Signs of the Times (1/15/16)

World is Facing the Worst Risks in a Generation

The world is facing the greatest risks in a generation, according to experts surveyed by the World Economic Forum. Political instability is the worst it has been since the Cold War, and the number of people being forced to flee their homes is the highest in history. The effects of climate change are becoming more prominent, and terrorism is on the rise. Those are the conclusions of the forum’s risk report, released ahead of its annual meeting of world leaders and top business executives next week in Davos, Switzerland. It makes grim reading, warning of a rising toll from global uncertainties. “The risks are more real, more imminent, more tangible…we are on the edge of a tipping point,” said Espen Eide, the head of geopolitical affairs at WEF.

Markets in Free Fall Friday

The market storm that has engulfed Wall Street to start 2016 is again taking aim at stock investors as the Dow plunged almost 400 points at the open Friday as increasingly jittery traders react to the latest swoon in oil prices and another big selloff in Chinese stocks overnight. A nearly 6% slide in U.S. produced crude sent prices down below the key $30 a barrel level. Adding to investor angst was another big stock market slide in mainland China, where the Shanghai composite slid 3.6%, putting it back in bear market territory, or more than 20% from its recent high.

Stealth Gitmo Transfers Condemned by Congress

The Obama administration on Thursday quietly transferred 10 Yemeni Guantanamo detainees to neighboring Oman – so quietly, in fact, that the news was first reported by state-run Middle East news agencies. And once the news got to Capitol Hill, it set off alarm bells given the host country’s proximity to Al Qaeda’s most active branch. The transfer is the largest batch of detainees shipped out of the Cuba prison camp so far this year. It is part of a wave of transfers as the administration steps up efforts to shrink the prison population, with the ultimate goal of closing the facility despite congressional resistance. Sen. Kelly Ayotte, R-N.H., slammed the transfer as a “thinly veiled attempt to undercut the will of Congress and would further endanger the American people.” The administration is banned by law from transferring Guantanamo detainees to Yemen, given the risk in that country. Yemen is not only racked by civil war but is the home of Al Qaeda in the Arabian Peninsula. At least three previously released Guantanamo detainees have gone on to become leaders with AQAP in Yemen after leaving the camp. Given that Oman neighbors Yemen, Ayotte described the move as an attempt to “circumvent” the congressional ban on sending prisoners to Yemen.

Obama Approves Unprecedented Increase in Refugee Aid

President Obama approved an unprecedented increase of refugee aid Wednesday, authorizing $70 million from a special fund set up by Congress to resettle refugees in the United States. In both size and scope, the presidential declaration was the largest expansion of the program, known as Emergency Refugee and Migration Assistance, in at least 20 years. Obama last tapped the fund in 2014 to provide $50 million to deal with a refugee crisis in South Sudan. Secretary of State John Kerry said Wednesday the the Obama administration was responding to “the worst refugee crisis that the world has seen since the Second World War.” The U.N. High Commissioner for Refugees estimates there were 19.5 million refugees globally at the end of 2014, up 2.9 million from the previous year.

Obama’s Economic Embellishments

President Obama’s final State of the Union Address came up short of the facts on economics, according to FactCheck.org. He embellished his record on jobs, citing “more than 14 million new jobs,” without mentioning that’s only since the job losses hit bottom in February 2010, not since he took office years earlier. Obama similarly boasted of nearly 900,000 manufacturing jobs gained “in the past six years.” Over his entire time in office, manufacturing jobs have gone down by 230,000. And he said he had cut the country’s deficits by “almost three-quarters.” But that’s measured from fiscal 2009, during the recession, not since the start of his presidency. Obama also repeated his now years-long claim of crediting the Affordable Care Act for a slowdown in health care spending. In fact, the growth rate jumped in 2014, when the law’s coverage provisions were implemented.

Oregon Occupiers Call for Common Law Grand Jury

Ammon Bundy, the man leading a group of armed protesters who have taken over a federal wildlife refuge in Oregon, called Wednesday for a common law grand jury to examine what he called violations of the U.S. Constitution. He said officials in Harney County, including Judge Steve Grasty, have failed to protect the citizens of the county. Bundy wants the county to allow for a common law jury, outside of the court system, to hear evidence against the judge and others. Bundy’s group has occupied the Malheur National Wildlife Refuge in southeast Oregon for 12 days to protest federal land policies, specifically protesting the sentencing of Dwight Hammond and his son Steven, two ranchers convicted of arson on federal lands in Oregon. The group will host a community meeting at 7 p.m. PT Friday to explain its position and announce when it will leave. It comes as resentment toward the group grows among the residents of Burns, Ore.

