CRIMINAL CAPITALI$M

The Archegos meltdown will result in a $10 billion loss for global banks, JPMorgan says

ilee@insider.com (Isabelle Lee) 

4/12/2021

© Matteo Colombo/Getty Images Big Tech recovers after a rough day Wednesday on Wall Street. Matteo Colombo/Getty Images

Global banks are expected to lose up to $10 billion from the Archegos meltdown, JPMorgan said.

This is 5x the normal loss level for a collateralized daily mark-to-market business, JPMorgan added.

It however cited three lessons the industry could take away from the implosion that has roiled the markets.

Global banks are expected to lose up to $10 billion following the Archegos Capital Management meltdown, JPMorgan said Monday - raising its estimate from an initial $2 billion-$5 billion - with Credit Suisse Group and Nomura Holding hardest hit.

"One line of argument which could explain why the scale of losses suffered by [Credit Suisse] and Nomura was higher could be a higher level of leverage extended by these banks compared to [Goldman Sachs and Morgan Stanley], which seem to have suffered smaller losses if any," JPMorgan analysts led by Kian Abouhossein said in a research note Monday.

JPMorgan clarified that there may also be additional considerations that determined the sizable difference between the scale of losses suffered, such as the timing of the sale of positions, among others. Nonetheless, the entire episode affects the industry overall, given that global banks could end up losing five times the normal loss level for a collateralized daily mark-to-market business.

JPMorgan cites three lessons the industry could take away from the fund's implosion.

First, investment banks in general are in better shape today and are more focused on high-volume execution platforms.

"There is no excessive leverage in the [investment banking] or [private banking] industry," JPMorgan said. "Although [private banking] leverage has been increasing, it is nowhere near prior peaks."

The bank also said it sees no excessive equity-swap growth, a simple instrument all parties will benefit from.

Second, US regulatory frameworks like Basel III and the Dodd-Frank Act have improved the risk profile of investment banks. JPMorgan, however, noted that there is still weak oversight for non-bank entities, especially when it comes to family offices.

Archegos, a family office founded in 2012, did not have to disclose investments, unlike traditional hedge funds. JPMorgan also pointed to the lack of transparency when it came to equity-swap filings.

The Archegos sell-off exposed the fragility of the financial system, especially those involving lesser-known practices such as total return swaps, a derivative instrument that enabled Bill Hwang's office not to have ownership of the underlying securities his firm was betting on and the secrecy of family offices. Typically, family offices enjoy the "private adviser exemption" provided under the Advisers Act to firms as these usually advise less than 15 clients, among other conditions.

But JPMorgan said, "filing requirements would have applied to Archegos given its sizable exposure to some US securities. However, the fact that Archegos did not file with the [Securities and Exchange Commission] can be explained by the usage of total return swaps, which seems to be the primary method through which the sizable positions were built by Archegos."

Dan Berkovitz, a Democratic commissioner on the Commodity Futures Trading Commission, denounced family offices and their ability to skirt some oversight.

"A 'family office' has nothing to do with ordinary families," he said in a statement on April 1. "Rather, it is an investment vehicle used by centimillionaires and billionaires to grow their wealth, reduce their taxes, and plan their estates."

Third, JPMorgan said private banks, specifically those linked to Archegos, moving forward could improve their onboarding, especially with clients with backgrounds such as Hwang, who has run into trouble in the past. Private banks could also strengthen their risk management by giving less leverage to non-transparent family offices with concentrated positions and ensure checking the clients' rehypothecation risk, among others.

Archegos in late March used borrowed money to make large bets on some stocks until Wall Street banks forced Archegos to sell over $20 billion worth of its shares after failing to meet a margin call. Hwang grew his family office's $200 million investment to $10 billion. Reports say the former Tiger Management trader lost $8 billion in 10 days.

Read the original article on Business Insider

Progressive group targets FedEx, Nike in campaign calling for higher corporate taxes

Brian Schwartz 
4/12/2021

A progressive group pushing Congress to raise the corporate tax rate is launching an ad campaign targeting FedEx and Nike, two large American companies with light federal tax bills.

Tax March, which held dozens of demonstrations in 2017 calling on former President Donald Trump to release his tax returns, plans to release ads targeting FedEx on Tuesday.
Tax March also plans to target Nike with a newspaper ad next week in the shoe giant's home state of Oregon.

© Provided by CNBC A FedEx employee loads up deliveries in San Francisco.

A progressive group pushing Congress to raise the corporate tax rate is launching an ad campaign targeting FedEx and Nike, two large American companies with light federal tax bills, the group said Monday.

Tax March, which held dozens of demonstrations in 2017 calling on former President Donald Trump to release his tax returns, plans to release ads targeting FedEx on Tuesday. The TV ads will air in Washington, D.C., and in Memphis, Tennessee, where FedEx is headquartered.

A report by the Institute on Taxation and Economic Policy says FedEx "zeroed out its federal income tax on $1.2 billion of U.S. pretax income in 2020 and received a rebate of $230 million." The report says the lack of payments in taxes by some corporations is likely linked to historic tax breaks as well as Trump's 2017 tax reform plan and certain elements of the coronavirus relief bill known as the CARES Act.

Tax March also plans to target Nike with a newspaper ad next week in the shoe giant's home state of Oregon, according to Dana Bye, the campaign director for the group. She said the newspaper ad will have a message similar to that of the TV spot focusing on FedEx.

The institute's report said Nike "didn't pay a dime of federal income tax on almost $2.9 billion of U.S. pretax income last year, instead enjoying a $109 million tax rebate."

Representatives for Nike and FedEx didn't respond to CNBC's request for comment before this story was published.

President Joe Biden has said he wants to raise the corporate tax rate to 28% to help pay for his $2 trillion infrastructure reform package. He has since said that he's willing to negotiate on the potential corporate tax hike as moderate Democrats such as Sen. Joe Manchin, D-W.Va., have pushed back on raising the rate to 28%.

Bye said the campaign as a whole will cost almost $500,000. It will also include digital ads on Facebook and other platforms.

The TV ad, first reviewed by CNBC, takes aim at FedEx as one of several companies that paid little to no federal corporate income taxes recently.

