Dorothea Lange Butter bean vines across the porch, Negro quarter, Memphis, Tennessee 1938
Many. But we knew that. CNN, though? Really?: “The consumer really hasn’t kicked in at full speed ahead..”
The U.S. job market had its best year of gains last year since 1999, and economic activity hit a whopping 5% in the third quarter – the best quarter since 2003. Three months later, the U.S. economy is looking a little tired. It’s losing momentum in puzzling ways. Hiring is still strong, but experts are starting to scale back their growth forecasts. Federal Reserve chair Janet Yellen summed it up well in a speech Friday: “If underlying conditions had truly returned to normal, the economy should be booming.” Economists say there are two main problems: Workers’ wages aren’t growing much, if at all. As a result, Americans aren’t going out and spending much. On top of that, many foreign economies are slowing down, which puts pressure on the U.S. The question going forward is whether we’re just in a blip or a bigger shift is taking place.
“The consumer really hasn’t kicked in at full speed ahead,” says Peter Cardillo, chief market economist at Rockwell Global Capital. “We’re going through a soft patch.” With March’s jobs report out on Friday, this economic head-scratcher will be in full focus this week. The U.S. added over half a millions jobs in the first two months of this year alone. That’s a 50% increase from the same two-month stretch a year ago when the Polar Vortex had much of America in a funk. Job gains have come across the board: health care, construction, the service sector and retail businesses have all seen strong pick up. The unemployment rate is down to 5.5%, its lowest mark in seven years. It would be a full-steam story on jobs except for one thing: wage growth. Hourly wages only grew 2% in February. That’s a marginal bump up, but it’s too little for most Americans to notice the recovery’s progress. It’s also well below the Federal Reserve’s roughly 3.5% goal. [..]
People don’t go out and spend unless they feel confident about the future. There was hope that cheap gas would spur people to feel better about the economy and their pocketbooks. A gallon of gas was $3.53 a year ago. Now it’s $2.42, according to AAA. But a lot of people are still holding onto that savings. Retail sales and construction on new homes both fell in February, missing estimates. The latest numbers on manufacturing are also weaker than hoped for. All this could just be a winter slowdown, but it’s raising red flags. “Most of it was due to the inclement weather we had…I think that kept a lot of shoppers at home,” says Bernard Baumohl at the Economic Outlook Group.
That’s one big number.
Construction in Greece has suffered one of the biggest declines to have been recorded by any professional sector within just a few years, as business activity in the domain has dropped as much as 80% since 2008, a study by the Foundation for Economic and Industrial Research (IOBE) showed on Monday. It added that more than a third of the economic contraction recorded from 2008 to 2013 in Greece is associated with the drop in investment in construction. Employment in the sector more than halved within five years, from 589,000 people in 2008 to 287,000 in 2013, the study revealed.
The stupidest thing in a long while: “There is “absolutely nothing artificial” about setting the Fed rate at the equilibrium rate.”
Former Fed Chairman Ben Bernanke unveiled a new blog on Monday and used his first post to defend his record from criticism that he kept rates artificially low and hurt savers. Bernanke said he was worried that his post was “very textbook-y” and with some reason. His blog is built around the concept of an “equilibrium real interest rate” which is the ideal level of rates minus inflation that would allow the economy to use all of its labor and capital resources. Fed Chair Janet Yellen discussed this concept in her policy speech last week. Underneath all the wonkiness in the post is a real passion to convince people that Bernanke was not “throwing seniors under the bus” as at least one of his legislative critics alleged.
During and after the financial crisis, Bernanke said, the equilibrium rate was low and even negative. If the U.S. central bank had pushed rates up to help savers, it would have likely led to an economic slowdown, Bernanke said. The best policy for the Fed is to set rates at the equilibrium rate, he added. So critics who argue that the he kept interest rates “artificially low” are also confused, Bernanke said. There is “absolutely nothing artificial” about setting the Fed rate at the equilibrium rate, he said.
“Only 37% of total students loan balances are currently in repayment and not delinquent.”
What I’m about to tell you is not my own opinion or even analysis. It’s original data that comes from the United States Federal Reserve and national credit bureaus.
