole season’s effort. From this, the government expects him to support an entire household’s expenses for at least half a year. The story only gets worse. When he sold his crop in early November, Ravindra got a price of only Rs 1,138 per quintal. Not only is this much lower than the government’s MSP, it is also lower than the cost of production. So he has a net loss of Rs 2,800 to show for his efforts. If you think this is outrageous, you are right. What is more outrageous is that the scenario is similar for most crops across the country. Lalithamma, a groundnut farmer from Anantapur, had to sell 31 quintals of groundnut at a price of Rs 2,600 per quintal, while the MSP is Rs 4,450 and the official cost of production is Rs 4,089. This meant a net loss of Rs 46,159. Any wonder that Anantapur is one of the districts with the largest number of farmers’ suicides? What has been termed by the farmers’ movements as kisan ki loot (loot of the farmer) is happening at two levels. For many crops, the farmers are not even able to get the MSP announced by the government, which should really be the floor price. In just the current season, the loss due to the gap between MSP and actual price is estimated to be about Rs 36,000 crore for farmers across India. 

The Indian telecom regulator’s net neutrality recommendations may be the strongest in the world - Even as the United States gets set to roll back laws protecting net neutrality, India’s telecom regulator on Tuesday released comprehensive recommendations that experts say signal a clear commitment to the principle of neutrality and could count as some of the strongest regulations in the world.Net neutrality is the idea that internet service providers must treat all data on the internet equally, which means they cannot choose to speed up or slow down a particular service or charge different rates for different kinds of data. After spending the last year and a half in consultation, the Telecom Regulatory Authority of India has come up with stringent rules that would prevent internet service providers from providing “fast lanes” for certain kinds of data, force them to be transparent about data management, and set up a committee to detect net neutrality violations. These come close to two years after Facebook’s Free Basics service – which provided a scaled down version of some websites for free – sparked a nationwide campaign to protect net neutrality and consequently had to exit India.  The Department of Telecommunications is expected to rely on the regulator’s recommendations when it forms official rules on net neutrality.

India Considers a Leading Role in De-Centralised British Commonwealth - The Wire -- Britain is discussing with Narendra Modi’s government how India how could play a leading role in revamping the Commonwealth when the international organisation of 52 countries holds its summit in London next April. One idea being considered is that administration of the grouping should be de-centralised with specific subjects being run from other countries, breaking the ponderous grip of the imperial style Marlborough House headquarters in London near the royal family’s homes of St. James’s Palace and Buckingham Palace.  Prime Minister Narendra Modi is believed to be interested in India taking on the larger role – and maybe responsibility for trade and investment. He discussed this with Prince Charles when the heir to the British throne visited Delhi on November 8 and 9 at the end of a ten-day tour that included Singapore, Brunei and Malaysia.Prince Charles had been invited to Delhi by Modi, and the agenda for their talks included plans for what is traditionally called the Commonwealth Heads of Government Meeting (CHOGM). Prince Charles said later that he had told Mr Modi, “As the world’s largest democracy, India’s role in all of this could not be more crucial nor her contribution to the Commonwealth more essential.”  He also followed up on a formal invitation for Modi to attend the summit that had been sent to Delhi by his mother, the Queen. Although India has not yet formally replied, Modi will accept, combining that with a formal bilateral visit to Britain that will add substance to his trip. Britain has for several months been urging India, which has 55% of the Commonwealth’s 2.3 billion population and 26% of its internal trade, to abandon its historic lack of interest in what is formally called the Commonwealth of Nations (without the word British) and help revitalise the grouping.

US, Japan, India, Australia … is Quad the first step to an Asian Nato? - IT is no longer the “Asia-Pacific”, but the “Indo-Pacific”, at least, according to the United States and some of its allies. Such a change may not seem much on first glance, but these four letters are far more than a matter of semantics: they have the potential to create a seismic shift in the geopolitical landscape of the region. This much was evidenced when the US, Japan, Australia and India announced this month they had agreed to create a coalition that would patrol and exert influence on waterways from the Indian Ocean to the Pacific to the (much disputed) East and South China Seas. The grouping of the four “like-minded” democracies – known as the Quadrilateral Security Dialogue or Quad – was first mooted by Japanese Prime Minister Shinzo Abe in 2007, but the idea was dropped after Beijing protested, saying the defence partnership with India was aimed at stifling China’s growth. It made a sudden comeback when senior officials from the four nations met in Manila on November 11 – on the sidelines of regional summits during US President Donald Trump’s maiden tour to East Asia. Obviously, the group will have a China-centric security agenda. The Quad’s rebirth highlights the growing suspicion and unease diplomats in Washington, Tokyo, Canberra and New Delhi feel about China’s meteoric military and economic rise. In a statement after the meeting, the four nations said they were committed to ensuring a “free and open” region, with “respect for international law”, and “the rules-based order in the Indo-Pacific”, a reference to what they see as China’s flouting of territorial, maritime and trade rules – including Beijing’s rejection of an international tribunal’s ruling against it regarding its South China Sea dispute with the Philippines. 