"Tell Congress: It's time to put the people first," a voiceover on the FedEx ad says. "Make corporations like FedEx pay their fair share."

FedEx recently told CNBC that it is against raising corporate taxes as way to pay for Biden's infrastructure plan. Advocacy groups such as the Chamber of Commerce and the Business Roundtable have also opposed the idea of raising the corporate tax rate as a way to pay for infrastructure.

"I think the biggest statement we are trying to make through this campaign is that we can't let corporate tax dodgers like FedEx drive the debate on taxes," Bye said.

Tax March is a project of the Sixteen Thirty Fund, a dark money 501(c)(4) organization that contributed just over $60 million to Democratic-aligned groups during the 2020 election, including millions to super PACs backing Biden, according to data from the nonpartisan Center for Responsive Politics.

The campaign by Tax March is one of the first to take on corporations since Biden became president. It comes as corporations are under pressure to respond to new voting laws such as those recently passed in Georgia.

A Nobel-prize winning economist says the wealthy will just find a way to dodge any wealth tax

insider@insider.com (Juliana Kaplan) 

© Provided by Business Insider British-born economist Angus Deaton of Princeton University answers questions in a news conference after winning the 2015 economics Nobel Prize in Princeton, New Jersey, October 12, 2015. REUTERS/Dominick Reuter

Nobel Prize-winning economist Angus Deaton said a one-off wealth tax is a "bad" way to pay for the pandemic.

Without addressing its morality, Deaton told Bloomberg it would be hard to implement and the rich would avoid it.

One-off wealth taxes have been gaining traction recently, and even the IMF has endorsed them.

Wealth taxes have become an increasingly prominent topic as inequality surges in the wake of the coronavirus pandemic, when the world's billionaires tacked $4 billion onto their net worths while 54 million people fell out of the global middle class.

One possible solution, touted by everyone from an Oxfam report on inequality to the International Monetary Fund to Sen. Elizabeth Warren: A tax on the wealthiest members of society.

But a Nobel Prize-winning economist famous for his work on inequality has raised concerns about using a wealth tax to pay off pandemic costs. The problem: He thinks the wealthy will try to dodge it.

In an interview with Bloomberg, Angus Deaton said wealth taxes would not only be difficult to implement, but would give the ultrawealthy incentives to avoid it. "And avoid it they will," he said.

Billionaire Leon Cooperman said as much in an interview with CNBC while discussing Warren's proposed wealth tax. "If the wealth tax passes, go out and buy yourself some gold because people are going to rush to find ways of hiding their wealth," Cooperman told CNBC.

Concerns over implementation have been a major talking point in wealth tax discussions. Another is the myriad ways that the ultrawealthy use to hide their wealth and assets from taxation.

A recent study from the IRS and economists found that America's richest seem to have been hiding billions from the agency. The US, where Warren has been continually pushing for a more permanent wealth tax to address inequality, has become a leading tax haven for the world's richest.

One-off wealth taxes have gained traction recently

Deaton is a famed scholar of inequality. As Bloomberg reports, he's currently leading an expert panel in the UK that's aimed at reducing inequality. In December, another panel in the UK - the Wealth Tax Commission - recommended a one-off tax on the UK's wealthiest residents. They said that a a 1% tax for five years on individual wealth over £500,000 could raise £260 billion (around $357 billion).

The IMF recently recommended one-off wealth taxes as a way to help improve the global rebound; one such tax has already been implemented in Argentina.

Deaton said that if implemented, any one-off wealth tax would likely become permanent. He also cautioned against cutting social services in the UK, pointing to the negative impacts of austerity after the financial crisis. He declined to comment further to Insider.

In the US, President Joe Biden hasn't seemed to favor an explicit wealth tax, although he's currently trying to increase the tax rate for corporations and has said taxes will go up for the $400,000 and above income bracket.

"I'm not trying to punish anybody, but damn it, maybe it's because I come from a middle-class neighborhood, I'm sick and tired of ordinary people being fleeced," he said in a speech defending his proposal to increase the corporate tax rate to 28%.

Universal child care could boost women’s lifetime earnings by $130 billion—and ensure more stable retirement options

Megan Leonhardt 

CNBC 4/12/2021

Since last February, over 2.3 million women have dropped out of the workforce, compared to just 1.8 million men who left the labor force between February 2020 and 2021, according to data compiled by the National Women's Law Center. And many of those women are still unemployed because they are caring for children who are not in school or daycare.

© Provided by CNBC

New research from Columbia University and the National Women's Law Center finds that a universal child-care system — one that provides affordable, reliable child care from birth to age 13 — would not only help many of those out-of-work employees get back into the workforce, but would also dramatically increase the lifetime earnings and security of women across the country.

An average woman with two children could see a $97,000 increase in her lifetime earnings under universal child care, according to the report. Collectively, about 1.3 million women in the U.S. could experience about a $130 billion boost in income over their lifetimes.

Overall, the number of women working full-time would increase by 17% if the U.S. expanded access to stable and consistent child care. The number of women working without a college degree would jump by about 31%.

"When there's an increased investment in child care, there's a measured increase in women's labor force participation," says Melissa Boteach, vice president of income security and child care/early learning at the National Women's Law Center. The highest gains can be seen for women in their 30s and 40s, since those are the decades when women are most likely to raise children, she adds.

This increase in workforce participation and lifetime earnings could also lead to a significant impact on women's retirement situations, the report finds. Women would have an additional $20,000 in private savings on average and about $10,000 more in Social Security benefits. That adds up to about $160 per month in additional funding in retirement, the report finds

.

© Provided by CNBC

Those extra earnings could especially help improve the financial situations of older women, who are more likely to experience poverty later in life than men. "Senior women have significantly higher poverty rates than senior men because of all the discrimination and all of the financial challenges that compound over their lives [and] stick with them in retirement," Boteach adds.

But child-care reform could reduce poverty among senior women by about 21%, the report finds.

The report's projections are based on a model of universal child care that provides stable and consistent care to children from birth to age 13. Under the model, child-care costs would not exceed 7% of a family's annual income and child-care workers would earn a livable wage rather than the pre-pandemic average of $11.65 an hour.