• 40 million Americans are now in debt because of their university education, and on average borrowers have four loans with a total balance of $29,000.
• According to the Fed, “Student loans have the highest delinquency rate of any form of household credit, having surpassed credit cards in 2012.”
• Since 2010, student debt has been the second largest category of personal debt, just after a home mortgage.
• The delinquency rate for student loans is now hovering near an all-time high since they started collecting data 12 years ago.
• Only 37% of total students loan balances are currently in repayment and not delinquent.
The rest—nearly 2 out of 3—are either behind on payments, in all-out default, or have entered some sort of deferral program to delay making payments, with a small percentage still in school. It’s pretty obvious that this is a giant, unsustainable bubble (more on this below). But even more important are the personal implications. University graduates now matriculate with tens of thousands of dollars worth of debt. Debt is another form of servitude. Like medieval serfs, debt keeps people tied to jobs they dislike in places they don’t want to be working for bosses they hate doing things that make them feel unfulfilled. Debt makes it very difficult to walk away and start fresh. In fact, ‘starting fresh’ is almost legally impossible when it comes to student debt. Even in US bankruptcy court, student debt cannot be discharged in almost all cases.
It is an albatross that hangs over you for a decade or more if you do make the payments, and it follows you around for the rest of your life if you do not. (I’m not suggesting anyone default on what they owed—simply pointing out that nearly every other form of debt can be discharged EXCEPT for student debt.) This kind of debt has a huge impact on people’s lives. Again, according to the Federal Reserve, “[G]rowing student debt has contributed to the recent decline in the homeownership rate and to the sharp increase in parental co-residence among millennials.” So the Fed’s own analysis shows that student debt is a cause for people in their 20s and 30s to live at home with their parents. Amazing.
How to destroy an economy in five easy lessons.
Artificially low interest rates have cost U.S. savers $470 billion, according to a report released Thursday. The report, from reinsurer Swiss Re, argues against current high levels of so-called financial repression. Swiss Re came up with the $470 billion number by looking at rates from 2008 to 2013. The insurer argues that if the Fed had followed a policy based on the Taylor Rule — a mechanistic way of determining interest rates that some congressional Republicans advocate — the Fed funds target would have been 1.7%age points higher on average. That in turn would have boosted interest income by an average of $14,000 for the wealthiest 1%, and $160 for the bottom 90%. The report concedes that there are obvious beneficiaries of lower rates too, through lower mortgage rates, higher house prices and a rising stock market.
The boost to household wealth from house prices was an estimated $1 trillion and from the stock market was an estimated $9 trillion — dwarfing, then, the $470 billion hit on savings. The report points out, however, that since the rich are more likely to own stocks, and have pricier homes, this has aggravated inequality. Moreover, the report says it’s questionable whether there’s been a boost on actual consumption, since neither equity nor real estate gains are immediately translatable into cash. “As a result, the increase in financial and housing wealth has – at best – only marginally benefited the real economy,” the report says.
Swiss Re also has a natural, vested interest in higher interest rates. The report says U.S. and European insurers have lost around $400 billion in yield income due to financial repression. The financial repression index, shown in the chart above, is based on real government bond yields, the difference between actual yields and fair value, central bank asset purchases, the difference in policy rate vs. the Taylor rule, regulatory risk, asset encumbrance, the available of high-quality liquid assets and domestic debts holdings and capital flow. Most of the components represent an average for both the European Union and the U.S.
It’s called deflation.
Forget about a strong start for the U.S. economy in 2015: Consumer spending barely rose in February after a decline in January, pointing to much slower growth in the first quarter. Consumer spending rose a scant 0.1% last month, the Commerce Department said Monday. Economists polled by MarketWatch were looking for a seasonally adjusted 0.3% gain. The small increase in spending in February and outright decline in January suggest the economy failed in early 2015 to match the pace of growth at the end of last year. Gross domestic product is forecast to expand just 1.4% in the first quarter, down from 2.2% in the fourth quarter and 5% in the third quarter. Harsh winter weather that kept people indoors and steered them away from car dealers and other retailers likely contributed to small gain in spending in February. Lower gasoline prices also were a factor in keeping spending down January and December.
