January 15, 2015 - GLOBAL ECONOMY
- Strong headwinds from weak investment, substantial debt burdens and
high unemployment are preventing a pickup in global economic growth
despite a strengthening U.S. recovery and tumbling oil prices,
International Monetary Fund Managing Director Christine Lagarde said.
A healthier U.S. and cheaper energy “won't suffice to actually accelerate the growth or the potential for growth in the rest of the world,” the head of the emergency lender to nations said in a speech Thursday at the Council on Foreign Relations in Washington.
“If the global economy is weak, on its knees, it’s not going to help,” said Ms. Lagarde in remarks previewing the IMF’s latest forecasts for the global economy due out on Monday.
The eurozone, at risk of a third recession in six years, continues to struggle with the fallout from the 2008 financial crisis. Japan is also mired in low inflation, high debt and anemic growth. And output in many major emerging markets—economies that have provided most of the gas for global growth over the last decade—is slowing faster than expected.
Nonetheless, the IMF is upgrading its forecast for economic output in the U.S., one of the few advanced economies bucking the weak global-growth trend. But the world’s biggest economy and a shot in the arm from cheaper gasoline aren’t cures for deep-seated weakness elsewhere, Ms. Lagarde said.
“Too many companies and households keep cutting back on investment and consumption today because they are concerned about growth tomorrow,” she said.
Both Europe and Japan are at risk from a much longer period of excessively low inflation and anemic growth, the former French finance minister said.
Years of stagnation in two of the world’s biggest economies also threaten to drag down global growth. That would make it even harder for those economies to cut their dangerously high debt levels and raise employment, two persistent legacies of the financial crisis.
The Bank of Japan has expanded its cash injections to help spur growth, while European Central Bank officials have signaled plans for a new bond-buying program that could be announced as soon as next week.
Meanwhile, markets are expecting the U.S. Federal Reserve this year to raise borrowing rates for first time since 2006.
The schism between interest rates moving in different directions around the globe is one of the major reasons the dollar has hit decadelong highs in recent weeks against a basket of currencies. Ms. Lagarde said the Fed’s expected midyear rate increase will likely fuel further strong swings in international capital flows, exchange rates, bond prices and stock markets.
Many emerging markets are increasingly exposed to turmoil elsewhere, especially those with high dollar-denominated debt. As those countries’ currency values fall and their growth prospects dim, investors are rethinking their high-risk investments. “Among those emerging markets, some are likely to face a triple risk” from a stronger U.S. dollar, higher global interest rates and volatile capital flows, the IMF head said.
Ms. Lagarde also said oil’s price fall should, on balance, boost global growth, as consumers have more money left over after filling their car tanks to spend in other sectors of the economy. But she acknowledged the decline is also adding to deflation risks in Europe and Japan, bolstering the case for central bank action.
The high risk of recessions and years of slow global growth are why policy makers need to take more aggressive action, she said. Aside from pushing for a longer period of easy-money policies and more infrastructure investment, the IMF has been urging the Group of 20 largest economies to honor promises for economic overhauls to reignite growth prospects.
“Policy makers have to step up structural reforms. There’s a lot of talk about it, and some are doing it, but there has to be real implementation,” she said. “All of that is not new, but it takes a sense of increased urgency.”
In many countries, efforts to restructure labor and product markets, overhaul education, health, and social safety nets, or approve trade deals that would open up protected markets have faced stiff political hurdles. Some economists fear the longer growth remains weak, the more politically difficult those economic policy changes may become. - WSJ.
January 15, 2015 - CALIFORNIA, UNITED STATES- Most of California
will still be in drought in April even though conditions will probably
improve across the southern part of the state, according to the latest
forecast from the U.S. Climate Prediction Center.
Seasonal rains and the potential for a weak El Nino forming in the equatorial Pacific have increased the chances for the drought to ease in southern California as it persists or gets worse in the central and northern areas, the center said in a three-month outlook, issued today.
“But it must be emphasized that improvement is not elimination, and that most of the state will still be in drought to some degree by the end of April,” David Miskus, a forecaster at the center in College Park, Maryland, said in an analysis accompanying the forecast.
California has suffered three years of drought, and water in the nation’s most productive agricultural region has been rationed. The state receives 75 percent of its rainfall from November to March and 50 percent from December to February, according to California’s Water Resources Department.
Early in the season, a series of storms brought rain across large parts of the state as well as some snow in the mountains, providing minor improvement there and elsewhere in the West, the center said.
“Since December 20, however, precipitation has been nearly non-existent across much of California and Nevada, halting favorable moisture conditions that had raised hopes for additional winter drought improvement in California,” Miskus wrote.
Snowpack Deficit
As of Jan. 13, the state was 40 percent behind normal when it comes to the water content of the snowpack in the mountains, he said.
Snow is crucial for California because it allows water to remain in the mountains, where it won’t melt until spring, when it’s needed.
Milder temperatures meant that much of the precipitation in the mountains earlier in the season came as rain.
Elsewhere, drought may develop or intensify in parts of the Mississippi River Valley and parts of Arkansas, Tennessee and Kentucky, the center said. It is forecast to persist in Texas, Oklahoma and Kansas. There may be improvement across Arizona and New Mexico. - Bloomberg.
California Would Need A Ridiculous Amount Of Rain To End Its Drought
California
has been having a bit of a rainy season lately, so much so that some
people are asking if we're finally coming to the end of its three-year
long drought. The answer is almost certainly not. Here's the numbers on
how much water California would need to see the drought's end — and,
fair warning, it's a lot.
NOAA ran two projections
on how much rain we would need to see between now and September to end
the drought, the first to see how much rain it would take to put
California within the bottom 20% range of average accumulated
precipitation and the second to see how much it would take to pull it up
to the exact halfway point.