These policies would dramatically impact low-income women and women of color. Currently, women who earn lower incomes typically spend about a third of their take-home pay on child care, Boteach says. That can affect a family's choices around whether one or both parents work. If a parent needs to stay at home or reduce their hours to care for children, it's generally going to be the woman, she explains.

When talking about economic solutions that will improve the workforce and reduce poverty, child care is probably not top of mind, Boteach says. But the findings show that child care is an economic driver that can be used to improve financial stability throughout women's lives.

"If we start with this generation of women and start investing in their ability to be breadwinners and caregivers, then you will see the fruit of that 30 years from now," Boteach says.

CNBC VIDEO WOMEN AND WORK INTERVIEW WITH (D) REP KATIE PORTER

22.00 MINUTES

https://wus-streaming-video-msn-com.akamaized.net/6ab08f0a-88f2-4b27-8485-1d0af22bcae6/c345b761-5c11-43ab-9635-4df9cbfe_2250.mp4

It's time to declare a national climate emergency

Rep. Earl Blumenauer (D-Ore.), opinion contributor 

THE HILL 4/12/2921

This month, President Biden will convene 40 world leaders to discuss the urgency of climate action and strengthen global cooperation on key climate goals. But before the president takes the global stage at the Leaders Summit on Climate, there's something he should do at home: declare a national climate emergency here in the United States.

© Getty Images It's time to declare a national climate emergency

In recent years, we have seen the effects of the climate crisis, both in our own backyard and around the world. From wildfires raging across Oregon and the West, to hurricanes wreaking havoc in the southeast, and increasing average temperatures everywhere in between, the impacts have been devastating.

The severity of the crisis necessitates bold action. And the scientists and experts have been clear: If we do not adequately address this climate emergency now, the impacts will only become more catastrophic.

Despite the other challenges facing our country, the Biden administration has done an admirable job of prioritizing climate action in the first months of his administration. After years of practiced ignorance from former President Trump and congressional Republicans, however, an even larger mobilization is needed.

That's why I've taken steps - alongside Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Bernie Sanders (I-Vt.) - to mandate a national climate emergency. By directing the president of the United States to declare a national climate emergency, our National Climate Emergency Act will ensure every resource is at the country's disposal to halt, reverse, mitigate and prepare for the consequences of this climate crisis.

This could not be more important, as the climate crisis is connected to, and exacerbates, almost every other crisis we are currently dealing with. Of course, we cannot ignore that the current and lasting effects of climate change are disproportionately impacting Black, Indigenous and other communities of color.

Fighting the climate crisis means fighting racial injustices. Fighting the climate crisis means fighting public health injustices. And fighting the climate crisis means combatting economic injustices.

Declaring a national climate emergency is more than just a symbol of our commitment to this fight. It will literally unlock the tools needed to get the job done. This includes the ability to invest in large-scale mitigation and resiliency projects, such as public infrastructure to expand access to clean and affordable energy, and the opportunity to develop and transform the industrial base of the U.S. while creating high-skilled family-wage jobs.

As we look ahead to this month's summit, I'm thrilled that the new administration wants the United States to once again lead the global fight against climate change. But right now, other countries are taking greater steps than we are.

In fact, 38 individual countries have already declared a climate emergency. Many of the leaders invited to Biden's upcoming climate summit represent those countries, including President Emmanuel Macron of France, Prime Minister Justin Trudeau of Canada, and President Moon Jae-in of the Republic of Korea.

If we are going to encourage stronger climate action across the globe, it's important that we also take every possible step to combat the climate crisis here at home. That includes a national climate emergency declaration.

After four years of Trump's environmental recklessness, it's a relief to see Biden's real commitment to a whole-of-government response to the climate crisis. His American Jobs Plan centers climate action in our infrastructure conversation. It also includes some of my environmental legislative priorities, such as the elimination of tax preferences for fossil fuels that will help spur investments in clean energy technologies and a reinstatement of the Superfund tax that will finally shift the cleanup responsibility at toxic and hazardous waste sites back to polluters.

Our National Climate Emergency Act, which mandates the declaration of a climate emergency, is in line with all of this. Not only will it lay the necessary framework for countless other actions we will take, but it will put us in line with the very allies we're hoping to motivate and encourage in the fight against the climate crisis.

Before Biden takes the global stage, let's take a stand at home. The time is now to declare a national climate emergency.

Blumenauer, a Democrat, represents Oregon's 3rd District in the U.S. House of Representatives. He is the author and primary sponsor of the National Climate Emergency Act.

Opinion: California wildfires. Hurricanes on the coast. Is anywhere safe from the climate crisis?

Opinion by John D. Sutter Video by McKenna Ewen and Gabe Ramirez, CNN 

4/12/2021

Tracy thought she'd built her forever home. She and her 5-year-old granddaughter live in an energy-efficient house in Northern California that Tracy designed — by a pond that's frequented by otters, ducks and herons (oh my!).

© Provided by CNN John D. Sutter

Then came the fires, the smoke, the evacuations, the days when the sky turned red and they were unable to see the sun. It was terrifying, she said. Understandably. And it's poised to get worse because of the climate crisis, which is contributing to longer and more dangerous wildfires in the West as humans dump fossil fuel pollution into the atmosphere.

Because of this, Tracy made the difficult decision to leave.

Then came more questions that seemed even trickier.

Where to go?

Is anywhere safe from the climate emergency?

She left CNN a voicemail about the conundrum. (She did that as part of an ongoing series of mine that's called "Let's talk about the climate apocalypse.")

"The big question I have is: If not here, where?" she said.

Feeling a little bit like a climate journalist (which I am) and a little bit like an annoying HGTV host (which I am not — yet?), I went on a quest to try to answer that question for Tracy.

I had a hunch that she wasn't alone in asking this question. The last several years have shown the degree to which human carbon emissions already are shaping reality: more-frequent wildfires raging in California, rapidly intensifying hurricanes pounding the Gulf of Mexico, sea levels rising on the Atlantic and droughts become more severe in the West. I'm sure there are plenty Americans asking themselves if home will ever feel safe.