Yet with the weather turning warmer and companies hiring at the fastest pace in 15 years, most economists predict the economy will accelerate in the spring. More American working will boost consumer spending, they say. A similar pattern played itself out in 2014. GDP shrank 2.1% in the first quarter but bounced back with an increase of 4.6% in the second quarter. What could also help this year are the first hints that wages are starting to rise, at least for some workers whose skills are in short supply. Personal incomes in February rose a solid 0.4% for the fourth time in five months. “Households are still flush with the money saved from the big drop-off in gasoline prices and, with the labor market still on fire, incomes should continue to increase at a solid pace,” said Paul Ashworth, chief U.S. economist at Capital Economics. “That provides the scope for a big gain in consumption in the second quarter.”
Everybody’s vulnerable to swings.
The supply of U.S. companies with junk-rated debt is rising just as investor demand for higher yields is climbing. Moody’s reports a two-year high in company debt rated B3 negative or worse—a.k.a. junk—as part of a trend that has seen the list of 184 companies grow by 26% over the period. The rise has been led by oil and gas firms, which accounted for 12 of the 28 additions to the junk list in February. What’s more, the roster would be even longer but for companies falling off the list due to reasons including filing for bankruptcy. Of the 18 issuers no longer rated, 39% filed either for bankruptcy protection or “distressed exchange, and 33% withdrew, with just 28% getting off the list due to upgrades.” “This is a reversal from the previous two quarters, when most companies left the list via ratings upgrades,” Moody’s said.
“If this reversal continues, it could signal tough times ahead for speculative-grade issuers.” Not so far, though. Fueled by low default rates and generally favorable credit conditions, investors in 2015 have been pouring money into funds that invest in high-yield debt. In fact, the previous six weeks before the most recent week had the highest level of flows to junk funds since the financial crisis in 2008 and 2009, according to Morningstar. Flows to junk-focused funds have taken in a net $12.2 billion so far in 2015 as part of a broader interest in fixed income amid a turbulent stock market, Bank of America Merrill Lynch reported. In addition to the big cash attraction to junk, high-grade bond funds have seen net inflows of $36.4 billion.
Steve’s own debt jubilee is still a great idea. But it goes against every banker and politician’s desire.
A letter published [Mar 26] in the Financial Times signed by 19 economists calls on the European Central Bank to adopt an alternative quantitative easing policy. The letter includes a call to distribute cash directly to citizens of the eurozone. As a response to the ECB plan to inject €60 bn a month for the next 18 months into the financial system, 19 economists have signed a letter to the Financial Times calling on the ECB to adopt a different approach which they consider a more efficient way to boost the eurozone economy. “The evidence suggests that conventional QE is an unreliable tool for boosting GDP or employment. Bank of England research shows that it benefits the well-off, who gain from increasing asset prices, much more than the poorest,” the letter reads. The signatories offer an alternative:
Rather than being injected into the financial markets, the new money created by eurozone central banks could be used to finance government spending (such as investing in much needed infrastructure projects); alternatively each eurozone citizen could be given €175 per month, for 19 months, which they could use to pay down existing debts or spend as they please. By directly boosting spending and employment, either approach would be far more effective than the ECB’s plans for conventional QE.
The idea of having central banks to distribute cash to citizens has often been called “quantitative easing for the people” – a term coined by Steve Keen, an Australian economist. Prof. Steve Keen signed the letter, along with 18 other economists, including several advocates for basic income such as BIEN’s cofounder Guy Standing, David Graeber, Frances Coppola and Lord Robert Skidelsky. Guy Standing recently wrote an article outlining a proposal for having the ECB to finance basic income pilot studies in Europe:
“Monthly payments could be provided to every man, woman and child in, say, four areas on a pilot basis, with the sole condition that they would only continue to receive them if they were residing in those areas. People would still be free to move. However, it would help them to be able to stay. Such payments could be made for a period of 12 or 24 months.”
First the bust of the housing bubble, now the stock bubble bursts. What’s next for China’s savings?