Myanmar accused of wiping out secret network of Rohingya reporters - Reporters working inside Myanmar’s Rakhine state to document atrocities against Rohingya have gone missing, raising fears that they have been deliberately targeted by the military. Young Rohingya volunteers had been secretly reporting on persecution of the Muslim minority in Myanmar since 2012, sending photos, videos and audio clips out of the country using smartphones. Human rights groups claim the Myanmar military have killed and abducted many of the reporters to “sabotage” the networks and that there is now very little reporting on what is happening in the closed state of Rakhine.  The Rohingya are Muslims who live in majority-Buddhist Myanmar. They are often described as "the world's most persecuted minority".  Nearly all of Myanmar's 1.1 million Rohingya live in the western coastal state of Rakhine. The government does not recognise them as citizens, effectively rendering them stateless. In 2012, deadly clashes with Buddhists in Rakhine caused 140,000 Rohingya to flee their homes. Many have since paid people smugglers to take them on dangerous sea voyages to Thailand, Malaysia and Indonesia, where they are often exploited.Extremist nationalist movements insist the group are illegal immigrants from Bangladesh, although the Rohingya say they are native to Rakhine state. Rights groups accuse Myanmar authorities of ethnic cleansing, systematically forcing Rohingya from the country through violence and persecution, a charge the government has denied.

 US Coast Guard Operates Secret Floating Prisons In Pacific Ocean -Last week, Seth Wessler wrote a story for the New York Times, in which he described “terror on the high seas”: an expansion of the maritime war on drugs, the U.S. Coast Guard is operating a fleet of secret floating prisions in the Pacific Ocean. Coined “floating Guantanamos”, Coast Guard cutters have been deployed as far as 3,000 miles miles away from the nearest U.S. port, to international waters from Central America to South America in a bid to bust drug smugglers.Wessler writes about a number of men who were detained by the U.S. Coast Guard and imprisoned on the cutters for weeks or months at a time. The practice of capturing smugglers and turning them back to their governments changed in 2012, when the Defense’s Southern Command, tasked with leading the war on drugs in the Americas, launched a multinational military campaign called Operation Martillo, or “hammer.” Post 2012, Coast Guard cutters cruise around the Pacific picking up smugglers who will then be admitted to U.S. courts. According to Wessler, the U.S. Coast Guard never intended to operate floating prisions, but thanks to U.S. marintime law, drug smuggling in international waters is considered a crime against the U.S (even if there is no proof), making the possibility of floating prisions legal. Once detained, conditions for the smugglers are quite rough, often kept on US vessels for weeks or months on end– chained to anything, usually on the ships’ decks exposed to the bare elements.

Crunch looms as house correction puts some Canadians under water (Reuters) - A drop in Canadian home prices has put some recent buyers under water, particularly in Toronto, the nation’s largest market, just as rising interest rates and record levels of household debt have put the squeeze on borrowers. With homeowners’ equity falling in tandem with a 15 percent drop in the average Toronto house price since April, and lenders tightening credit in response to tougher regulation, the ability of people to borrow against the value of their home is shrinking. Toronto debt adviser Scott Terrio said Canada’s perennially low mortgage delinquency rate, which stood at just 0.34 percent in the fourth quarter of 2016, masks the extent of the problem. Terrio, president at DebtSavvy.ca, said a 40 percent surge in home equity lines of credit since 2011 has helped mask a credit crisis created by consumers who tap their home equity to pay their bills. “The insolvency business is cyclical, and the last five-year peak was in 2009,” said Terrio. “We’re now into the eighth year of a 5-year cycle because of people’s equity in their homes and low interest rates.” Outstanding home equity line of credit (HELOC) balances reached a record C$211 billion ($166 billion) in 2016, according to the Financial Consumer Agency of Canada. Toronto benchmark home prices, which remove the distortion caused by expensive houses, are down about 8 percent since their April peak, according to the Canadian Real Estate Association’s House Price Index. While the long housing boom is finally cooling, interest rates are rising and mortgage credit is tightening. Lenders that once extended HELOCs no longer are. 