In
both cases, the average rainfall would need to exceed the average by
over 200%. Or, to put it another way, California would need to see at
least 38 inches of rain or snow between last month and the end of
September. And the most it's ever seen in that time period is just under 30.
January 15, 2015 - CONNECTICUT, UNITED STATES - A 2.2-magnitude earthquake has rattled eastern Connecticut again.
In
what's becoming a daily seismic event, the Weston Observatory of Boston
College said the earthquake occurred at about 4:40 a.m. Thursday near
Plainfield, where previous earthquakes were recorded.
It says two minor earthquakes were recorded on Wednesday and another on Tuesday.
The
observatory says that while the greatest earthquake activity in the
United States is in the west, earthquakes are "quite common" in many
areas of the eastern United States, including New England.
Plainfield
officials have invited Alan Kafka, director of the observatory, to an
informational meeting at 6:30 p.m. Friday at the town's high school. - MYFOXNY.
Eastern Connecticut Is on Edge Amid a Series of Small Quakes
A wire from a seismometer is attached to a water valve outside a home in Plainfield, Conn. Scientists are trying to find the epicenter of earthquakes that have
rumbled through the eastern part of the state. Credit Christopher Capozziello for The New York Times
Connecticut has been feeling a bit of stress lately.
For
people, relief can sometimes be found in a massage, a trip to the beach
or a bottle of wine. For the earth itself, however, it is not so
simple.
In
the eastern part of the state, stresses buried deep underground for
hundreds of millions of years have been causing a bit of a stir.
Over
the last seven days, 11 small earthquakes have been measured in and
around the town of Plainfield, on the border with Rhode Island, the most
recent on Thursday morning.
Jessica
Lyon said she was sleeping in her Plainfield home and sat up suddenly
the other morning, thinking a snow plow had just come tearing past her
house. “I never knew we have fault lines and stuff like that around
here,” she said.
The
subsequent shakes have not bothered her much, or disturbed anything in
her home, but she did call her agent to add earthquake insurance to her
policy.
The
quakes have not been big. The strongest measured only 3.3 magnitude,
and the rumbling has done little more than cause a few pictures on the
walls to rattle and fall. But the rapid succession of small events in a
place unaccustomed to earthquakes has people on edge and asking a lot of
questions.
The top of the list: Are the earthquakes a harbinger of something worse?
The
term used for these events, he said, is a swarm. And earthquake swarms
are somewhat common, at least in geological terms. So common in
Connecticut that, before the first European settlers arrived, the
American Indians referred to an area near Plainfield as Machimoodus,
which has been translated to mean “place of bad noises.” It is how the
town of Moodus got its name.
To
understand what is happening in Plainfield this week, Mr. Williams
said, it is necessary to understand how the Connecticut of today came to
be.
More than 300 million years ago, most of the land on earth was part of a single supercontinent, Pangea.
Connecticut
sat in the middle of this massive body of land. Then, about 200 million
years after Pangea was formed, it began pulling apart. As the world
began to take the shape, tectonic plates were colliding and breaking
apart with tremendous force, creating huge faults. One of those faults —
extending from near New Haven north to Keene, N.H. — helped create the
Connecticut Valley. Although that fault has been inactive for 140
million years, residual stresses still exist and can set off
earthquakes.
Since 1980, there have been swarms of several
hundreds of earthquakes in and around Moodus, and scientists believe the
Indian name was the result of the small tremors that would shake the
lands.
Plainfield, in eastern Connecticut, an area that has faced a swarm of small earthquakes in recent days. Officials have planned an information session on Friday
at Plainfield High School. Credit Christopher Capozziello for The New York Times
But those quakes were mostly only detectable by machines. Not so the most recent swarm.
Dino Chrisovechotis said that he lived through earthquakes as a child in Greece but that his neighbors could use some basic information.
“Nobody here knows anything about earthquakes,” said Mr. Chrisovechotis, standing in Gus’s Pub & Pizzarama in Plainfield, the restaurant of which he is a co-owner. “It’s crazy.”
Mr. Chrisovechotis said he told his children to climb under their desks in school if the ground started shaking again.
Town leaders have organized an information session for residents on Friday night at Plainfield High School. A scientist from the Weston Observatory at Boston College will explain about the quakes, and emergency planners will fill residents in on what they can do to stay safe. But since earthquakes do not happen frequently in the area, there is a paucity of data, and many questions cannot be answered.
“In this case, the quakes are too small to produce surface rupture,” Mr. Williams said. With no surface rupture, scientists cannot determine the epicenter of the quakes.
Without knowing the epicenter, they could not say for sure what was causing the rumblings.
Scientists from the Weston Observatory at Boston College placed a seismometer in a garage in Plainfield to measure earthquakes.
Credit Christopher Capozziello for The New York Times
Still, Mr. Williams said the quakes had so far fit the pattern of other swarms.
In places like California, where quakes result from the friction between tectonic plates, a big event tends to be followed by smaller aftershocks. Earthquake swarms, however, tend to be characterized by several small events that build to a large event and then taper off again.
In this case, the large event would be the 3.3 quake measured on Monday. Mr. Williams said it was unlikely that there would be “a larger or more damaging earthquake.”
But to make certain, the Geological Survey has been working with local experts to monitor the situation.
Scientists from Weston have placed four temporary seismometers in the area, all in private homes, to pinpoint the locations and details of each temblor more accurately.
Because the equipment is costly and people are curious, the scientists are determined to keep the sites of the temporary seismometers a secret.
They agreed to show a reporter and photographer on the condition that no names, addresses or identifying information be used.
On a slab of concrete, in a plastic storage bin, was a machine the size of a car battery, sprouting wires and plugged into a wall outlet.
As the machine sat ready to record additional rumblings, the homeowner said he was trying not to work about more earthquakes. “I just go about my daily activities,” the homeowner said. “What can you do? I just hope it’s not the big one.” - NY Times.