International investors are cashing out of China’s world-beating equity rally Foreigners sold a net 1.7 billion yuan ($274 million) of Chinese shares via the Shanghai-Hong Kong exchange link in the week through Monday, while outflows from the two biggest Hong Kong exchange-traded funds tracking mainland shares totaled $622 million. Money flowed out of the link again on Tuesday as the Shanghai Composite Index touched a seven-year high on government plans to bolster the housing market. Global investors are losing faith in the rally even as mainland traders open stock accounts at the fastest pace on record and authorities endorse gains in equities that have doubled China’s market value over the past year to a record $6.5 trillion.
While locals are focused on the prospects for further stimulus, UBS says foreigners are concerned it hasn’t done enough to revive growth after a gauge of manufacturing contracted in March and measures of industrial output and investment trailed estimates in the first two months of 2015. “The A-share market is in a bubble stage,” said Wenjie Lu, a strategist at UBS in Shanghai. “It makes sense for foreign investors to take profits.”
The BoE’s already preparing for the BIG China bust.
The Bank of England is to impose a series of tests on large UK banks to establish whether they are able to withstand a dramatic slowdown in China, a contraction in the eurozone, the worst deflation since the 1930s or a fall in UK interest rates to zero. The Co-operative bank – which failed last year’s tests – is no longer included in the annual assessments of the industry’s financial strength as it is too small, leaving six banks and the Nationwide building society to be tested. The banks are Barclays, HSBC, Santander UK, Standard Chartered and the two bailed-out banks, Lloyds Banking Group and Royal Bank of Scotland. The Bank will give more weight to international scenarios, devised after talks with the IMF, than it did in the 2014 tests, which had a domestic emphasis.
Last year’s tests were designed to meet those imposed by the European Banking Authority, which is not conducting tests this year. The City is expecting this year’s tests to focus on the strength of HSBC and Standard Chartered, although a scenario for the UK is included, under which inflation is negative for seven consecutive quarters – the largest fall in prices for 80 years – and the bank rate cut to zero from the 0.5% level at which it has been stuck since the banking crisis. Banks are being asked to test their ability to withstand shocks over a five-year period to the end of 2019 and be expected to maintain a minimum amount of capital and meet a leverage ratio – a tougher measure of financial strength – while ensuring lending to the real economy grows 10% over the five-year period.
Mark Carney, governor of the Bank, said last year’s results showed the UK banking system was stronger than it had been before the 2008 crisis. “This year’s test will have a different focus and is equally important. By assessing the resilience of the UK banking system against a major shock, we will improve further our ability to identify vulnerabilities and we will ensure that banks have plans in place to address a wider range of problems,” Carney said. The severity of the test’s imagined downturn in China – with growth falling to about 1.6% growth – is likened to the scale of the fall in house prices in the UK used last year, when house prices were assumed to collapse by 35%. Chinese economic growth is about 7%.
“..audits of bank transfers abroad, TV license and e-gaming tenders, a value-added-tax lottery scheme, a crackdown on smuggling and the settlement of arrears owed to the state.”
– Greece’s biggest creditor Germany said on Monday that the euro zone would give Athens no further financial aid until it has a more detailed list of reforms and some are enacted into law, adding to scepticism over plans presented last week. A senior official in Brussels on Sunday had dismissed the list as “ideas” rather than a plan that Greece could submit to EU and IMF lenders to avoid running out of cash next month. Euro zone states are still waiting for Greece to send a more comprehensive list, a German finance ministry spokesman said. Chancellor Angela Merkel said Athens had a certain degree of flexibility on which reforms to implement but that they must “add up” to the satisfaction of European partners. “The question is can and will Greece fulfill the expectations that we all have,” she said during a visit to Helsinki.
“There can be variation as far as which measures a government opts for but in the end the overall framework must add up.” There was no immediate reaction from Athens on whether the list would be amended further. Lenders have said it could take several more days before a proper list was ready. Greek and other euro zone officials from the Euro Working Group are due to discuss the reforms on April 1. A Greek finance ministry official said the list included a lowered target of €1.5 billion in proceeds from asset sales this year and a proposal to set up a bad bank with bailout funds returned to the euro zone in February. Among the slated asset sales is a stake in the country’s biggest port, Piraeus, in which China has expressed interest. The list also estimates Greece can raise €3.7 billion this year through audits of bank transfers abroad, TV license and e-gaming tenders, a value-added-tax lottery scheme, a crackdown on smuggling and the settlement of arrears owed to the state.