Global manufacturing activity is at its highest in more than six years - After years of industrial decline in the world’s advanced economies, manufacturing is now experiencing a solid revival. The global manufacturing purchasing managers’ index (PMI), a measurement of the sector’s health, rose to 54 in November, up from 53.5 the previous month, and the highest reading since March 2011. Readings above 50 signal expansion. Factories around the world recorded the highest levels of output, new orders, and employment in years, according to data from a JPMorgan and IHS Markit report published today. An improvement in the global economy and unexpected increase in global trade is helping drive industrial growth. That should hopefully increase domestic demand and further boost economic growth. There are also signs of inflation returning as input prices and output charges accelerated above the long-run average. This jump in manufacturing is increasingly coming from the world’s developed markets. The euro zone’s PMI was near a record high at 60.1, a reading that has only once been higher, in 2000. Manufacturing activity in the UK was also the highest in more than four years, while Japan’s was the highest since early 2014. Even though the US PMI reading was slightly lower than in October, the country is still on course to have its best quarter since early 2015. Meanwhile, China’s PMI fell to a five-month low as the nation reported job losses in the sector.

Russia says it will ignore any UN ban of killer robots -- Russian diplomats delivered a message for those who want to ban killer robots: Russia will build them no matter what. That is the sum total of what happened during a week of discussion on the issue of weapons and vehicles operated by artificial intelligence in Geneva.  According to a report by DefenseOne.com, a statement by the Russian government on Nov. 10 laid out a very hard-line position against the ban on what the United Nations is calling “lethal autonomous weapon systems,” or LAWS.  “According to the Russian Federation, the lack of working samples of such weapons systems remains the main problem in the discussion on LAWS,” the statement said.  “Certainly, there are precedents of reaching international agreements that establish a preventive ban on prospective types of weapons. However, this can hardly be considered as an argument for taking preventive prohibitive or restrictive measures against LAWS being a by far more complex and wide class of weapons of which the current understanding of humankind is rather approximate.”   The Russians also claimed that there was a risk of harming civilian artificial intelligence capabilities, saying, “It is hardly acceptable for the work on LAWS to restrict the freedom to enjoy the benefits of autonomous technologies being the future of humankind.”  The Russian hard line comes as questions percolate about Russian compliance with other arms control treaties. Russia has already been accused of violating the 1987 Intermediate Nuclear Forces Treaty, prompting the United States to begin development of a new ground-launched cruise missile.

Germany’s Voice Suddenly Missing in Brussels - Der Speigel - European Union Budget Commissioner Günther Oettinger wanted to know what is going on in Germany. To find out, he set up a number of meetings in Berlin this week, including one in the Chancellery. He also arranged to chat with Christian Lindner, the head of the Free Democrats (FDP) and the man who unexpectedly turned his back on German coalition talks in Berlin last Sunday night.The reason for Oettinger's interest in the political developments in Germany is simple. He has been assigned with writing a draft EU budget for the next 10 years and his due date is next May. He is currently traveling from capital to capital on the Continent to determine how member states envision EU spending for the period from 2018 to 2027. But the German voice, which generally carries significant weight when it comes to budgetary questions,is silent these days. "The long process of assembling a government is weakening Germany's influence in Brussels," says Oettinger. "German influence on important issues is currently undiscernible." The failure of German coalition negotiations in Berlin has caught the European Union completely off guard. Ahead of elections in France and the Netherlands earlier this year, there had been widespread concern about the rise of the right wing and potential difficulties when it came to assembling a governing coalition in those countries. Few such concerns were voiced ahead of Germany's general election on Sept. 24. Everyone assumed that Germany was solid. Now, though, French President Emmanuel Macron has taken center stage in the EU with his ambitious reform proposals while European Council President Donald Tusk has already come up with a detailed timeline for transforming Macron's vision into concrete policy decisions. And suddenly, Germany has vanished. "You're ruining our entire presidency," complained Kaja Tael, Estonia's permanent representative in Brussels. Estonia currently holds the EU's rotating presidency.