January 15, 2015 - GLOBAL ECONOMY - A
shocking move from the Swiss National Bank sent the dollar reeling and
gold prices flying higher on Thursday. U.S. stocks declined as
December retail sales failed to live up to expectations and investors
worried about global economic growth. When the stock market starts to
behave like a roller coaster, that is a sign that a major move to the
downside is right around the corner.
U.S. Stocks decline as crude falls, bank earnings miss - Dow Faces longest loss streak in 3 months
Traders on the floor of the New York Stock Exchange.
U.S.
stocks fell for a fifth session on Thursday, as investors considered
the price of crude, disappointing quarterly results from large U.S.
banks, and an unexpected move by Switzerland's central bank, which gave
up its minimum exchange rate.
"Central
bankers were surprised today, and investors too, by the whole Swiss
thing," Kim Forrest, senior equity analyst at Fort Pitt Capital, said. "It
foretells what happens next week, if they are going to massively do QE
(quantitative easing), which is kind of what is indicated by the Swiss
move today," said Forrest, who added that what remains unclear is "how
forcibly (European Central Bank President Mario) Draghi is going to be
able to do QE." Bank of America dropped after the bank reported a 14 percent fall in quarterly profit; Citigroup also declined as it posted a slim fourth-quarter profit. Target shares rose after the discount retailer should it would discontinue operations in Canada.
"Bank earnings are a negative," Art Hogan, chief market strategist at Wunderlich Securities, said. U.S. oil futures
rose as high as $51.27 a barrel, and then turned lower to end down
$2.23 at $46.25 a barrel on the New York Mercantile Exchange.
A
measure of manufacturing in the new York region climbed to 9.95, above
estimates. Other reports had wholesale prices falling 0.3 percent in
December, and a larger-than-expected number filing for jobless benefits
last week, up by 19,000 to 316,000.
"Claims are up more than
expected, (and) the possibility of deflation is escalating. As far as
the market is concerned, the saving grace is oil prices are back over
$50, it helps negate some of the sour earnings out of the banking sector
today," said Peter Cardillo, chief market economist at Rockwell Global
Capital, speaking before crude turned lower.
Relinquishing a 90-point gain, the Dow Jones Industrial Average fell as much as 129 points, and was lately down 73.13 points, or 0.4 percent, at 17,353.96, with JP Morgan Chase leading blue-chip declines that included 20 of 30 components.
The S&P 500
dropped 13.35 points, or 0.6 percent, to 1,997.92, with technology
hardest hit and utilities the best performer among its 10 major industry
groups.
The Nasdaqshed 53.01 points, or 1.1 percent, to 4,586.31.
For
every five shares rising, roughly nine fell on the New York Stock
Exchange, where 479 million shares traded as of 2:25 p.m. Eastern.
Composite volume approached 2.8 billion.
Stock-index
futures had fluctuated ahead of the open after the Swiss National Bank
abandoned its three-year euro cap on the franc, with the move coming
ahead of anticipated purchases of government bonds by the ECB.
Gold futures climbed $30.30, or 2.5 percent, to $1,264.80 an ounce and the 10-year Treasury yield fell 9 basis points to 1.7667 percent.
"The
market is trying to wrap its head around stability in energy prices and
how much stimulation will the eurozone get," Hogan said.
On
Wednesday, U.S. stocks declined for a fourth session as December retail
sales failed to live up to expectations and investors worried about
global economic growth. - CNBC.
US Equity Market Liquidity Evaporates To 3 Year Lows
Thanks to the SNB surprise this morning - and FX market volatility (and illiquidity) at insane levels - liquidity in the S&P 500 e-mini futures contract is at its lowest in at least 3 years...(i.e., prepare for volatility)
Switzerland stuns markets by giving up on currency peg, Franc jumps 30% in minutes
A screen at the Swiss Stock Exchange in Zurich, Switzerland, showing the rate of the Swiss Market Index SMI, is pictured Thursday, Jan. 15, 2015. Switzerland's
central bank said Thursday it has scrapped a policy that limited how much the euro could fall against the Swiss franc, an unexpected decision that caused
gyrations in financial markets. The Swiss stock index dropped 9 percent as investors worried about the prospect of the country's exports becoming more
expensive and less competitive internationally. (AP Photo/Keystone,Walter Bieri)
Bowing
to the inevitable, Switzerland has ditched an increasingly expensive
policy to limit the export-sapping rise of the Swiss franc — a decision
that propelled the currency a whopping 30 percent higher against the
euro within minutes.
Thursday's decision by the Swiss National
Bank, or SNB, to end its efforts to keep the euro from trading below
1.20 francs came amid mounting speculation that the European Central
Bank will next week back a big stimulus program that will put more euros
in circulation, which would further dilute their value.
That
expectation has seen the euro face intense selling pressure in currency
markets, particularly against the dollar. The euro has fallen to
nine-year lows against the dollar and below its launch rate in 1999. As
the outlook for the euro has darkened, the cost for the Swiss central
bank of defending the peg by buying euros or selling francs has risen.
Though the timing of the Swiss decision proved a surprise, most foreign
exchange experts thought the peg would have to be abandoned, just as
previous such efforts had.
The scale of the
Swiss central bank's task was evident in the franc's movements in the
markets after it abandoned the peg. In some of the most dramatic moves
seen in currency markets for decades, the euro plunged a stunning 30
percent against the franc in the minutes after the decision. It has
since recovered somewhat to trade 13 percent lower at 1.04 francs.
It
wasn't just the euro that got caught up in the franc's frenzied moves.
The dollar plunged by a similar amount, though it also recouped some of
its kneejerk losses to trade 15 percent lower 0.8884 francs. "Switzerland suddenly got a whole lot more expensive," said Michael Hewson, senior market analyst at CMC Markets.