“..but no “recessionary measures” such as wage and pension cuts.”
Greek finance minister Yanis Varoufakis has called for an end to the “toxic blame game” between Greece and Germany. He made the call as Greece prepares to finalise its list of economic reforms to present to its international creditors. The reforms are needed to unlock a new tranche of bailout cash for Greece, which could run out of money in weeks. Mr Varoufakis said that finger-pointing between Germany and Greece would only aid Europe’s enemies. Athens and Berlin have been engaged in a bitter war of words as the Greek government seeks to renegotiate the terms of its bailout. German finance minister Wolfgang Schaeuble has publicly expressed his anger, claiming last week that Greece “has destroyed all trust”. He also acknowledged that Greece could “accidentally leave the eurozone”.
Writing in the German business newspaper Handelsblatt, Mr Varoufakis said that tensions between the two countries “must stop”, adding: “Only then can Greece, with support of its partners, focus on implementing effective reforms and growth-orientated policy strategies.” Greece submitted preliminary plans to the EU, IMF and the ECB on Friday night that it says will raise some €3bn in state revenues. They include measures to combat tax evasion, more privatisations and higher taxes on alcohol and cigarettes, but no “recessionary measures” such as wage and pension cuts. However, the reforms as initially proposed do not appear to have been specific enough to win the approval of the lenders, formerly known as the “troika”.
That definition says it all, doesn’t it?!
Greece’s proposed plans to bolster its finances in exchange for unlocking bailout funds still need lots of work, three European officials said. The 15-page draft, which was discussed Sunday in Brussels, requires more information and details and was a long way from serving as the basis of a deal, said one of the aides, who asked not to be named because the talks were private. Seeking a strategy that passes muster with European officials now withholding loans as the country’s cash crunch deepens, Greece’s government foresees a net increase of €3.7 billion in receipts this year. The biggest chunk would be as much as €875 million from the “intensification of audits on lists of bank transfers and offshore entities,” according to the draft.
“The implication from early on has been that the Greek side doesn’t have enough flesh on bones of some of the new proposals,” said Michael Michaelides at RBS. “The surprising thing about even current proposals given leaks is the seeming lack of technocratic input, which would have helped the Greek case.” Prime Minister Alexis Tsipras was elected Jan. 25 on a platform of easing budget cuts and restructuring debt. While he backed away from those positions to win a Feb. 20 agreement to extend the nation’s bailout until the end of June, his diplomatic maneuvering and the delays in providing a detailed economic plan are frustrating the rest of the currency bloc. They have also roiled financial markets and spurred Greeks to pull their savings from banks, derailing the economic recovery.
Eh, yes, you can: “When the deputy prime minister is in China and making certain statements, you can’t contradict it here before he’s even returned to Greece.”
Greek Prime Minister Alexis Tsipras, facing euro-area demands for a credible economic plan, is fending off allies at home who are spoiling for a fight. With the 40-year-old premier due to address parliament in Athens Monday evening amid a deepening cash crunch, a pair of his ministers warned against retreating from election promises to end austerity. Underscoring the cacophony, the energy minister contradicted Tsipiras’s deputy on the sale of the country’s biggest port to China. “This speaking with two tongues has an expiration date,” said Aristidis Hatzis, associate professor of law and economics at the University of Athens. “When the deputy prime minister is in China and making certain statements, you can’t contradict it here before he’s even returned to Greece.” [..]
Greece has red lines and won’t agree to any “recessionary measures” such as cutting wages or pensions or allowing mass dismissals, Tsipras told Real News newspaper in an interview published Sunday. The only way for Greece to end its crisis is through confrontation, if not conflict, with a “Germanized Europe,” Energy Minister Panagiotis Lafazanis said in an interview with the Athens-based Kefalaio newspaper. Privatizations, especially in strategic areas, “can’t and won’t happen,” he said. [..] Adding to the confusion, Euclid Tsakalotos, international economic-affairs minister, said Greece won’t abandon its anti-austerity philosophy in return for aid. He spoke in the U.K.’s Guardian newspaper as talks were taking place in Brussels over the reform measures. Greece wants a deal but will go its own way “in the event of a bad scenario,” he said.