I've done pretty extensive reporting on climate-induced migration — including from Honduras, Puerto Rico or the Marshall Islands, where people tend to be thinking less about where they will move to and more about the climate disasters that are pushing them out.

But I have to admit: I haven't thought much about where people should go.

Or about who's able to move and why.

Tracy knows she is privileged to be able to plan this move and to have the resources to make it comfortably — to choose while others are forcibly displaced. Her house is still standing and in good shape. The fires came to a nearby ridge, but not to her pond or land.

Rather than pretending the fire risks will recede, or waiting for a fire to come and force her out, she is facing harsh realities and trying to make what I would consider a wise decision — one that, for her, focuses on her granddaughter's future.

When this happens at the community level, climate adaptation specialists call it "managed retreat." Without government programs to help people relocate out of harm's way (there are very few, and they're not scaled appropriately), climate migration will only widen gaping inequalities in this country. Some can choose to move. Others will be left to fend for themselves. It's the scattered, diffuse successor to the Dust Bowl in the 1930s, the Great Migration of Black Americans from the South in the 1900s and of White flight to the suburbs in the 1970s.

And it usually happens with little discussion.

In taking up Tracy's question, I had my own.

Were there other people like her? And if so, where were they moving?


'Climate refuge'

One of my first calls was to Jesse Keenan of Tulane University, who studies the movement of people and the ways we're adapting to climate risks.

In recent years, Keenan and other researchers, including A.R. Siders and Mathew Hauer, have been raising awareness about how the climate crisis will force people to move.

The scale is far greater than most people realize.

"This is on the scale of the great Dust Bowl and the migration that came along with that," Keenan told me. "There are too many unknowns" to fully quantify the scope of climate-induced migration, he said, "but we do recognize that this is in the order of millions of people."

The World Bank, for example, estimates that more than 140 million people could become internally displaced by the climate crisis in coming decades — and their assessment only includes a few regions of the world. The rise in sea levels alone (which does not account for Tracy's situation, fleeing fire or other climate calamities like floods) is expected to displace 13 million people in the US by 2100, according to Hauer's research published in the journal Nature Climate Change.

In this context, Keenan has become fascinated by the same question as Tracy -- the where. Where will people move as the world continues to warm? And are there any places that would be smart to position themselves as a "climate refuge?"

His answer: Yes.

In particular, the Great Lakes region and the American Rust Belt.

And in hyper-particular: Duluth, Minnesota.


'Not as cold as you think'

In 2019, after conducting a statistical analysis of US cities — including the cost of living, relative vulnerability to climate-related disasters and effects, availability of diverse housing stock, natural resource availability, and so on — Keenan began discussing Duluth, Minnesota, as one of the most climate-friendly places in the United States. Scientists and other academics from the University of Minnesota Duluth caught wind of this and asked Keenan to come to town to present his research in town.

In a public lecture, Keenan introduced some tongue-in-cheek slogans — "Duluth: not as cold as you think!" — and outlined his vision for Duluth as a climate refuge.

People in Duluth are still talking about the visit two years later.

His thesis rests on a few key points:

Water: Duluth sits at the western point of Lake Superior, which is among the largest freshwater lakes in the world, containing about 10% of the world's accessible freshwater (10%!). California is running out of water. (The massive Colorado River often is sucked dry by cities in the Southwest before it meets the Gulf of California). The West is getting drier, overall. And here's Duluth sitting on an abundant, stable supply of the stuff.

Housing: Duluth, like other Rust Belt cities, has available and affordable housing stock. According to the mayor's office, the city was built for 130,000 people. Manufacturing declined. Now the city's population is only 86,000. In other words: room to grow.
Infrastructure and mindset: Duluth has been investing in a clean-energy future in ways that not all former industrial towns have, according to Keenan. It has abundant public parks, health care facilities and water infrastructure that could support a growing population, he said.

Cool factor: Keenan describes Duluth in his presentation and interviews as progressive, inclusive and welcoming — the type of place a Californian can tolerate. There's an art scene, breweries, a distillery that makes gin from the area's spruce and juniper trees. The county — St. Louis County — is reliably blue in a blue-leaning state that happens to have the nation's highest voter turnout rate. It's an engaged, interesting place.

The entire Great Lakes region is poised to succeed in this way, Keenan told me. Thinking across decades and generations — not right away — that northern region could undergo a Renaissance as people flee fire, rising seas, floods, hurricanes and extreme drought. There are still climate risks in the upper Midwest, to be sure. But they are expected to be less intense than those affecting other parts of the United States.

Lucinda Johnson, associate director of the Natural Resources Research Institute at the University of Minnesota Duluth, recalls thinking that this idea of "refuge" was the most natural thing in the world. She studies other organisms that seek it — and they're usually looking for freshwater.

"There's no reason to think that humans are going to be any different from other species" when it comes to seeking out that resource, Johnson told me. "We are part of the ecosystem, so there's not a lot we can do to separate ourselves from the natural world."


'San Francisco of the North'

I decided to follow in Keenan's footsteps and take a trip to Duluth.

After all, if I were going to recommend this place as a future home for Tracy — and all of the other people considering similar moves — I should at least set eyes on it. Duluth sounds fine on paper, but "House Hunters" teaches us that listings aren't always what they seem.

I'm not going to sugarcoat my first impression: Driving into town, Duluth struck me as a Midwestern version of Pittsburgh. The city is about two hours north of Minneapolis by car. The first thing you see from that direction is its industry — a paper mill, factories, heaps of ore.

Plus, the weather. In mid-March, after one brilliantly sunny afternoon, it was very windy and therefore fairly cold. (I'm not going to say "frigid" even though it felt that way to me at times, coming from Salt Lake City; Minnesotans, who are known for being super nice, also are known for being super not-nice to people who complain about their weather.) In February, before my visit, the temperature dropped to minus 27 degrees Fahrenheit.

Get a little closer, though, and Duluth's allure begins to reveal itself. You can see the hillside that plunges with San Francisco-like steepness toward Lake Superior. And then, of course, there's the lake. I've spent relatively little time in the Great Lakes region, but this is a lake that looks and sounds like an ocean. Signs alert visitors of its substantial currents. There's a light house, a boardwalk and a lift bridge that crosses St. Louis Bay. Waves crash on the rocky shore of the lake — and, truly, you can forget for a moment that you're not on the Pacific.