Many
analysts thought the decision was inevitable in light of next week's
expected announcement by the ECB to break new ground in its efforts to
inject life into the ailing 19-country eurozone economy. Its stimulus
package is expected to be worth as much as 1 trillion euros ($1.17
trillion).
"The first thing it says is that the SNB clearly
expected to see a huge surge of inflows in the week ahead and saw little
reason to provide these buyers of francs with an artificially cheap
rate," said Simon Derrick, chief currency strategist at BNY Mellon.
The
Swiss central bank argued that the "exceptional and temporary" measure
to protect the Swiss economy was "no longer justified."
The peg,
which was introduced in Sept. 2011, was an attempt to halt the rise of
the franc — a traditional haven currency for investors — against the
euro at a time when the eurozone debt crisis was at its height.
The
strong franc was then particularly problematic for Swiss exporters, who
were forced to drastically cut prices to remain competitive.
Unsurprisingly,
Thursday's move prompted a painful 11 percent drop in Switzerland's
stock market as investors took fright at the worsening outlook for
Switzerland's traditional exporters, such as those selling chocolate or
ski holidays. And
as in the eurozone, there's a growing fear that the country will suffer
a sustained period of falling prices, or deflation. A stronger currency
makes imports cheaper, further dampening inflation — in the year to
December, prices fell 0.5 percent.
In an effort to
contain the franc's future appreciation and limit any damage to the
Swiss economy, the central bank also lowered a key interest rate — what
it charges commercial banks to deposit at the bank — to minus 0.75
percent from minus 0.25 percent. The hope is that it dissuades banks
from parking their cash at the national bank, opting instead to invest
in the Swiss economy.
However, many analysts think the franc
will continue to rise. The currency often gets bought up in times of
global uncertainty, and that's not going to change easily. The franc's
value will remain sensitive to developments around the world, including
the crisis in Russia and the oil market slump.
In a press
conference following the decision, the Swiss central bank's president,
Thomas Jordan, laid out the hope that the "huge overvaluation" of the
franc will not persist long.
"We assume that this situation will
correct itself," he said. "What we are now observing is a clear exchange
rate overshoot — the franc is clearly overvalued at these levels."
The Swiss trade union federation, SGB, warned that the central bank's decision could cost jobs and weigh on salaries.
"An
uncontrolled rise (of the franc) can be expected," the SGB said in a
statement. "Exporters (industry/tourism) that are already suffering from
the overvalued franc feel further pressure." - AP News.
'Like Christmas': Rush to cash in on soaring Swiss franc as lines swell at currency exchanges
"It's
like Christmas all over again!" enthused Vanessa, as she joined a
swelling queue outside a currency exchange office in downtown Geneva
Thursday.
The 28-year-old hospital orderly was one of many across Switzerland rushing to cash in on a soaring Swiss franc.
Minutes
after a shock announcement from the Swiss central bank that it was
abandoning the minimum rate of 1.20 francs against the euro, the safe
haven Swiss currency strengthened almost 30 percent to 0.8517 against
the common European currency before easing back to 1.0421.
"I
heard the news this morning. I'm so happy!" Vanessa, who refused to give
her last name, told AFP outside of one of many mobbed exchange offices
in Geneva.
She has reason to be ecstatic: she is one of some
280,000 people working in Switzerland but living and paying bills in
eurozone countries France, Germany or Italy.
These so-called
"frontaliers", or border-crossers, are the biggest winners in Thursday's
Swiss franc surge, seeing their incomes jump 30 percent in the blink of
an eye.
Vanessa said she was contemplating "changing all of my Swiss franc savings into euros".
Other frontaliers were also celebrating Thursday, but said they would not immediately buy large amounts of euros. - Panic buying? -
"For those of us living in France and working in Switzerland, this is great!" said Doina Bancila, a 40-year-old bank employee.
"But
I don't want to buy euros in a panic. I'll wait for next week or the
week after to see how the situation evolves," she told AFP.
Gaelle
Voisin, another resident of France, meanwhile said she had only learned
about the bonanza she had in store when she turned up at the exchange
office.
"I was really surprised to see all of these people here,"
said the 40-year-old radio presenter, adding she at first thought the
crowd was waiting to buy the latest copy of Charlie Hebdo, in tribute to
the 12 people killed in last week's attack on the satirical weekly's
Paris office.
"I was just going to do a simple exchange, and then
this. It's good for me, and for all the French people working in
Switzerland," she said.
Many Swiss residents were also rubbing
their hands over their booming currency, envisioning vacations abroad
and perhaps buying up cheaper real estate on the other side of the
border.
"This could mean we can take cheaper euro vacations ...
and if you want to buy a secondary home in France, this is a good
thing," 70-year-old wealth manager Charles Gutowski told AFP.
But,
he added, the Swiss central bank itself will loose a fortune, since it
has huge foreign currency reserves, and large Swiss companies will take a
beating. "This is going to cause a lot of trouble," he said.
Swiss
business leaders called the central bank's decision a disaster, with
banking giant UBS saying it would lead to a drop of 5 billion francs
worth of exports and knock 0.7 percentage points off overall output
growth.
"I am at a loss for words," Swatch group's boss Nick Hayek told news agency ATS. "What the SNB has sparked here is a tsunami."
The
Swiss watchmaking giant was the biggest loser on a Swiss stock exchange
bathed in red Thursday, with its shares sinking 16.4 percent.
The Swiss exchange's main SMI index lost nearly nine percent Thursday. - Yahoo.
Canadian banks are now stress-testing how their oil portfolios will withstand prices as low as US$35 a barrel
Canadian
banks are stress-testing their energy loan portfolios to see how they
would weather the price of oil falling as low as US$35 per barrel.