I’m with Ron on this. As I said before, all supra-national organizations should be folded, because they will all over time drift towards attracting sociopaths attracted by the lack of transparency and democracy inherent in them.
A responsible financial institution would not extend a new loan of between $17 and $40 billion to a borrower already struggling to pay back an existing multi-billion dollar loan. Yet that is just what the International Monetary Fund (IMF) did last month when it extended a new loan to the government of Ukraine. This new loan may not make much economic sense, but propping up the existing Ukrainian government serves the foreign policy agenda of the US government. Since the IMF receives most of its funding from the United States, it is hardly surprising that it would tailor its actions to advance the US government’s foreign policy goals.
The IMF also has a history of using the funds provided to it by the American taxpayer to prop up dictatorial regimes and support unsound economic policies. Some may claim the IMF does promote free markets by requiring that countries receiving IMF loans implement some positive economic reforms, such as reducing government spending. However, other conditions imposed by the IMF, such as that the country receiving the loan deflate its currency and implement an industrial policy promoting exports, do not seem designed to promote a true free market, much less improve the people’s living standards by giving them greater economic opportunities.
The problem with the IMF cannot be fixed by changing the conditions attached to IMF loans. The fundamental problem with the IMF is that it is funded by resources taken forcibly from the private sector. By taking resources out of private hands and giving them to IMF bureaucrats, government distorts the marketplace, harming both American taxpayers and the citizens of the countries receiving the IMF loans. The idea that the IMF is somehow better able to allocate capital than are private investors is just as flawed as every other form of central planning. The IMF must be repealed, not reformed.
“Syria’s Assad used to rank high. Only 17% see him as a threat now, but a year and half ago, John Kerry put him on a list he apparently keeps that also includes Adolf Hitler and Saddam Hussein. ”
People in the United States feel under threat, both from beyond our borders and within them. In fact, when asked about both U.S. President Barack Obama and Russian President Vladimir Putin, it was a pretty darn close call — 20 percent saw Putin as an imminent threat compared to 18 percent who said the same about Obama. A recent Reuters/Ipsos poll asked more than 3,000 Americans what they see as some of the biggest threats to themselves and the country. You can slice and dice the information in literally hundreds of different ways here. People were shown a range of potential threats and then asked to rate how dangerous they were with one being no threat and five meaning the threat is imminent.
I think it’s safe to say that a national security expert might not agree with the public’s choices. More people fear Boko Haram, a scary but ragged Islamic radical group in Nigeria that might have trouble paying for plane tickets to the United States, than Russia, which recently invaded a major European country. And a whopping 34 percent consider Kim Jong-un, the leader of impoverished North Korea, an imminent threat. Kim may have a couple of nukes, but otherwise his nation is a basket case, so poor that it relies on international aid to feed itself. Though considering how fast Sony Pictures pulled “The Interview” from theaters, I guess the public’s not alone in being afraid of the young man with the unique hairstyle.
Perhaps the most disturbing part, however, is how Americans view each other, simply because of the political party they favor. Thirteen percent of us see the Republican and Democratic parties as an imminent threat. That’s the same number who think the Chinese might be. Quick reality check: neither political party is the largest foreign holder of U.S. debt, nor could they cripple us economically in an afternoon. Nor has either party independently building an army that may soon be able to rival that of the United States — that we know of, anyway.
Do Google Holland Earthquakes.
After an earthquake toppled her chimney, sending rocks crashing through the roof and onto her legs, Sandra Ladra didn’t blame an act of God. She sued two energy companies, alleging they triggered the 2011 quake by injecting wastewater from drilling deep into the ground. Ms. Ladra’s lawsuit, now before the Oklahoma Supreme Court, highlights an emerging liability question for energy companies: Can they be forced to pay for damages from earthquakes if the tremors can be linked to oil-and-gas activity? Oklahoma, with a history of mild-to-moderate seismic activity, experienced 585 earthquakes of 3.0 or greater magnitude last year—big enough to be felt indoors—according to the Oklahoma Geological Survey.
