Good morning. Here’s your Early Warning for Friday, 09 November 2018. (All times Central.)
Early Warning: It feels like 2000 all over again because Florida is about to be locked in another legal battle over another important election. Florida Governor Rick Scott tweeted this morning: “Every Floridian should be concerned there may be rampant fraud happening in Palm Beach and Broward Counties. The people of Florida deserve fairness and transparency and the supervisors are failing to give it to us.” Those two counties are still counting early voting ballots, a violation of federal election laws that say they should have been counted and reported by Tuesday evening. But that’s not the only fishy thing going on. A box labelled “provisional ballots” was discovered at a school, and up to that point hadn’t been included in the total vote tally. Additionally, there’s video of boxes of ballots being loaded into a truck by elections officials, which allegedly broke chain of custody laws. The Broward County elections supervisor was previously convicted of breaking election laws repeatedly (including the illegal destruction of ballots), but remains on the job. The Florida governor’s race is one to watch, because no matter the results at this point, it will likely taint the concept of free and fair elections.
White House
The President travels to Paris, France today to attend a celebration of 100 years since the end of World War I.
Caravan Watch: The caravan remains in Mexico City, what they consider to be a halfway point, as they await a decision on the next moves. Yesterday, the Trump administration announced that asylum seekers who illegally cross the U.S. border will be stripped of their asylum eligibility. President Trump made it clear in a contentious press conference this week that caravan members, which now include 7,000-10,000 in separate groups, will need to request asylum at a major border crossing, instead of entering the U.S. first.
State Department
Secretary Pompeo and Secretary Mattis meet with senior Chinese officials today in Washington to discuss diplomatic and security issues.
Defense Department
Defense Secretary Mattis and Secretary Pompeo will meet with senior Chinese officials today in Washington. During a recent press conference, Mattis reiterated his commitment to working with China peacefully.
These are the last publicly reported locations of these ships. Conflict requiring an aircraft carrier/carrier strike group does not appear imminent.
The Carl Vinson (CVN-70) was last reported as being underway in the Pacific Ocean.
The Abraham Lincoln (CVN-72) was last reported as being in port at Norfolk, but will be transitioning to a new home port in San Diego.
The John Stennis (CVN-74) was last reported as being underway in the eastern Pacific as it begins its shift to a new homeport in Norfolk.
The Harry Truman (CVN-75) was last reported as being in the eastern Atlantic.
The Ronald Reagan (CVN-76) was last reported as taking part in joint U.S.-Japan military exercise Keen Sword off the coast of Okinawa, Japan. Keen Sword runs through 09 November.
The George H. W. Bush (CVN-77) was last reported as being in the western Atlantic.
* Indicates significant changes to last reported location or other amplifying information.
Congress
Significant House Activity:
- Nothing significant to report.
Significant Senate Activity:
- Nothing significant to report.
* Only events pertinent to national security are listed.
** Significant reporting will appear in this week’s Strategic and National Intelligence reports.
Economy/Finance
We should maintain some concern over the Federal Reserve policy of winding down their balance sheet while raising interest rates. Banks are reporting an increase in demand for short-term funding for U.S. businesses, and if the Fed continues to wind down their balance sheets then banks could end up having too little cash reserves to meet the needs of business. Further interest rate hikes will also make short-term lending more expensive. When lending becomes more expensive, business take out less in loans, which decreases their ability to expand, which results in fewer economic transactions, and that’s how you get slow downs that lead to recessions. President Trump and others have criticized Fed policy, fearing that rising interest rates would negatively impact economic growth. There have been 13 rate hike cycles since the end of World War II, and 10 of those ended in recession. I’m not suggesting that the Fed is deliberately pointing us towards recession territory, but they likely feel pressure to get rid of the $4.1 trillion still on their balance sheets before the next major downturn. They had $900 billion before the 2008 financial crisis. Furthermore, the Fed continues to be up against the clock. Historically, they’ve cut interest rates by at least three percent to spur growth to exit the recession. The Fed’s stuck in a position where they have to raise rates, so they have rates to cut. Consensus, for what that’s worth, continues to eye the second half of 2020 as the time of our next recession. It could certainly be sooner.
Weather
HurricaneWatch: The National Hurricane Center reports that the Atlantic Ocean is clear of activity. About 21 days remain in “hurricane season,” which ends on 30 November. [source]
What I’m Looking at this Morning
Appeals court rules against Trump cancelling of DACA
Navy creating ‘aggressor’ submarine squadron to train units for battle with Russia, China
Notable Quotable
“If any other government in the world was credibly accused of detaining 1 million Muslims, I think we can reasonably conclude there would be calls for a debate in the UN Security Council. Demands for an investigation. Because China is so powerful both within and outside of the UN, that’s probably not going to happen. The net effect is that China may well get away with this.” – Human Rights Watch on China’s detainment of a million Muslim Uighurs