At
a conference in Toronto on Wednesday, the chief executives of Canada’s
largest banks said they don’t expect to sustain large losses from
clients in the sector, even if there is a sustained downturn extending
over the next couple of years. But the fallout could reach beyond the
oil patch and into consumer portfolios including credit cards, auto
loans, and lines of credit. - Vancouver Sun.
Oil price crash threatens the future of the North Sea oilfields
The
potential impact of the oil price slump on Scotland was underlined as a
leading energy expert warned on Wednesday that North Sea oilfields
could be shut down if the oil price fell by just a few more dollars.
The
rising sense of crisis about the plummeting price – which has fallen
60% in the last six months – prompted the Scottish government to promise
an emergency taskforce to try to preserve jobs in the offshore energy
sector.
Meanwhile, Mark Carney, the governor of the Bank of
England warned that the Scottish economy was heading for a “negative
shock”. The oil industry consultancy Wood Mackenzie said that at the
current price for Brent blend, of $46 a barrel, some UK production was
already failing to break even, and further falls could endanger output.
Robert
Plummer, a research analyst with the firm, said that at $50 a barrel
oil production was costing more than its value in 17 countries,
including the US and UK. - The Guardian.
This Is Exactly How Markets Behave Right Before They Crash
When
the stock market starts to behave like a roller coaster, that is a sign
that a major move to the downside is right around the corner. As I have
stated repeatedly, when the market is very calm it tends to go up. But
when the waters start getting really choppy, that is a clear indication
that stocks are about to plummet.
In early 2015, volatility has
returned to Wall Street in a big way. At one point on Tuesday, the Dow
was up more than 300 points. But then the bottom dropped out. From the
peak on Tuesday, the Dow plunged nearly 700 points in less than 30 hours
before recovering more than 100 points at the end of the day. The Dow
has now experienced the longest losing streak that we have seen in 3
months, but that is not that big of a deal. Of much greater concern is
the huge price swings that we have been seeing.
Remember, the
three largest single day stock market increases in history were right in
the middle of the financial crisis of 2008. So if stocks go up 400
points tomorrow that is NOT a good sign. What we really need is a string
of days when stocks move less than 100 points in either direction. If
stocks keep making dramatic moves up and dramatic moves down, history
tells us that it is only a matter of time before they collapse. Any student of stock market history knows that what we are witnessing
right now is exactly how markets behave right before they crash.- TEC.
January 15, 2015 - RUSSIA - Russian gas transitto Europe via Ukrainewill be stopped. This was announced bythe headof "Gazprom"Alexei Millerafter a meeting withthe Deputy Chairman ofthe CommissiononEnergosoiuzMaroš Šefčovič.The head ofthe Russian companyannounceditsnew strategy, whichmust be takenbecause of thenew energy policyof the European Union. Now theUkrainiangas transportation systemis the main channelfor Russian gas suppliesto its maincustomer -the European Union.We are talking aboutavolume of63 billion cubic metersper year.Totalin 2013"Gazprom"has soldto Europe161.5billioncubic meters of gas. In 2014, according to preliminaryestimates, thevolume of shipmentsfellby about10 percent.The remainingvolumesare suppliedbypipeline runningthrough Belarus, Turkey and the"Nord Stream" (under the Baltic Sea toGermany).
Europein the coming yearsplans to createEnergy Unionandactas a singlebuyerin the globalgas market."Gazprom"will adapt tothis policy, announced Alexey Miller.Butstressed that the project"South Stream" is now permanently closed. And ifEurope wants tobuy Russian gas, it will have tobuild their ownpart of the pipelineto Turkey, which will be held onthe new Russiangas pipelineinstead of"South Stream".
"Pipeline" TurkishStream "is the only route by whichcan be delivered63 billion cubic metersof Russian gasgoingnow whilein transit through Ukraine. No other options. Our European partnersare informedabout itand now theirtask is to createnecessary infrastructureto the borderof Turkey andGreece", - said the headof" Gazprom ". - RGRU. [Translated]
Gazprom announces final nail in the South Stream coffin
RIA Novosti / Ramil Sitdikov
Europe
will have to get gas via Turkey or Ukraine, there will be no direct
transcontinental pipeline to Europe, Gazprom has confirmed. It is
disappointing news for Bulgaria, which was hoping to get gas directly
from Russia, and not via Ukraine.
Gazprom CEO Aleksey Miller made
it clear that Turkey, and not Bulgaria, will become the main gas valve
between Russia and Europe. “South Stream is dead. For Europe
there will be no other gas transit options to risky Ukraine other than
the new ‘Turkish Stream’ pipeline,” Miller said Wednesday, as reported by RIA Novosti.
"Now, the ‘Turkish Stream’ on the agenda," he emphasized.
EU
Energy Commissioner Maros Sefcovic was in Moscow Wednesday to discuss
EU energy security and the fate of South Stream with Miller and Russian
Deputy Prime Minister Arkady Dvorkovich.
Gazprom's decision to
create ‘Turkish Stream’ will damage to the company’s image, according to
the Energy Commissioner Maros Sefcovic.
Ahead of the meeting, Bulgaria expressed optimism that it would reach a solution with Moscow on South Stream.
In
the wake of the South Stream closure, the European Commission is
supporting Bulgaria’s proposal to build a gas storage hub. At present
Bulgaria only has a big enough gas hub to hold 2 months’ consumption. “I
really hope we’ll be able to find the right solution, especially after
the visit to Moscow; the right solution as far as the gas hub is
concerned or the continuation of the work on South Stream,” Bulgarian Prime Minister Boyko Borisov said in Brussels on Tuesday, Bloomberg News reports.
Russia stopped deliveries to Europe in 2006 and 2009 over disputes with Ukraine.