I felt conflicted right from the start.

One of my first stops was to meet the city's mayor, Emily Larson.

"We are known as the San Francisco of the North," Larson said with smile.

"I'll let you decide if you think that's true."

At first, Larson didn't know how to feel about Keenan's proposal — Duluth as climate refuge. The idea "really challenged me, actually," she told me, "like, challenged me personally."

She found it difficult to grapple with the fact that people are being forced from homes they've built and have loved — that human-caused warming would undercut entire ways of life.

Given that stark reality, though, she wants to help.

"It's a wonderful place to live. It's an extraordinary place," she said of Duluth.

"And we want to be that (refuge) for people."

It happens to be a potential refuge where the average home price, according to Zillow, is just north of $200,000. Far short of San Francisco's $1.4 million.


'Cultural genocide'

Not everyone shares this vision of Duluth-as-climate-refuge.

There are fears in town that property values will go up — that the clean water, ample parks and relatively affordable housing may not survive thousands of new arrivals.

The state and nation's painful legacy of colonialism complicates matters further.

I spoke with Karen Diver, a member of the Fond du Lac Band of Lake Superior Chippewa and a former adviser to President Obama on Native American affairs, about this idea.

For her, the stakes could not be higher.

"If you are going to come here, then you need to support us as Indigenous people so that your climate solution doesn't end up in our cultural and spiritual genocide," she said.

"This is treaty area for the Fond du Lac Band (of Lake Superior Chippewa). And, once again, we are going to bear the brunt of colonization," she said. "These will be new colonizers coming to the area, but it's going to because they're going to come here for reasons that have nothing to do with anything that Tribal people have done."

Diver said it's not that she doesn't sympathize with people who are moving because of the climate crisis. It's that she wants to be sure their arrival doesn't further degrade the natural resources that make northern Minnesota special — and that Indigenous people aren't further marginalized (or further pushed off of their land) by new migrants.

"If you're coming for the clean water, can we still promise you clean water with 50,000 or 100,000 more people?" she said. "Don't kill the thing you love, you know?"

Larson, the mayor, told me the city is planning for sustainable growth. She said she's sensitive to Diver's concerns and the fact that "this land has been inhabited for centuries," well before Duluth existed as a town, should be front of mind during this potential transition.


'Our home didn't feel habitable'

Largely, Duluth-as-climate-refuge is still a theory.

But I did meet two people for whom this is reality.

Jamie Beck Alexander and Doug Kouma both moved to Duluth, separately, in circumstances similar to Tracy's. They lived in California and became fearful of wildfires and toxic air quality. They sought out Duluth in part because of its perceived insulation from climate disaster.

Kouma, who was living in Sonoma County, created a spreadsheet with some of the qualities he was looking for in a new city. Duluth ranked near the top for him, particularly for its lack of climate risks and its relatively progressive politics. A visit in 2019 sealed the deal.

"Duluth is today is sort of maybe what San Francisco might have been 20 or 30 years ago?" he told me, not 100% sure about this but also not willing to dismiss the comparison. "It's crunchy. It's granola. You can be who you want to be and live the life you want to live here."

As for the winters? They're super cold, he said. But people embrace it by cross-country skiing and snowshoeing. He actually didn't mind it. His biggest complaint seems to be the small size of the 40-something dating pool. He jokingly asked me to encourage dating prospects to check Duluth out.

Jamie Alexander, meanwhile, left San Francisco with her husband and two young children last summer. They didn't want to live through another fire season — particularly because of their children's health. "Our home didn't feel habitable to us anymore," she said.

They started driving east and kept going until they felt like they were a safe distance from fire risk. That ended up being Minnesota, and eventually Duluth. Alexander is the director of Drawdown Labs at Project Drawdown, which is a climate-focused organization, so she was familiar with the risks.

They couldn't be more pleased with Duluth. Alexander told me she feels more at home here after several months than she'd felt in other locations the family had lived in for years.

"We've been really warmly welcomed," she said.

Given the similarities between Alexander's story and Tracy's, I asked Alexander if she had anything she wanted to say to the woman struggling with the question of where to move.

"I would say, 'We're all in this unknown together.' I don't think there are some people who have the answers and other people who are searching for them. I think we're all, you know — we're all searching and we're all trying to make sense of what's happening" to the planet.

"There's no guidebook for this," she added.

"History is no guide for the future."


'I'll go look'

After the trip, I called Tracy.

I wasn't trying to convince her to move to Duluth, per se. This isn't actually HGTV. I share Mayor Larson's sentiment that none of this feels good. There are terrible inequities baked into the way climate migration is unfolding in the United States. My true wish is that the world would stop burning fossil fuels, which would slow down the rate of warming that's driving these changes.

Short of that, it's logical to me that Americans like Tracy would seek to adapt.

If only this country could help lower-income people do the same.

And if only the United States could become a global leader in a push to include the climate as a valid criterion for status under the Refugee Convention. Currently, climate migrants are not covered under international refugee law like political refugees, for example.

I also want people like Tracy to find safety — to find home in this troubled world.

I told her about Keenan and Duluth.

About how it meets many of her personal criteria — the sense of community, the progressive politics, the availability of freshwater and (for the most part) the apparent reduced risk of wildfire.

"I'll go look!" she said, partly just to placate me, I think.

"Maybe it's closer to San Francisco than I realized. If so, that would be wonderful."

There's no easy or happy ending to this story. Tracy has decided to move. But she still doesn't know where. The idea of the Midwest doesn't appeal to her culturally, and she's worried about the cold winters.

Maybe Vermont? New England?

Nothing feels exactly right — or doesn't yet.

Even Alexander, who is happy now in Duluth, told me this transition has been extraordinarily painful. She left San Francisco without really saying goodbye to a place she loved.

I thought back on my conversation with Keenan, who told me that the United States is "an extraordinarily mobile country." We're people who adapt to problems by moving — for better and worse. The climate crisis may prove to drive the Greatest Migration of them all.