ECB Sticks With Bad-Loan Plan Thrust Amid Italian Opposition - The European Central Bank is sticking to the substance of its plan to toughen bad-loan rules for euro-area banks even as it makes some adjustments in response to a barrage of criticism from Rome and Brussels, according to people with knowledge of the matter. The ECB was accused of overreach in its recent proposal to hold banks to firm deadlines for writing down loans that turn sour. Daniele Nouy, the central bank’s head of supervision, has said that the wording of the plan will be improved and some concessions could be made. But the core of the plan will remain in place, the people said, asking not to be identified because the deliberations are private. The draft guidance requires banks to provision fully for loans that turn sour from the start of next year, with a two year deadline for unsecured nonperforming debt and seven years for secured. Many of the 19 countries represented on the ECB Supervisory Board support a similar approach to existing bad debt, though they’re mindful of the potential economic damage that could result from forcing banks into rapid writedowns, the people said. Nicolas Veron, a senior fellow at Brussels-based think tank Bruegel, said that despite the criticism, the ECB’s supervisory actions on nonperforming loans “will be largely aligned with the initial proposal, and that’s good.” He also said the ECB needs to work on its communication skills. “On individual banks, they must give those wooden answers, but on policy issues it’s a bit different,” Veron said. “They should engage, they should consult, they should know their audience. They shouldn’t be surprised by such a reaction.” 

Euro Area Inflation Unexpectedly Misses Despite Sliding Unemployment - The euro stumbled, dropping to session lows on Thursday after Eurostat reported that despite a welcome decline in Europe's unemployment rate to 8.8%, the lowest level in 9 years, Eurozone inflation missed expectations, rising from 1.4% to 1.5%, below the 1.6% consensus expectations, reminding the ECB that Phillips curves around the globe remain broken and that its intention to taper QE and tighten monetary policy may yet be derailed. Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in November (4.7%, compared with 3.0% in October), followed by food, alcohol & tobacco (2.2%, compared with 2.3% in October), services (1.2%, stable compared with October) and non-energy industrial goods (0.4%, stable compared with October). European core inflation (excluding food, energy and tobacco) remained unchanged at 0.9% in November, below the 1% median estimate by economists. The euro traded lower after the report, and was at $1.1829 at 11:44 a.m in Frankfurt. Indeed, as Bloomberg reports, the latest price data "outline the dilemma facing the ECB." and even with the region’s economy set for the fastest growth in a decade and the most broad-based expansion since 1997, a sustained price recovery remains some way off. While policy makers have acknowledged that this development warrants less additional monetary support, ECB President Mario Draghi has advocated a “patient and persistent” approach to exiting the central bank’s stimulus program.

Pew Research Center Says EU Muslim Population Could Triple By 2050 -- Over the past couple of years, Europe has experienced a record influx of asylum seekers fleeing conflicts in Syria and other predominantly Muslim countries. Not surprisingly, the massive wave of Muslim migrants has become a political hot topic, particularly in countries like Germany, U.K., France, Italy and Sweden which have taken in a combined total of nearly 3 million migrants over just the past couple of years.  Per the Pew Research Center (PRC):  Now, in an effort to quantify how this massive wave of immigration may transform Europe's demographics over the next several decades, the PRC has released a study estimating how the size of Europe’s Muslim population may evolve depending on future levels of migration.To start, PRC estimated that Muslims made up roughly 4.9% of Europe's overall population at the end of 2016 with Bulgaria (11.1%), France (8.8%) and Sweden (8.1%) having the highest concentrations. They then proceeded to analyze how those populations may evolve over the next ~30 years under various immigration scenarios with the highest migration estimates resulting in a tripling of Europe's overall Muslim population. The baseline for all three scenarios is the Muslim population in Europe (defined here as the 28 countries presently in the European Union, plus Norway and Switzerland) as of mid-2016, estimated at 25.8 million (4.9% of the overall population) – up from 19.5 million (3.8%) in 2010.