Gazprom chairman of the board Alexei Miller, center, and heads of
shareholding companies are in Anapa at the launching ceremony of South
Stream gas pipeline construction, 7 December 2012. (RIA Novosti / Sergey
Guneev)
Bulgaria
lost more than 6,000 new jobs and over $3 billion of investment with
the cancellation of the project. The country also receives 90 percent of
its gas imports from Russia, the majority of which crosses through Ukraine, which is seen as an energy risk.
The parties agreed to hold a future trilateral meeting between Russia, EU, and Ukraine in Sofia.
Aleksey Miller said that transit risks in Ukraine are not over, even though Kiev has managed to pay its debt
and resume gas flows, after a 6-month hiatus. At present, Ukraine
hasn’t stored up enough in its underground storage reserves, according
to the Gazprom head.
Russia pulled the plug on the project to
Europe in December after standoffs with Brussels over the placement of
the pipeline in Bulgaria, the first land section of the pipeline. It
would have pumped 63 billion cubic meters of gas to Europe annually.
Russia
will instead build an alternative pipeline using funds and materials
intended for the original South Stream project. Europe will have to buy
gas at the Turkish border. It will across the Black Sea to Turkey and be
able to pump 63 billion cubic meters a year. - RT.
January 15, 2015 - THE PHILIPPINES
- Tropical Storm Mekkhala continues to head toward the Philippines,
putting the country at risk for heavy rain and gusty winds for the
weekend.
Mekkhala started out as a cluster of showers and thunderstorms earlier in the week but became organized enough to acquire tropical depression status on Tuesday, south-southwest of Guam.
While development occurred away of Guam, rain on the northern edge of the storm brought downpours to Guam and the southern Mariana Islands on Tuesday.
Further strengthening occurred during the midweek and the system is now a tropical storm.
A general west-northwest track is expected which would take the strengthening cyclone in the direction of the Philippines.
WATCH: Tropical Storm Mekkhala Forecast.
Impacts for the Philippines are expected to begin as early as Friday night and continue through the weekend as the storm nears the central Philippines.
Pope Francis will be making a tour across parts of the Philippines from Thursday through Monday, and although his itinerary is already laid out, this storm could force changes to the schedule.
Some of the worst impacts for eastern Visayas are likely from Saturday into Saturday night, the same time Pope Francis is scheduled to make several appearances in the region.
Landfall is possible in Samar, one of the areas hardest hit by former Super Typhoon Haiyan, locally known as Yolanda. Pope Francis will be visiting eastern Visayas to interact with people who were severely impacted by this tragedy only a little more than a year ago.
As the cyclone approaches the Philippines, a slight turn to the north is possible; however, impacts from the storm would still be likely across eastern Visayas and Luzon.
While moderate wind shear will limit the strength of this tropical system; however, some strengthening is possible before reaching the Philippines.
Rainfall of 100-200 mm (4-8 inches) will likely create flooding problems in parts of eastern Visayas and Luzon while wind gusts to near 80 kph (50 mph) remain a possibility, according to Meteorologist Anthony Sagliani.
Areas from eastern Visayas into Luzon are at greatest risk for flash flooding and mudslides, while the southern Philippines will likely see no widespread impacts from this storm.
While this cyclone is not expected to become a large and devastating typhoon, life-threatening impacts are possible. Travel may also be hindered with flooded roadways and flight cancellations likely over the weekend. - AccuWeather.
January 15, 2015 - JAPAN-
For pumping water groundwater observation hole No.1-12 taken on January
12, cesium 134, cesium 137, cobalt 60 and total beta value is higher as
compared with the previous value, the maximum value previously is
detected.
Cesium-134: 140 Bq/L [~7,500% above Jan. 5 level; new record high]
Cesium-137: 470 Bq/L [~7,500% above Jan. 5 level; new record high]
Cobalt-60: 1.9 Bq/L [Quadruple previous record high set in 2013]
Note
that observation hole No. 1-12 is near the Unit 2 trench which is
filled with thousands of tons of highly radioactive water. Tepco is
attempting to seal the trench, but has failed to do so.
January 15, 2015 - EUROPE - On the heels of several windstorms, another blast of wind will sweep across northern Europe through Thursday.
The source of the high winds is a strengthening area of low pressure that will pass by northern Scotland Thursday and head towards Scandinavia Thursday night.
Strong winds blasted through Wednesday night with gusts reaching 87 km/hr (54 mph) in Dublin. Winds will continue to be gusty across Ireland and the United Kingdom Thursday afternoon which is where the greatest threat for damaging wind will be.
Widespread wind gusts of 65-80 kph (40-50 mph) are expected with isolated gusts over 100 kph (62 mph). Coastal Ireland, Wales and southwest England could potentially see gusts upwards of hurricane force.
In London, England, despite the strongest winds coming Wednesday night, there will still be a threat for high wind through Thursday afternoon. Gusts to near 60 kph (35-40 mph) can cause minor damage to homes and businesses, down trees and cause also power outages.
Another day of travel delays are likely due to the high winds, especially for rail service. Strong cross winds will also cause dangerous travel by road, especially for lorries and other large vehicles.
With the system passing by, showers will develop in the wake of the low across the United Kingdom. Meanwhile in the higher terrain of Scotland, heavy snow will fall. The snow, combined with powerful winds, will result in blizzard conditions at times through Thursday afternoon.
After soaking the United Kingdom Wednesday night, a band of heavy rain associated with the system will continue to march eastward across northern Europe. The threat for heavy rain and gusty winds will extend into Denmark, northwest Germany, Belgium, France, and Portugal.
According to AccuWeather.com Meteorologist Tyler Roys, cities that will be impacted through Thursday afternoon include Amsterdam, Brussels, Luxembourg, and Paris.
WATCH: Raw - Massive waves cause oil rigs to bounce off the coast of Scotland.
Areas of Europe could face peak wind gusts of 80-100 kph (50-60 mph) through Thursday night, especially along coastal areas.