NSA is World’s Best Hacker says Former Director

Few people truly understand what the U.S. National Security Agency actually does. Its former leader cleared that up on Tuesday. The NSA is America’s hacker. “We steal other people’s stuff in the cyber domain,” retired General Michael Hayden said at a cybersecurity conference. He then put that in context: Every country’s government is spying on other people and governments. America’s spies just do it better. “As a former director of NSA, I like to think we’re number one,” he said. “We steal stuff to keep you free and keep you safe,” Hayden said. “We do not steal stuff to make you rich. I can think of only four other countries who can say that. Every other nation-state believes it is legitimate espionage activity to steal intellectual property, and the Chinese are the poster child for it.”

Al Jazeera America to Shut Down

Al Jazeera America, which went on the air in 2013 — and is partly funded by the ruling family of Qatar — announced Wednesday it is shutting down at the end of April, citing the “economic landscape of the media environment.” The network said in a statement that “Al Jazeera America will cease operation by April 30, 2016,” explaining that “while Al Jazeera America built a loyal audience across the U.S. and increasingly was recognized as an important new voice in television news, the economic landscape of the media environment has driven its strategic decision to wind down its operations and conclude its service.” Al Jazeera’s prime-time ratings recently ranged from just 20,000 to 30,000 viewers, according to Nielsen data.

Goldman Sachs to Pay $5.1 Billion to Settle Toxic Mortgage Probe

Goldman Sachs announced on Thursday it reached a $5.1 billion deal to put to rest claims made by the government over its toxic mortgage deals that helped cause the recent recession. Goldman Sachs was accused of cobbling together home mortgage securities it knew would implode and then selling them to unsuspecting investors. Goldman said it has agreed to pay a $2.4 billion civil penalty, pay $875 million in cash and provide $1.8 billion in consumer relief. The bank said the consumer relief will include loan forgiveness for underwater homeowners and distressed borrowers as well as support for affordable housing. Goldman expects the deal to dent its fourth-quarter profits by about $1.5 billion after taxes. Other Wall Street firms have reached similar deals in recent years, including JPMorgan Chase and Morgan Stanley.

U.S. Organ Transplants Reach 30K Milestone

Organ transplants in the United States reached a milestone in 2015, exceeding 30,000 for the first time, a non-profit group reported Wednesday. Those 30,973 transplants of kidneys, livers and other organs were nearly 5% more than 2014 and came after years of fairly slow, steady increases, said officials with the Organ Procurement and Transplantation Network. Stepped-up organ donations, rather than any breakthroughs in transplant surgery, likely drove increases in recent years, said David Klassen, the network’s chief medical officer. Transplant centers also have worked to improve logistics, so that fewer donated organs are discarded, he said. The unrelenting slide in oil prices is rippling to the broader economy as the industry’s downturn squeezes sectors as diverse as airlines and restaurants, steelmakers and law firms.

Rise of Imported Food a Health Threat in U.S.

An enormous amount of U.S. foods are being imported from other countries, raising all kinds of health and safety concerns. Food imports have exploded in recent years, totaling $119 billion in 2014, according to the USDA. That’s nearly triple the value of imports from 15 years earlier. The problem is that food safety regulations in other countries might not be as tight as those in the United States. And U.S. regulators are challenged to keep up with the massive number of producers and shipments. The FDA says that only 2% of all imported food products are tested in a lab. The 1,403 facility inspections the FDA completed in 2013 were just over half of what is mandated under the Food Safety Modernization Act, according to the Government Accountability Office. The Centers for Disease Control has taken a particular interest in imported food over the past few years. The CDC says there have been more foodborne illness outbreaks associated with imported food as we eat more of it.

Economic News

Retail sales dipped last month on low gasoline prices and a slowdown in auto sales. Sales fell 0.1%, the Commerce Department said Friday. Excluding volatile autos and gasoline, sales were unchanged. The weak showing will likely solidify estimates that economic growth was feeble in the fourth quarter, largely because of weak trade and industrial production, which have been hammered by a struggling global economy, a strong dollar and a severe oil sector downturn. Also, business stockpiling slowed as companies pared bloated inventories. Many analysts estimate the economy grew just 1% or less in the fourth quarter, less than half the average pace during the 6 ½-year-old recovery.