That’s more than the state had in the previous 30 years combined and the most of any state in the contiguous U.S. So far, most of the tremors under investigation in Oklahoma and other oil-producing states, including Arkansas, Kansas, Ohio and Texas, have been too small to cause major damage. But the prospect of facing juries over quake-related claims is reverberating throughout the energy industry, which fears lawsuits and tighter regulations could increase costs and stall drilling. “It’s definitely something that has risen to a level of fairly high concern,” Steve Everley at industry advocate Energy In Depth said of earthquake-related risks. “Companies recognize that there’s a problem here,” he said, adding that they are contributing data to help regulators determine what’s causing the quakes.
Most of the focus isn’t on hydraulic fracturing, which involves shooting a slurry of water, sand and chemicals into wells to let oil and gas flow out—and which helped touch off the recent U.S. energy boom. Instead, researchers say the most serious seismic risk comes from a separate process: disposal of toxic fluids left over from fracking and drilling by putting it in wells deep underground. Geologists concluded decades ago that injecting fluid into a geologic fault can lubricate giant slabs of rock, causing them to slip. Scientists say disposal wells are sometimes bored into unmapped faults. The practice isn’t new, but has proliferated with the U.S. drilling boom.
If the US hadn’t antagonized Russia three ways to Sunday before, this would have been a whole different (storm in a) cup of tea.
Russian Foreign Minister Sergei Lavrov left talks on Iran’s nuclear program and will only return if an accord is in sight, suggesting that negotiations will continue into the final hours before a March 31 deadline. Diplomats said obstacles remain after foreign ministers from the six powers jointly met Iranian envoys for the first time in the latest round of talks in Lausanne, Switzerland. Lavrov will return if there’s a “realistic understanding of a deal,” Russian Foreign Ministry spokeswoman Maria Zakharova said. “The main thing that gives us optimism is the determination of all the ministers to reach a result without taking a pause,” said Lavrov’s deputy, Sergei Rybakov. Russia sees positive signals at the talks, Dmitry Peskov, Putin’s spokesman, said in Moscow.
After a 12-year standoff, negotiators are divided over the pace of easing sanctions on Iran and the limits to be imposed on its nuclear program. A framework accord by March 31 would be a step toward ending Iran’s economic isolation, though another three months are envisaged to reach a detailed final agreement. Talks are stuck on how to roll back sanctions and how to reimpose them should Iran violate the agreement, a European diplomat said after Monday’s plenary meeting. No decision has been made on how to dispose of Iran’s enriched uranium, which is essential to ensuring that its nuclear program is exclusively peaceful, a U.S. official said. While the countries in talks with Iran would prefer that the uranium be transferred to a guarantor nation, other options are being discussed, the European diplomat said.
A three-day lockdown in Sierra Leone has exposed hundreds of potential new cases of Ebola, aiding efforts to bring to an end an epidemic that has already killed 3,000 people in the country. Officials ordered the country’s 6 million residents to stay indoors or face arrest during the period that ended late on Sunday as hundreds of health officials went door-to-door looking for hidden patients and educating residents about the virus. Reports to authorities of sick people increased by 191% in Western Area, which includes the capital, during the lockdown compared with the previous weekend, said Obi Sesay of the National Ebola Response Center. “Tests are being carried out on their blood samples, and the results will be in by Wednesday,” Sesay said, adding that 173 of the patients in Freetown met an initial case definition for Ebola.
In the rest of the country, there was a 50% increase in sick people reported in the lockdown’s first two days, Sesay said. Sierra Leone has reported nearly 12,000 cases since the worst Ebola epidemic in history was detected in neighboring Guinea a year ago. In all, more than 10,000 people have died in the two countries plus Liberia. New cases have fallen since a peak of more than 500 a week in December, but the government said the lockdown, its second, would help identify the last cases and reduce complacency. A source who declined to be identified said there were 961 death alerts nationwide during the lockdown’s first two days and 495 reports of illness of which 235 were suspected Ebola.