Brexit divorce bill to be kept secret - Theresa May has agreed with Brussels that Britain will hand over more than £40bn when the UK leaves the EU — but keep the final bill secret from the public even when the final deal is done in 2019.EU negotiators said the prime minister had provided a clear assurance to fellow leaders that her cabinet has agreed to pay more money after a crunch meeting last week — paving the way for formal talks on a new trade agreement to be approved at a summit in Brussels next month.But insiders said the assurances would mean that the specific British commitments will not be placed in writing at the meeting in December of the European Council to avoid a political row, and that the final bill may never be known either.“A deal is now doable. This is a breakthrough,” a senior EU source said. “The Brits will list categories in which they want to honour their commitments. They will present different calculations than the Commission, but for us it’s all about accepting the principle — not about having a specific figure. “The withdrawal agreement will not contain a figure — the Brits only need to indicate what, and how. Not how much. The idea that the final bill will remain a mystery will be highly controversial with Eurosceptics, who are already suspicious that the government has been too willing to hand over money before securing an advantageous trade deal in return.In further controversy, leaked documents show that the EU’s chief negotiator, Michel Barnier, wants to make a transition deal for Britain conditional on the UK’s “automatic” acceptance of new Brussels regulations during the two-year implementation phase after March 2019. The arrangement over the money means that senior figures in Brussels and London believe the issue of the Irish border is most likely to scupper the start of trade talks. Leo Varadkar, the Irish prime minister, wants a written commitment that Northern Ireland would keep “regulatory convergence” with the EU even after Brexit to avoid a hard border being created with the republic.  Officials warn that if a written guarantee is given, the EU would not be able to give the UK a trade deal unless the promise to Ireland was kept. Such a position is impossible for the government since the Democratic Unionist Party, which is propping up the Conservatives, would not tolerate the border in effect moving to the Irish Sea.

No final answer to Irish border question until ‘end state’ known, says Liam Fox -  Resolving the issue of Northern Ireland's border after leaving the European Union cannot be completed until trade talks with Brussels have progressed, Liam Fox said as Dublin warned it could veto the next stage of Brexit negotiations unless there is movement on the dispute. International Trade Secretary Dr Fox said a final position could not be reached until it was known what the "end state" of the UK-EU relationship after Brexit would be. But an Irish minister indicated trade talks could be held up unless firm guarantees on the border are given by Prime Minister Theresa May. Dublin has put fresh pressure on the Government to accept a solution which would see either the whole of the UK or just Northern Ireland remain in the single market and customs union as a deadline in the Brexit process approaches. Theresa May has been given until December 4 to come up with further proposals on issues including the border, the Brexit divorce bill and citizens' rights if European leaders are to give the green light to moving on to the next phase of negotiations covering the future trading relationship between the UK and Brussels. Dr Fox said: "We don't want there to be a hard border but the UK is going to be leaving the customs union and the single market"He told Sky News's Sunday with Niall Paterson: "We have always had exceptions for Ireland, whether it's in our voting rights, our rights of residence in the UK, we have always accepted a certain asymmetry and that will have to be part of whatever agreement we come to with the European Union but we can't come to a final answer to the Irish question until we get an idea of the end state.

The hard-won kinship between Britain and Ireland is threatened by Brexit idiocy - When people are screwing up, they tend to take their rage and frustration out on their nearest and dearest. If, as seems increasingly likely, the European Union summit on 15 December does not give the go-ahead for talks on a post-Brexit trade deal, we already know who’s going to get the blame. It will be all Ireland’s fault. The Sun this month gave the taoiseach, Leo Varadkar, fair warning, advising him to “shut your gob and grow up” and stop “disrespecting 17.4 million voters of a country whose billions stopped Ireland going bust as recently as 2010”. Boris Johnson, in Dublin, delivered a slightly more diplomatic version of the same message. The Irish should stop worrying about a hard border being reimposed on their island, trust all the lovely reassurances they have received from the British government and make the necessary declaration that “sufficient progress” has been made on the issue for substantive talks to go ahead. This is probably not going to happen. Ireland may well be plunged into calling a snap general election this week, which in itself will make any major shift in its approach to the Brexit talks before 15 December even less likely. No possible outcome of that election will weaken Irish insistence on the imperative of avoiding a hard frontier and the need for the British to come up with actual proposals about how this is to be done. To grasp the full stupidity of this situation, remember that Ireland is actually Britain’s best friend on the other side of the negotiating table. This is partly because, before the Brexit referendum, Anglo-Irish relations were warmer than at any time in the long and often bitter history of mutual entanglement. The two governments worked hand in glove on the Northern Ireland peace process and developed a genuine trust. They also co-operated very closely within the European Union. But even leaving friendship aside, Ireland has an overwhelming interest in making Brexit as painless as it possibly can be. A bad Brexit will destabilise Northern Ireland and damage the Republic’s economy, in which most small and medium-size companies depend heavily on the British market.