While widespread damaging wind gusts will become more isolated farther inland, locations such as Hamburg could experience wind gusts of 65-80 kph (40-50 mph) during the height of the storm.
The storm system bringing these strong winds will weaken and move into Scandinavia through the end of the week. While wind will not be as strong later in the week, the storm system will have far-reaching effects as a gusty wind will remain across much of northern and central Europe in the wake of the storm. - AccuWeather.
January 15, 2015 - SPACE
- A large asteroid about a third of a mile wide will zoom safely by
Earth this month, and mark the planet's closest encounter with a space
rock of its size until 2027.
The asteroid 2004 BL86 will fly by Earth on Jan. 26, passing at a range of about 745,000 miles (1.2 million kilometers), about three times the distance between the Earth and the moon. It will be the asteroid's closest approach to Earth for the next 200 years, according to NASA scientists.
Asteroid 2004 BL86 is nearly 1,800 feet (549 meters) in diameter, but there is no risk of it hitting the Earth when it zips by. The next asteroid of similar size to come near Earth will be the asteroid 1999 AN10, which will make its closest approach in 2027, according to the NASA statement.
"While 2004 BL86 poses no threat to Earth for the foreseeable future, it's a relatively close approach by a relatively large asteroid, so it provides us a unique opportunity to observe and learn more," Don Yeomans, of NASA's Near Earth Object Program Office at the Jet Propulsion Laboratory in Pasadena, California, said in a statement.
The 1,800-foot-wide asteroid 2004 BL86 will make its closest approach to Earth for the next 200 years on Jan. 26, 2015. This NASA graphic shows the position of the asteroid in relation to Earth as they will appear on Jan. 19. NASA/JPL-Caltech
Astronomers will track asteroid 2004 BL86 with radar during its flyby by using the massive dish-shaped antennas at NASA's Deep Space Network in Goldstone, California, and the Arecibo Observatory in Puerto Rico. These radio dishes will beam microwave signals at the asteroid, which will then bounce off the target, and return to Earth.
The resulting radar "echo" looks like a sonogram and can reveal details about the asteroid's three-dimensional shape, its rotation and even its internal density. Although this method has detected echoes from about 200 near-Earth asteroidsbefore, no two are the same.
"At present, we know almost nothing about the asteroid, so there are bound to be surprises," said JPL astronomer Lance Benner, who is the principal investigator for the Goldstone observations of the asteroid.
Astronomers first detected the asteroid on Jan. 30, 2004, with the 1-meter LINEAR telescope in New Mexico. At its closest approach, it’s expected to be observable from the Northern Hemisphere with small telescopes and strong binoculars.
"I may grab my favorite binoculars and give it a shot myself," Yeomans said. "Asteroids are something special. Not only did asteroids provide Earth with the building blocks of life and much of its water, but in the future, they will become valuable resources for mineral ores and other vital natural resources. They will also become the fueling stops for humanity as we continue to explore our solar system. There is something about asteroids that makes me want to look up."
But if you prefer to not brave the cold weather, you can always watch it online via the Virtual Telescope Project in Italy. - Yahoo.
January 15, 2015 - UNITED KINGDOM
- A woman suspected of having Ebola is being tested for the virus at a
hospital in Northampton, in central England. The patient has not yet
been named and no details of how she might have contracted Ebola have
been revealed. “A patient with a suspected case of Ebola was admitted to Northampton General Hospital this evening,” a hospital spokesman said Wednesday. “We
are confident that all appropriate actions are being taken to protect
the public's health and ensure there is no risk to patients or staff.”
The patient has tested negative for malaria, and an Ebola test is being carried out as a precaution.
According to Public Health England, it is very unlikely she has contracted the virus. “Ebola is considered unlikely but testing is being done as a precaution, as is our usual practice in these circumstances,” PHE said in a statement.
British
nurse Pauline Cafferkey, who contracted Ebola while working for the
charity Save the Children in Sierra Leone, is currently being treated in
an isolation unit at the Royal Free Hospital in London.
Reuters/Amr Abdallah Dalsh
The
hospital has said she is no longer in critical condition. Cafferkey,
39, became the first person to be diagnosed in Britain with the disease
last month.
She is reportedly being treated with blood from
the UK’s first Ebola victim, nurse William Pooley, who was diagnosed
with the virus while working in Sierra Leone.
There is no proven
cure or approved vaccine for the virus – only experimental drugs such as
ZMapp, which helped Pooley recover. Pharmaceutical giants
GlaxoSmithKline and Johnson & Johnson are currently expediting human
trials of vaccines.
The global death toll from the Ebola
epidemic had reached 8,429 out of 21,296 reported cases since its
outbreak in March 2014, according to the World Health Organization
(WHO).
Meanwhile, Medecins Sans Frontieres has opened its first
Ebola treatment center specializing in care for infected pregnant women
in Sierra Leone’s capital, Freetown.
The medical charity said the
mortality rate for expectant mothers is extremely high, and health
workers treating them, particularly during childbirth or miscarriage,
are at an especially high risk of contracting Ebola. - RT.
January 15, 2015 - EARTH - The following constitutes the new activity, unrest and ongoing reports of volcanoes across the globe.
Hunga Tonga-Hunga Ha'apai volcano (Tonga, Tonga Islands): Disrupts more flights
Ash erupting from the volcano off Tonga in the South Pacific. Photo / Matangi Tonga
Further volcanic eruptions have disrupted more flights to and from Tonga this evening.
In
the third day of flight disruptions, Air New Zealand confirmed that a
return service scheduled for this evening has been postponed due to
volcanic activity.
The eruption of the Hunga Tonga-Hunga Ha'apai
underwater volcano, which is about 63km north of the kingdom's capital
city, Nuku'alofa, spewed a plume of ash 9km into the sky, disrupting air
travel to and from Tonga since Tuesday.