More Americans applied for unemployment benefits last week, but the level remains near historic lows that point to a healthy job market. Applications for jobless aid rose 4,000 to a seasonally adjusted 284,000, the Labor Department said Thursday. The less volatile 4-week average rose 3,000 to 278,750. Over the past 12 months, the number of people collecting benefits has fallen 6.3% to 2.3 million. While the stock market has suffered a tumultuous start to 2016, but U.S. employers largely appear to remain confident in the U.S. economy.

About $58.5 billion was invested by venture capitalists in 2015, according to a PricewaterhouseCoopers and National Venture Capital Association report published Friday. The MoneyTree™ Report shows that 2015 was the biggest year since 2000, when nearly $105 billion was invested. But there are signs the funding party may be waning.

Global PC shipments fell for the fifth consecutive quarter, according to research firm Gartner. Overall, global shipments in the fourth quarter fell 8.3%. PC stalwarts including Lenovo, Dell and HP all ended the fourth quarter with declines in shipment growth. The lone bright spot? Apple, which posted growth of nearly 3% for the fourth quarter. The PC market ended this year below 300 million shipments, the first time that’s happened since 2008.

The unrelenting slide in oil prices is rippling to the broader economy as the industry’s downturn squeezes sectors as diverse as airlines and restaurants, steelmakers and law firms. The U.S. crude benchmark price The U.S. crude benchmark price was up about 3% Wednesday morning but has fallen about 15% so far this year after plummeting in 2015 and is close to 12 year lows. The crash has led oil producers to sharply scale back drilling and cut jobs. United Airlines said this week it expects lower passenger revenue in the fourth quarter because of reduced bookings by Texas oil executives who often travel first class. KB Homes, the giant builder, dialed back construction in the Houston area last year because of oil’s slide. Every lost oil and gas job leads to an additional 3.43 jobs cut in other sectors, Moody’s Analytics estimates. That means the 204,000 drop in oil and gas payrolls wiped out an additional 700,000 or so jobs in other sectors last year. Manufacturers, for example, announced 37,221 layoffs over the past 12 months.

Foreclosure filings on a national level dropped to a nine-year low in 2015, but some oil-producing states weren’t so lucky, according to a new report from RealtyTrac. Foreclosures increased in Texas, Oklahoma and North Dakota last year as oil prices fell. North Dakota saw a 387% increase in foreclosures in 2015. “The rise in foreclosures in these states is actually a new wave of distress coming through that is mostly unrelated to the subprime loan housing crisis,” of 2008 says Daren Blomquist, vice president at RealtyTrac.

The number of solar jobs in the U.S. has more than doubled in five years. In fact, there are more people working in solar now than at oil rigs and gas fields. The solar industry added 35,000 jobs in 2015, up 20% from the previous year, according to the Solar Foundation, a nonprofit in Washington D.C. In contrast, oil and gas firms slashed nearly 17,000 extraction jobs in 2015 as energy prices continue to plummet. There are now about 209,000 solar energy employees in the U.S. They include solar panel installers, designers, engineers, sales folks and managers. Today, the solar industry workforce is nearly three times the size of the entire coal mining workforce.

Middle East

The Islamic State (IS) terror militia made bold moves and statements in several countries bordering Israel this week, while Israeli military and security officials quietly assured the political echelon that they are paying close attention to developments. IS made an explicit threat to move against the government of Jordan, to Israel’s east in a statement published in their weekly online newspaper Al-Nabah, released on Tuesday. Israeli security analysts consider the stability of Jordan to be a first-order concern for Israel, warning that disorder there would quickly spill over into the Palestinian communities of the West Bank, massively complicating Israel’s own security. IS also recently threatened to step up attacks in the Egyptian Sinai, specifically threatening to target natural gas pipelines which supply Jordan.

Islamic State

Iraqi security forces routed Islamic State fighters at a key hamlet in the first major fighting since pushing them from the strategic city of Ramadi, a senior Defense official said Tuesday. The battles took place near Barwana, a hamlet across the Euphrates River from Haditha in western Anbar province. Fighters from the Islamic State, also known as ISIL or ISIS, began attacking the town with car bombs and mortars on Jan. 3. They have used the open desert region as a staging area for attacks on Haditha, site of a major hydroelectric dam. The victory could be seen as “proof of concept” for the U.S. strategy to back local ground forces with airstrikes and advisers, said Nicholas Heras, a researcher with the Middle East Security Program at the Center for a New American Security.