Brexiteer SLAMS ‘myth’ of Irish border chaos as part of anti-Brexit ‘blackmail’ - The former secretary for Northern Ireland hit out at claims that the fate of the Irish border could spark revive old conflicts and trigger a political crisis.Speaking to BBC's Sunday Politics, Owen Paterson said the talk of a crisis surrounding the situation was a complete "myth" and amounted to "blackmail" from European leaders.He pointed out that several borders already exist between Northern Ireland and the Republic, and a post-Brexit electronic border was just a matter of will from both sides.The Tory Brexiteer responded to a report from Irish MEP Mairead McGuinness who urged Britain to stay in the single market for the sake of Ireland.Mr Paterson was baffled by this request and later branded this "absurd" since only five per cent of Northern Irish trade goes across the border. The comments came after the Irish Republic's EU commissioner said Dublin could veto Brexit trade talks if a hard border was an option after March 2019. "There is a currency border, now a euro-sterling border, there is a VAT border, an income tax border, a corporation tax border."No-one has ever said that this has been a problem. This thing is a complete myth. No-one wants a physical border, neither the North or the South."Even in the Brexit referendum campaign, we m ade it clear there are electronic measures existing that can be made to work if there is a will on both sides of the border."

Unelected Remainer peers are the REAL THREAT to the Brexit process -- After months of unrelenting turmoil, a sense that life is looking up at last has engulfed Theresa May’s Government. The Prime Minister, who has had little to cheer since April when she called this year’s snap election, has experienced a rare bout of good fortune in recent days. Her Chancellor Philip Hammond avoided an expected Budget calamity and delivered a financial package that pepped up her backbench troops. A threatened Tory rebellion over her EU Withdrawal Bill appears to be fizzling out. And in the EU negotiations, the usually bellicose European Commission president Jean-Claude Juncker has conceded “the worst is behind us”. Among Tory MPs, forecasts for Mrs May’s political longevity are lengthening as fears of a party split subside. Yet the Prime Minister will be aware that she cannot kick off her kitten heels and relax. Insiders are warning that efforts to sabotage her Brexit plans by stealth are gathering pace. Eurosceptic ministers complain that battles with senior civil servants fighting a rearguard action against the exit from the EU are dominating the day-to-day work of the Government. “It is happening across every Whitehall department,” one ministerial source told me. “There are some in the Civil Service who are convinced they can drag out the Brexit process as long as possible in the hope that the whole thing will collapse.”   According to insiders, civil servants are taking too long to deliver reports on Brexit-related issues requested by ministers and other instructions are getting lost in the Whitehall chain of command. “The whole machinery of Government needs to be overhauled. It is just not fit for Brexit,” the ministerial source said. 

David Davis could be in contempt of parliament over Brexit studies - David Davis has been told he could be in contempt of parliament after his department heavily edited government analyses on the impact of Brexit on 58 industrial sectors before handing them to a select committee.Opposition MPs accused the Brexit secretary of leaving out “politically embarrassing” information after he refused to include anything deemed to be market sensitive or that he said could damage the UK’s negotiations with the EU27.Davis said he was withholding the information because he had “received no assurances from the [Brexit] committee regarding how any information passed will be used”. But that triggered a furious reaction from MPs on the Brexit select committee who were supposed to be handed over the reports after a unanimous and binding vote of MPs. One option, they said, is to trigger contempt proceedings against the cabinet minister. They will meet with their chair, Hilary Benn, to discuss whether the release is acceptable on Tuesday morning. Seema Malhotra, a Labour MP and member of the committee who has spearheaded a drive to obtain the information, said publishing material that had been edited was “against the spirit and the letter of parliament’s motion”. “It seems like the government has already decided what should and should not be seen by editing them before sending the impact studies to the select committee,” she said.