It's playing out today with relatively little notice.

And with little support from governments or international organizations.

Nowhere is truly safe.

But perhaps it's only human to seek whatever refuge you can find it.










a man wearing sunglasses: Karen Diver, member of the Fond du Lac Band of Lake Superior Chippewa and a former adviser to President Obama on Native American affairs.Next Slide
Auto Rotation On
Full Screen

1/9 SLIDES © McKenna Ewen

Karen Diver, member of the Fond du Lac Band of Lake Superior Chippewa and a former adviser to President Obama on Native American affairs.

Canada's greenhouse gas emissions increased slightly in first year of carbon tax: report
John Paul Tasker 

© Jason Franson/Canadian Press

 A flare stack lights the sky from the Imperial Oil refinery in Edmonton, Alta. on December 28, 2018.

Greenhouse gas emissions in Canada ticked up slightly in 2019 — the first year that the national carbon pricing mechanism was in place — according to a new report published today by Environment and Climate Change Canada.

Canada produced 730 megatonnes of carbon dioxide emissions in 2019, an increase of one megatonne — or 0.2 per cent — over 2018, which means Canada will have to do more in the years ahead to meaningful reduce emissions to meet the targets set at the Paris climate summit.

The federal department said the economy grew faster than emissions did in 2019 — which means the country's "emissions intensity" is lower than it has been in the past.

Greenhouse gas emissions as measured against the size of the economy have declined 37 per cent since 1990 and 23 per cent since 2005 — which means economic growth is not translating into much higher emissions as energy efficiency improves.

The department also said that emissions would have been considerably higher in 2019 had the government's pan-Canadian framework on clean growth and climate change not been in place. The framework is the plan that levies a national price on carbon emissions and funds other green-friendly initiatives.

"Before the pan-Canadian framework, absolute emissions in 2019 were forecasted to be 764 Mt, which is 34 Mt higher than this year's 2019 data. Once fully implemented, the strengthened climate plan is expected to reduce Canada's emissions by at least an additional 85 million tonnes, enabling Canada to exceed its current 2030 target," the report reads.

Ontario's decision to pivot from coal-fired power plants to other energy sources has helped the national effort to reduce emissions, the report said. Reduced coal consumption in Alberta has also driven down emissions related to electricity generation.

But other factors — more oil and gas extraction, an increase in the number of light-duty gasoline trucks and heavy-duty diesel vehicles on the road and a spike in nitrogen fertilizer use in the Prairie provinces — have offset some of those gains.

The energy sector alone — including "stationary combustion" at power plants, oil and gas extraction, refining and transportation driven by fossil fuels — accounts for 81 per cent of Canada's total emissions. The transition to electric vehicles could cut road transportation-related emissions, which account for 153 of the 730 megatonnes generated in all of 2019.

The second largest source is the agricultural industry (8 per cent), followed by "industrial processes" like metal production and the chemical industry (7.3 per cent).
Carbon levy to rise to $170 a tonne by 2030

Canada is aiming to reduce emissions by 32 to 40 per cent below 2005 levels by 2030, which means a reduction from 739 megatonnes of carbon dioxide in 2005 to at least 502 megatonnes in 2030.

As of 2019, emissions are down just 1.1 per cent compared to that 2005 baseline, but the report suggests Canada is making progress.

"Early modelling for 2020 shows that as a result of the policies under the pan-Canadian framework ... absolute emissions in Canada are projected to decrease annually starting in 2020, reaching 503 Mt by 2030," the report reads.

To reach its emissions targets, the government will dramatically increase the carbon levy over the next decade in order to wean consumers off fossil fuels in favour of cleaner energy sources.

The carbon tax will jump from its current level of $40 at tonne to $170 a tonne by the end of this decade, increasing the costs borne by consumers when buying gasoline, home heating, natural gas and propane, among other fuels.

To compensate for the cost-of-living increase, the government said it will continue to return most of the money collected by this program through rebates.

In a media statement, Environment Minister Jonathan Wilkinson said the report shows that the carbon levy and other measures "reined in the dangerous upwards trajectory of Canada's emissions under Stephen Harper."

"It is a good example of why we introduced more ambitious, faster-paced policy solutions last year which will lead to a continuous decline in pollution from 2020 through to 2030. That's good news for jobs, the planet and the economy."

Beyond that 2030 commitment, Ottawa is still aiming to go "net-zero" by 2050.

Reaching net-zero by 2050 would mean that emissions produced 30 years from now would be fully absorbed through actions that scrub carbon from the atmosphere — such as planting trees — or technology, such as carbon-capture and storage systems. The Liberals have promised to plant two billion trees.

Separately, in a letter to Conservative Leader Erin O'Toole, Wilkinson urged the opposition leader to present a plan to reduce emissions.

"The ship is turning, and it is the job of all parliamentarians to make sure Canada stays on course to meet and exceed the emissions targets agreed upon by successive governments," Wilkinson wrote.

With the Conservatives proposing to dismantle the carbon levy regime for consumers, Wilkinson said "it is incumbent on the Official Opposition to propose specific policy alternatives if these proven market-pricing mechanisms were to be rescinded by a future Conservative government."

Conservative MP Dan Albas, the party's climate change critic, slammed the government's environmental record. Even with "an ever-increasing carbon tax on everything," he said, emission reductions have gone nowhere.

"The Trudeau Liberals have not reduced emissions at all. This data shows that despite raising costs for everyday Canadians, emissions continue to climb. An Erin O'Toole government will ensure we have a serious plan to reduce emissions, building on our nation's innovation, not on the backs of Canadians," he said.

SINOPHOBIA POSTMODERN RED BAITING
Pandemic is fueling foreign espionage in Canada, says security committee

Catharine Tunney 

CBC

4/12/2021

© Evan Mitsui/CBC Foreign actors are interested in Canada's vaccine development and rollout, says a new report from one of Canada's key national security oversight committees.

The pandemic is driving some foreign states to ramp up their espionage efforts against Canadian targets — including companies engaged in vaccine development — says a new report from one of Canada's key national security oversight committees.

The warning is found in the National Security and Intelligence Committee of Parliamentarians's (NSICOP) annual report, which was tabled in the House of Commons today.