ISIS declared that it was behind a bloody attack Wednesday outside a Pakistani Consulate in eastern Afghanistan — one that killed seven Afghan security forces and demonstrated the terror group’s spiraling reach and ambition. The Afghan and Pakistani governments said that all three attackers and seven Afghan forces died, but no Pakistani officials did, contrary to ISIS claims. For years, Afghanistan has faced down many militant organizations, with the Taliban and al Qaeda foremost among them. Yet ISIS has become more formidable in that country and neighboring Pakistan over the past year, thanks to an influx of Taliban defectors.

In an extremely unusual airstrike, the U.S. dropped bombs Sunday in central Mosul, Iraq, destroying a building containing huge amounts of cash ISIS was using to pay its troops and for ongoing operations, two U.S. defense officials told CNN. Two 2,000-pound bombs destroyed the site quickly. But the longstanding impact may be even more significant. The officials said the U.S. plans to strike more financial targets like this one to take away ISIS’s ability to function as a state-like entity.

Syria

Thousands of Syrians have sought warmer shelter in recent days after a series of winter storms hit the war-torn nation, dipping temperatures to dangerous levels. With so little aid reaching Syrian citizens, they’re not getting much in terms of blankets or mattresses to help keep them warm during the frigid winter months, Reuters reported. Now, they’re doing everything they can to keep their flimsy shelters from collapsing as heavy snow rapidly accumulated over the past few days, especially for the 1 million or so Syrian refugees living in Lebanon, where the snow has been even heavier. The International Committee of the Red Cross told Al Jazeera that at least 12 million Syrians – nearly half of which are children – are in immediate need of aid. The refugee crisis caused by the Syrian civil war has affected Lebanon more severely than any of its neighbors. There are approximately 1.2 million Syrian refugees in the country — a remarkable figure considering Lebanon’s population was only four million before the war. The number of unregistered refugees is unknown.

Pakistan

A suicide attack on a polio vaccination center in southwestern Pakistan on Wednesday killed 15 people, mainly police who had gathered to escort health workers, who have been repeatedly targeted in recent years by Islamic militants, officials said. Another 23 people were wounded. Hours after the attack, Ahmad Marwat, who described himself as a spokesman for Jundullah, or Army of God, a little-known militant group, claimed responsibility without explaining why the center was targeted. He warned of more attacks on polio teams in the future. Polio workers in Pakistan, and their police escorts, have been targeted in recent years by Islamic militants who accuse them of working as spies for the United States.

Iran

Iran on Wednesday released 10 U.S. sailors detained for several hours after two small U.S. Navy boats crossed into Iranian waters. The state-affiliated Islamic Republic News Agency said the sailors and their boats were returned to international waters and freed. The Pentagon confirmed the release and said there were no indications the sailors were harmed during their detention. Earlier Wednesday, General Ali Fadavi, a naval commander for Iran’s Revolutionary Guards, accused the U.S. military of acting in an “unprofessional” manner. He said the USS Harry S. Truman aircraft carrier made provocative “maritime and aerial” moves after the U.S. sailors were seized Tuesday. Now Iran wants an apology. A navigational error appears to have caused two small Navy boats to stray into Iranian water.

Turkey

Kurdish rebels detonated a car bomb at a police station in southeastern Turkey, then attacked it with rocket launchers and firearms, killing five people, including civilians, the governor’s office said Thursday. Thirty-nine other people were injured in the attack in Cinar. The force of the blast caused a house close to the police station to collapse. The explosion caused extensive damage, affecting buildings two or three blocks away from the police station. Another police station was attacked with rocket launchers in Midyat in what appeared to be a simultaneous assault. The attack came a day after a suicide bomber set off an explosion in Istanbul’s historic Sultanahmet district, just steps away from the landmark Blue Mosque, killing 10 German tourists. Turkish officials say the bomber, a Syrian born in 1988, was affiliated with the Islamic State group.

Kenya

Islamic extremist rebels in Somalia say they have killed dozens of Kenyan troops in an attack on an African Union base in southwestern Somalia. Al-Shabab military spokesman Abdiaziz Abu Mudan told the group’s online radio that at least 63 soldiers had been killed in the attack, which started early Friday. But the Kenyan military said in a statement that the rebels had attacked Somali government soldiers who were stationed near the African Union base run by the Kenyan contingent. The statement also said that the Kenyans had then helped the Somalis to launch a counter-attack against the rebels and fighting is ongoing. The statement also said that the casualty toll is unknown.