Brexit: UK divorce bill offer 'worth up to 55bn euros' - BBC News: The UK has offered a larger potential "divorce bill" to the EU - which could be worth between 40bn and 55bn euros (£35bn-£49bn), the BBC understands. BBC political editor Laura Kuenssberg said the offer was communicated to Brussels after last week's crucial cabinet meeting. There has been no final agreement on a number but the larger offer was given a "broad welcome" by Brussels, she said. No 10 has played down reports agreement has already been reached. The amount of money the UK will pay as part of Brexit has been one of the main sticking points in the first round of negotiations with the EU. In September Theresa May suggested the UK was willing to pay about 20bn euros, and the EU has been calling for its offer to be increased. The UK is hoping to move on to talking about trade but the EU will only do this when it deems "sufficient progress" has been made on three areas - the so-called divorce bill, the rights of EU citizens in the UK after Brexit and the Irish border.The EU says the UK needs to settle its accounts before it leaves. It says the UK has made financial commitments that have to be settled as part of an overall withdrawal agreement. The UK accepts that it has some obligations. And it has promised not to leave any other country out of pocket in the current EU budget period from 2014-20. But the devil is in the detail. There are also issues like pensions for EU staff, and how the UK's contribution to these is calculated for years to come, and the question of what happens to building projects that had funding agreed by all EU members including the UK but which will only begin construction after the UK has left. Large amounts of the EU's budget are spent in two areas - agriculture and fisheries, and development of poorer areas. Projects include business start-ups, roads and railways, education and health programmes and many others. 

Theresa May Capitulates on Brexit Settlement, Agrees to Pay Full Liabilities; What Will Brexit Ultras Do? -  Yves Smith - The Government appears finally to be recognizing how weak its Brexit bargaining position is and how desperately it needs to avoid a “no deal” outcome. According to the Financial Times, Theresa May’s emissary Olly Robbins capitulated to the EU’s demands on the Brexit divorce bill. That has the potential to resolve one of the three issues where the negotiations needed to show sufficient progress for the EU Council to agree to allow the negotiations to move on to discussing “the future relationship” meaning among other things, trade. From the Financial Times: According to several diplomats familiar with the talks, the UK would assume EU liabilities worth up to €100bn although net payments, discharged over many decades, could fall to less than half that amount.Prime minister Theresa May is expected to formally present the breakthrough offer next week as part of package deal if agreement can be reached on the other issues of citizen rights and the contentious question of the border between Northern Ireland and the Republic. Reuters got a frostier response: A British government official said they “do not recognize” this account of the talks going on ahead of a visit by Prime Minister Theresa May to Brussels this coming Monday. However, the press reports indicate that Britain has conceded (at least for negotiating purposes, as opposed to domestic messaging) to the EU’s position, that the UK had a long list of outstanding EU commitments that needed to be cash settled and the two sides needed to agree on an approach as to how to value them.  From the Independent: talks have seen the two sides’ stances begin to align over the “methodology” for calculating the settlement, with the outcome increasingly acceptable to both sides…. No figure has been explicitly agreed upon, but sources in Brussels highlighted that the EU had always been pushing for clarity on how the bill would be drawn up as opposed to an outright number. Various UK papers are headlining the net value of the UK offer, given the lower value of payments staggered out over time, as between €45 and €55 billion, consistent with the Financial Times’ summary. This is finally within hailing distance of the net figure the EU had bruited about most often, of €60 billion.  However, the noises from the EU side seem more cautious, of the “progress is being made” sort. From Politico’s daily European newsletter: A senior EU diplomat told POLITICO’s Jacopo Barigazzi that “No agreement has been presented to member states. Agreement has to be on paper, not in papers. We let the negotiators do their work and can’t comment [on] rumors.” Another senior EU diplomat said “it’s something fed to press that has not been translated yet into a negotiating position.”

Britain close to Irish border deal  -The Times - EU leaders are preparing to offer a two-year Brexit transition deal as early as January after negotiators said that they were close to a breakthrough over the Northern Ireland border. British officials tabled proposals this week to avoid a “hard border” in Ireland that could unblock the last remaining major obstacle to a deal, The Times understands. In return the EU will pledge at a summit in Brussels next month to speed up approval for a transition deal that maintains Britain’s present relationship with the EU, reassuring businesses that might otherwise begin implementing plans for a hard Brexit. Sources in Dublin said that there was “movement” on the issue and growing confidence that a deal could be reached before the summit on December 14-15. The British proposal is understood to commit the government to work towards “avoiding regulatory divergence” in Ireland after Brexit even if the rest of the UK moves away from European rules. This would involve the government devolving a package of powers to Northern Ireland to enable customs convergence with the Irish Republic on areas such as agriculture and energy. Negotiators on all sides accept that it is impossible to agree this now without a functioning executive in Northern Ireland or more detail on what kind of trade deal Britain will eventually negotiate with the EU. The progress came after Britain tabled an improved offer on the so-called Brexit divorce bill, under which it would pay the EU up to €50 billion in future liabilities “as they fall due” over the next 40 years. British officials stressed yesterday that the proposal was significantly less than previous demands and would also take account of Britain’s EU assets.