The report said Canada, the United States and the United Kingdom have been targeted by the intelligence sectors of China, Russia and Iran.

"The emergence of COVID 19 [means] more foreign espionage on biopharma and health care sectors, our COVID-19 vaccine supply," committee chair David McGuinty told CBC News.

"What we have concluded is that with this tumultuous year, [with] the increase in research in science and technology and the increase in research when it comes to vaccines and intellectual property, there's been an increase in interest of some actors trying to get their hands on that research."

According to NSICOP's paper, the Communications Security Establishment — Canada's foreign signals intelligence agency — reports that state-sponsored actors have targeted Canada looking for vaccine information.

"Specifically, CSE noted that these actors have demonstrated an interest in information related to vaccine research and development, medical equipment, and response coordination," says the report.

"CSE assesses that this threat will likely continue for the duration of the pandemic."

The report said the Canadian Security Intelligence Service also has expressed concerns about mass surveillance technologies.

McGuinty said the security service worries about Canadians downloading apps made abroad.

"For example, if you're a Chinese national living in China, you are downloading Chinese app technologies and you are expected to do so," he said.

"If you're a Canadian or a permanent resident here and you decide to download some other form of contact tracing technologies ... there are inherent risks in doing that. The risks are that you can be tracked, you can be monitored, your information can be stored, it can be shared."

China running 'talent programs' to learn Canadian info

The report is heavily redacted but provides some details of how China is trying to steal Canadian intellectual property.

"China uses 'talent programs' and academic exchanges to exploit Canadian expertise," it reads.

China's Thousand Talents Program, launched in 2008, encourages Chinese scientists abroad to bring their research to China; it's currently under investigation in the U.S.

"The result of this program is that intellectual property is often transferred to China," said NSICOP.

"In many cases, these actors are targeting the same types of science and technology in which the government of Canada is investing."

NSICOP was set up to to give certain parliamentarians access to top-secret materials and to allow them to question leaders in the security and intelligence community. It meets in secret and reports directly to the prime minister on national security matters. Only redacted versions of its reports are made public.

Haunting Hubble Image Shows Slowly Dying Galaxy

All that remains of NGC 1947’s spiral arms are ghostly wisps backlit by starlight

Duration: 01:07 

DDT
How a shocking environmental disaster was uncovered after 70 years
Jeff Berardelli 

CBS NEWS

4/12/2021

Just 10 miles off the coast of Los Angeles lurks an environmental disaster over 70 years in the making, which few have ever heard about. That is, until now, thanks to the research of a University of California marine scientist named David Valentine.

© Dr. David Valentine barrel-valentine.jpg

Working with little more than rumors and a hunch, curiosity guided him 3,000 feet below the ocean's surface. A few hours of research time and an autonomous robotic submersible unearthed what had been hidden since the 1940s: countless barrels of toxic waste, laced with DDT, littering the ocean floor in between Long Beach and Catalina Island.

© Provided by CBS News / Credit: Dr. David Valentine

The fact that his underwater camera spotted dozens of decaying barrels immediately in what is otherwise a barren, desert-like sea floor, Valentine says, is evidence that the number of barrels is likely immense. Although the exact number is still unknown, a historical account estimates it may be as many as a half a million.

After 70-plus years of inaction, Valentine's research has finally helped initiate a huge research effort to reveal the extent of the contamination.

But this offshore dump site is only a part of the story of environmental damage from years of DDT discharge along the coast of Southern California — a story which likely won't be closed for decades to come because of its ongoing impact, including a recently discovered alarming and unprecedented rate of cancer in the state's sea lion population, with 1 in every 4 adult sea lions plagued with the disease.

The history of DDT dumping

The chemical DDT was invented in 1939 and used during World War II as a pesticide helping to protect troops from insect-borne diseases like Malaria. After the war, production of the chemical ramped up and it became routinely used in the spraying of crops, and even over crowded beaches, to eliminate pests like mosquitos.

© Provided by CBS News / Credit: CBS News

But in the 1960s, DDT was discovered to be toxic. Over time, eating food laced with DDT builds up inside the tissues of animals and even humans, resulting in harmful side effects. The EPA now calls it a "probable human carcinogen." In 1972, when the U.S. government started taking environmental pollution seriously with legislation like the Clean Air Act, DDT was banned in the United States.

The largest DDT manufacturer in the U.S., Montrose Chemical Corporation, was located along the Southern California coast in the city of Torrance. From 1947 through 1982, Montrose manufactured and distributed DDT worldwide. In doing so, a byproduct mix of toxic sludge made up of petrochemicals, DDT and PCBs was produced.

For decades, that hazardous waste was disposed of in two ways. Some of the toxic pollution was dumped into storm drains and the sewer system, which was then pumped out to sea through outflow pipes, 2 miles offshore of the city of Rancho Palos Verdes.

The rest of the waste was disposed of in barrels which were loaded onto barges and floated 10 to 15 miles offshore to waste dumping sites off Catalina Island and then jettisoned into the ocean.

© Provided by CBS News / Credit: CBS News

While it may seem hard to believe, at least part of the dumping was legally permitted. Back then, Valentine says, the prevailing thought was the ocean's were so huge that they could never be compromised. The mantra was "dilution is the solution to pollution" — in hindsight a naïve notion.

But while the designated dumping site was very deep — in 3,000 feet of water — Valentine says shortcuts were taken, with barrels being dumped much closer to shore. And, in an effort to get the barrels to sink, there is evidence that many were slashed, allowing poison to leak, as they were dropped into the ocean.

For decades, the existence of these toxic barrels was surmised only by a very small group of scientists and regulators. That's despite a startling report produced in the 1980s by a California Regional Water Quality Control Board scientist named Allan Chartrand, which asserted there may be as many as 500,000 barrels laced with DDT sitting on the ocean floor.

The report was largely ignored. But after nearly 30 years, Valentine dusted it off as he began his quest to see if these barrels existed.