Indonesia

At least three bombs exploded near a Starbucks cafe in downtown Jakarta on Thursday while gunmen also attacked a police post and other locations in Indonesia’s capital. Seven people, including five attackers, were killed in the incident. Up to a dozen attackers may be involved in the attacks that police said mimicked the Paris attacks on Nov. 13 that killed 130 people. Thursday’s assaults took place in a busy shopping area close to many embassies and a United Nations office. “They are likely from the (Islamic State) group,” said national police spokesman Anton Charliyan. Police in Indonesia on Friday said that two of the attackers who struck the country’s capital Thursday were previously jailed for terrorism offences.

Poland

Relations between Poland and the European Union’s leaders hit a new low Wednesday, as the bloc’s executives met to investigate Poland’s recent limitations on democracy. The move followed protests last weekend in Warsaw, where tens of thousands of Polish supporters of democracy braved the bitter cold to decry a new law empowering the government to muzzle state radio and television. The law, rushed through the Sejm (Parliament) by the governing Law and Justice Party (known by its Polish acronym as PiS), gives the government complete control of state radio and television. Key managers have been sacked and replaced with PiS political appointees. The European Union has condemned this action. Government officials claim this takeover of public media is necessary to promote national traditions and patriotic values. Pride in Polish identity is a hallmark of the new government, which abhors western European values.

Environment

The shores of India’s southern coast were littered with more than 80 whales, officials said on Tuesday. Bands of short-finned pilot whales began beaching themselves on Monday evening. Rescuers took at least 36 of the mammals back to sea, but they appeared to be disoriented and some found their way back to the beach. Short-finned pilot whales travel in groups or pods, and the absence of a leader confuses the group. “There could be many reasons…navy sonars could have caused it…or pollution…the reason is not immediately known and we don’t want to speculate,” Amal Xavier, Assistant Director of Tuticorin fisheries department, told the Indian Express.

Nearly 8,000 Alaskan seabirds have died of suspected starvation. Emaciated Common Murres, one of North America’s most abundant seabirds, littered along the shore after apparently starving to death. Murre die-offs have occurred in previous winters but not in the numbers Alaska is seeing. Scientists say the die-offs could be a sign of ecosystem changes that have reduced the numbers of the forage fish that murres depend upon. Warmer water surface temperatures, possibly due to global warming or the El Nino weather pattern, may have affected murre prey, including herring, capelin and juvenile pollock. There are about 2.8 million Common Murres in 230 Alaska colonies, part of a worldwide population of 13 to 20.7 million birds. Awkward on land, their short, powerful wings make them extraordinary swimmers, “flying” beneath the surface as deep as 600 feet to hunt for fish.

Earthquakes

A strong earthquake struck just off the coast of Hokkaido in northern Japan. No tsunami warning was issued, and there were no reports of major damage. The magnitude-6.7 quake hit about 12:30 p.m. local time Thursday, near Urakawa town on the southern tip of Hokkaido. The lunchtime quake caught many residents by surprise. Hokkaido police said that two elderly women aged 96 and 86 fell down and suffered minor head injuries in Sapporo. Two nuclear power plants and the Rokkasho reprocessing plant in the quake-hit region were not affected, nuclear safety officials said.

Weather

The National Hurricane Center has upgraded a storm brewing in the Atlantic Ocean to hurricane status, a rarity for January. Hurricane Alex is the first January hurricane in the Atlantic since 1938. Alex will push through the Azores Friday while making the transition to a non-tropical low-pressure system. It was located about 130 miles south of Terceira Island in the central Azores as of 5 a.m. AST Friday.

Waves of arctic air have been impacting the Midwest since last weekend, and another round of frigid temperatures will grip the region this coming weekend. Although the cold temperatures have been locked in across the Midwest, the cold is not extreme enough to break records. Wednesday morning, lows in the single digits were reported as far south as northern Kentucky. Low temperatures in Chicago and Milwaukee dipped into the single digits above and below zero for the fourth consecutive morning Wednesday, with wind chills in the teens below zero.

At least three pileups closed interstates in Indiana and Pennsylvania on Tuesday due to snow and ice. One of the pileups involved as many as 40 vehicles in two collisions along snowy Interstate 74 in southeastern Indiana. A cascade of large rocks closed a Washington highway over the weekend, and officials say that road will likely remain closed for days. The slide was about 50 feet deep and 100 feet long, with boulders as big as trucks. It’s possible that the slide was triggered by saturated ground, but officials haven’t declared an official cause yet. The Waterville area reported more than double its normal precipitation for December.

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