It left hundreds of travellers and holidaymakers stranded.
Today
Air New Zealand ran two return services between Auckland and Tonga, the
airline said. One was the carrier's regularly scheduled service, and
the second was an additional service scheduled to fly those left
stranded by the ash cloud.
Volcanic ash plume from the Hunga Haapai volcanic eruption (VAAC Wellington)
"A second additional service that was
scheduled to depart for Tonga this evening has been postponed due to
volcanic activity and now has a scheduled departure time of 8am
tomorrow," the airline said.
Meanwhile, the deputy secretary at
the Ministry of Lands and Natural Resources, Taaniela Kula, said the
recent eruptions were from a new vent close to Hunga Ha'apai.
"The size of the vent is about 400 to 500 metres wide and the depth of the vent is down to 90 metres," Mr Kula told One News.
It was fairly active, erupting every five minutes with ash flying up to 500 metres, he said.
The volcanic material had formed a new island more than a square kilometre in size - bigger than Hunga Ha'apai, One News reported.
Pacaya volcano (Guatemala): New activity
Weak incandescent spot, but no degassing from Mackenney crater on 8 Jan 2015
(Landsat 8 image / processed by Rudiger Escobar Wolf @rudigerescobar / twitter)
The
volcano is becoming active again. In a special bulletin yesterday,
INSIVUMEH reported that ash emissions occurred from the volcano.
Seismicity has been above normal and elevated temperatures were measured at the Mackenney crater, but also, surprisingly, at the older Cerro Chino cone ( north of the former one). Whether this is the precursor of a stronger eruptive phase in the near future cannot be predicted, but is a possibility and would not be surprising, given that the volcano is one of Central America's most active.
A satellite image from 8 January already indicates the presence of a thermal anomaly at the Mackenney crater, but did not show any degassing.
Ash
emissions continue. A stronger phase of activity last night produced a
plume at estimated 7,000 ft (2.1 km) extending 25 km to the southeast.
(Darwin VAAC)
Map showing the location of the lava flow near Pahoa as of January 6, 2015 (HVO/USGS)
HVO
reports that "the tip of the June 27th lava flow remained stalled;
however, active surface breakouts up slope of the front continued.
A
narrow flow lobe about 2.5 km (1.6 mi) upslope of Pahoa Marketplace
continued to advance toward the north-northeast. This morning, Civil
Defense reported that this lobe has advanced about 14 m (15 yds) since
yesterday."
Bardarbunga volcano (Iceland): Eruption continues with little changes
Map of the Nornahraun lava field as of 10 Jan 2015 (Univ. Iceland)
Lava effusion continues at high rates and enlarges the lava field, now covering more than 84 square kilometers.
It has crossed the track Dyngjufjallaleið and stretched onto the older lava of Þorvaldshraun.
Lava
is mainly flowing through a closed channel to the eastern edge of the
lava field, about 15 km from the crater. Another tube system is
transporting lava to the northern part.
Seismicity under the
Bardarbunga central volcano's caldera remains strong. Subsidence of the
caldera continues as well, at approx. 25 cm per day.
Fogo volcano (Cape Verde): Eruption seems to be ending
The
eruption seems to be coming to an end. There are no new reports of lava
effusion or explosive activity at the vents since 8 January, when small
strombolian explosions could still be observed.
Gas emission
measurements show a clear decreasing trend as well, but it is still too
early to declare the end of the eruption because the possibility of a
new batch of magma rising from depth cannot be ruled out yet.
Eruptive
activity, strombolian explosions from the summit vent, has picked up
during the past 1-2 days. A lava flow is now active on the southeastern
flank and ash plumes have been reaching 28,000 ft (8.5 km) altitude.
KVERT raised the volcano's alert level to orange.
Glow from the lava flow on Klyuchevskoy volcano yesterday
MODIS thermal image of Klyuchevskoy on 9 Jan 2015
Incandescent
material from the explosive summit activity is ejected to several
hundred meters above the crater. Relatively intense ash emissions have
been causing ash fall in up to 30 km distance to the west of the
volcano.
Minor
activity persists at the volcano. A thermal anomaly over Chirinkotan
was detected in cloud-free satellite images on 30 December. Aviation
Color Code remains at Yellow.
PVMBG
reported that during 1 November-5 January white plumes rose at most 1.5
km above Slamet's crater. RSAM values fluctuated but decreased overall
in December through 5 January.
Deformation and geochemical data
showed no significant changes. The Alert Level was lowered to 2 (on a
scale of 1-4) on 5 January. Residents and tourists were warned to not
approach the crater within a radius of 2 km. (Smithsonian / USGS Weekly
Volcanic Activity Report 31 December 2014-6 January 2015)
Tangkubanparahu volcano (West Java, Indonesia): Activity update
The
volcano was placed on higher alert level (2 on a scale 1-4) on 31 Dec,
as signs of volcanic unrest have recently been increasing (deformation,
seismic activity).
An exclusion zone of 1.5 km radius around the crater is in place.
Seismicity
at the volcano remains slightly elevated, but no signs of significant
activity have been noted recently, only some steam emissions were
observed occasionally. AVO maintains Aviation Color Code "Orange" and
Volcano Alert Level "Watch".
Fuego volcano (Guatemala): Strong explosions
During the past days, explosive activity has been relatively intense at the volcano.
Strong explosion at Fuego volcano
Ash plume from an eruption at Fuego
Strong strombolian-type explosions have been occurring at rates of 6-8 per hour, sometimes ejecting incandescent bombs to more than 1000 m above the crater and producing glowing avalanches. Some of these reached the vegetation and caused small fires.
Ash plumes rose to 1-1.5 km above the crater and drifted 10-15 km to the west and southwest.