The inshore toxic waste site

Unlike the deep water dumping sites, the shallower toxic site — called the Palos Verdes Shelf — 2 miles off the beaches of Rancho Palos Verdes was well-known and documented. In 1996, this zone was declared a Superfund clean-up site by the EPA, now comprising a 34-square-mile area. Montrose was sued and after a protracted legal battle ending in late 2000 the companies involved, including Montrose, settled for $140 million.

© Provided by CBS News / Credit: CBS News

Over the past two decades, most of the money has been used by a program called the Montrose Settlements Restoration Program (MSRP) to try to restore the contaminated sites. Half of the funds were allocated to the EPA and National Oceanic and Atmospheric Administration (NOAA) to rehabilitate ecosystems impacted by the poison.

DDT gets into the food chain when it is consumed from the contaminated ocean bottom by tiny marine creatures, which are then eaten by small fish, which are then consumed by larger fish and marine mammals, like sea lions. Over time DDT builds up in the tissues and blubber of marine animals, a process called bioaccumulation. To this day, signs all along the Southern California coast warn fishermen not to eat certain fish. Despite this, you cannot get DDT contamination from swimming in the water.

Scientists say the contamination at this shallower water site is the most likely food chain route which leads to DDT building up in sea lion blubber. That's because there is a much greater amount of marine life living in shallower water. But that does not rule out contamination from the much deeper site as well.

To try to remedy these pollution problems, NOAA has used its share of the funds to manage almost 20 restoration projects off the LA coast, like restoring kelp forest habitat, helping migratory seabirds and restoring 500 acres of critical coastal marsh habitat in Huntington Beach.

The last project of the effort — just completed — was the commissioning of an artificial reef just off the beaches of Rancho Palos Verdes. To accomplish this, NOAA hired a team of scientists from the Southern California Marine Science Institute and Vantuna Research Group at Occidental College to design and deploy the reef.

The reef building effort was led by Jonathan Williams, a marine biologist from Occidental College. The project involved strategically placing more than 70,000 tons of quarry rock on the ocean bottom just off the beach. Williams says that the reef was an immediate success, with thousands of fish flocking to the rocks.

© Provided by CBS News / Credit: NOAA Fisheries

This reef site is much closer to shore than the contamination site, which is 2 miles from land. That's by design. Williams says the idea is to construct new habitat for fish and kelp in uncontaminated areas to build up healthy populations of fish. This helps limit the amount of toxins, like DDT, which enters the food chain.

As predators at the top of the food chain, DDT in fish is also a danger to people. Williams says this is especially true of underserved communities who are mostly likely to subsistence fish, eating what they catch. In this way, NOAA's project addresses environmental justice by attempting to make fish more safe to eat.

Two miles offshore, Williams says that after years of measuring high levels of DDT on the Palos Verdes Shelf, levels have started to drop precipitously, a sign that some of the DDT may finally be starting to break down.
Discovering the barrels

Despite the fact that the toxic barrels were dumped in the 1940s, 50s and 60s, their existence just became common knowledge this past fall when the Los Angeles Times published a feature on Valentine's work. But his discovery dates all the way back to 2011 when he first decided to see if the rumors of the barrels were true. In 2013 he made another short trip to the site. But his research was not published until March of 2019.

In all, his time-limited work yielded visuals of 60 barrels. Besides bringing back video of the leaking barrels, his team was also able to collect samples from the ocean floor. One of them registered a contamination 40 times greater than the highest contamination at the Superfund site, indicating that the toxins down deep are still very concentrated.

Armed with this compelling evidence, Valentine said that he "beat the drum" for years, speaking to various government agencies, trying to get some interest, but to no avail. However, when the LA Times story came out, interest finally followed as public outcry grew.

But before his discovery in 2011, Valentine placed part of the blame for the lack of knowledge about the barrels on the lack of technology to find it. It's only in the past couple of decades that the technology became available to make this deep water research feasible.

Coincidentally, on the very day CBS News went to visit Valentine in Southern California, Scripps Institution of Oceanography began a two-week mission to survey almost 50,000 feet of the deep ocean seafloor.

© Provided by CBS News / Credit: Scripps

Employing a large research vessel called the Sally Ride, 31 scientists and crew members, and two high-tech autonomous robots they call Roombas, the team used sophisticated sonar to map the ocean bottom and assess how many barrels there are.

© Provided by CBS News Scripps Researchers aboard the Research Vessel Sally Ride using the REMUS 600 and Bluefin automated underwater vehicles (AUVs) to survey the seafloor for discarded DDT barrels in March 2021. / Credit: Scripps

As of our last conversation with Eric Terrill, the team leader, the final number had still not been tallied. But even as early as a week into the research mission, Terrill described detecting tens of thousands of targets and said the number of barrels seemed "overwhelming."

The two-week mission is now complete, but the team is still putting together the pieces. They expect to have a final report published at the end of April.

Sea lions in trouble

Located right near the Golden Gate Bridge, the mission of the Marine Mammal Center in Sausalito, California is to rescue marine mammals in distress. Since 1975, the organization says they have rescued 24,000.

In December, the team published a 30-year study on sea lions, finding an alarming statistic: 25% of adult sea lions have cancer.

CBS News interviewed the lead veterinarian Dr. Cara Field. She called the number of sea lions with cancer both "extremely alarming" and "unprecedented in wildlife." Last year the Marine Mammal Center had to euthanize 29 sea lions because of cancer.

© Provided by CBS News / Credit: NOAA Fisheries

In the report, the research team pointed to a combination of herpesvirus and contaminants like DDT and PCBs as the cause of cancer. In all cases of cancer, sea lions had elevated levels of DDT and PCBs in their blubber. The theory goes that the contaminants weaken the body's immune system, making the virus more effective.

Because sea lions travel up and down the California coast yearly, scientists believe they may pick up the contaminants when they are near their breeding site on the Channel Islands off the coast of Southern California.

And while it seems logical that the sea lion contamination is coming from polluted sites in shallow water, scientists do not yet know how much of the DDT from barrels in deeper water may be entering the food chain. This, they say, will require more research.

While there are still many unanswered questions, one lesson from this story of DDT contamination is clear: When humans callously pollute the environment it can have consequences for generations to come. One current example is human-caused climate change. The question is, how much of a burden will our children and grandchildren have to bear as reult of our choices?