Theresa May: Brexit bill is still being negotiated - Politico - — Theresa May insisted Wednesday she is still “in negotiations” with the European Union over the U.K.’s Brexit bill. Speaking during a visit to Iraq as part of a three-day tour of the Middle East, the U.K. prime minister reiterated her pledge that “none of the EU27 would need to worry about having to pay in more or receive less,” and that the U.K. would “honor” its commitments in the current budget plan. But she would not be drawn on the specifics of a financial offer made by the British government in an attempt to unlock the stalled Brexit negotiations. Ahead of a key European Council meeting on December 14 at which leaders will decide if talks have made “sufficient progress” to move to Phase 2, a senior government minister confirmed to POLITICO that the U.K. had agreed to dramatically expand the scope of the financial commitments it is willing to cover. Although the final bill remains “guesswork,” according to the minister it has been estimated at between €45 billion and €55 billion. In an interview with Sky News, May insisted she wanted to “move in step together” to talks about trade and the future security partnership. May said negotiators were within “touching distance” of an agreement on citizens’ rights. “I think it is important that we have addressed certain issues up front, but on the financial issues we continue to negotiate on that, and also once again as the EU themselves have said, nothing is agreed until everything is agreed,” she said.

Scottish politicians to ask European court of justice if UK can stop Brexit -- The European court of justice is to be asked if the UK can stop the Brexit process unilaterally in a legal challenge being launched in Scotland by pro-European politicians. A group of four politicians from Labour, the Scottish National party and Scottish Greens wants the European court to rule on whether article 50 can be revoked by the UK on its own if voters or the Commons decide the final Brexit deal is unacceptable. The four – David Martin, a Scottish Labour MEP, Alyn Smith, an SNP MEP and Andy Wightman and Ross Greer, both Green MSPs at Holyrood – are launching a crowdfunding campaign at 10pm on Wednesday night to raise £50,000 for legal costs. They plan to ask judges in Scotland’s civil court, the court of session in Edinburgh, to agree to refer the issue to the ECJ next year in a move that will strengthen the efforts by campaigners to block Brexit after the deal is finalised. Their action began on Tuesday when their lawyers sent a formal notice to David Davis, the secretary of state for exiting the EU, and Richard Keen, the UK government’s Scottish law officer, asking them to say whether the UK government believed it could cancel article 50. They have been given 14 days to respond before their legal team, lead by Aidan O’Neill QC, seeks a judicial review at the court of session. Jo Maugham QC, who is advising the four politicians for free on behalf of the Good Law Project, said he “would bet my bottom dollar” the UK government will say article 50 can only be cancelled by all 27 other EU member states, and would oppose the judicial review. 

EU holds hard line as Brexit talks enter frenzied weekend - It’s not just Ireland.While Brexit negotiators working frantically behind closed doors were focused heavily Friday on the vexing questions around the Ireland-Northern Ireland border, EU diplomats said that other stumbling blocks remained. Despite the U.K.’s increased offer on the Brexit bill, an array of crucial details on the financial settlement remain to be worked out, and the issue of European Court of Justice jurisdiction over citizens’ rights disputes is also not resolved.As officials braced for a weekend of intense negotiations, ahead of what’s billed as a make-or-break lunch on Monday between Prime Minister Theresa May and Commission President Jean-Claude Juncker, EU diplomats said the bloc remained resolute in its demand for “sufficient progress” on all three key divorce issues before allowing talks to proceed to discussion of a transition period and the framework of a future trading relationship. “It’s too early to lower the bar,” one EU diplomat said. “Negotiations are still ongoing.”At the same time, diplomats said the delicate politics surrounding any agreement — particularly on the Ireland question — could combust at any moment, potentially obliterating hopes of a deal before the European Council summit two weeks hence. “On the political capacity to wrap things up, it is uncertain,” a senior EU diplomat said. For their part, the British are already looking to push Monday’s “absolute deadline,” as laid down by European Council President Donald Tusk as the final point at which summit conclusions could be prepared in time. “We have always said we are working towards the European Council, which is December 14,” May’s spokesman James Slack told reporters Friday.

No comments: