Good morning. Here’s your Early Warning for Tuesday, 11 September 2018. (All times Eastern.)
Hurricane Watch: The National Hurricane Center is reporting this morning that Hurricane Florence is expected to make landfall between Charleston, SC and Norfolk, VA late Thursday night and into Friday morning. Already more than a million people have been ordered to evacuate while the governors of South Carolina, North Carolina, Virginia, and Maryland have declared state emergencies.
White House
The President is scheduled to attend a 9/11 memorial ceremony in Shanksville, PA, then holds separate meetings with Secretary Mattis and Secretary Nielsen and the FEMA administrator.
Of note: White House officials announced that they could start planning a second meeting with North Korean dictator Kim Jong-un.
State Department
Secretary Pompeo has no public appointments scheduled.
Of Note: The Under Secretary for Arms Control and International Security is meeting with officials in the Republic of Georgia on 10-12 September. The meeting will include talks on regional security, and how to strengthen “Georgia’s sovereignty and territorial integrity”. Russia still occupies the breakaway region of South Ossetia. Talks will also include Georgia’s “aspirations to integrate into Western institutions,” which is an oblique reference to NATO.
Defense Department
Defense Secretary Mattis and other senior DoD officials will attend 9/11 memorial ceremonies.
Of note: China and Russia today kick off the largest military exercise in decades. It’s at least an interesting coincidence that the exercise begins on 9/11. The exercise includes 36,000 tanks and a third of all Russian troops, and simulates “conditions as close as possible to war”, according to the Russian defense minister.
Also of note: National security advisor John Bolton recently reported that the U.S., U.K., and France are developing a joint military strike plan on Syrian forces if the Assad regime uses chemical weapons.
No significant developments for U.S. carrier strike groups have been reported.
Congress
Significant House Activity:
- Nothing significant to report.
Significant Senate Activity:
- Nothing significant to report.
* Reporting will appear in the Strategic Intelligence Summary or National Intelligence Bulletin.
Economy/Finance
-The Chinese delegation to the World Trade Organization will reportedly seek sanctions against the U.S. during next week’s meeting. U.S. officials have threatened to pull out of the WTO over its unfair stances.
– According to new data out today, U.S. consumer debt has now surpassed $4 trillion and accounts for about 25% of total disposable personal income. We’re probably looking at another bubble that will be burst during the next recession.
– Using the yield curve as a predictor, there’s just over a 10 percent chance of a recession by this time next year. Another indicator (Chicago Fed’s National Activity Index, real federal funds rate, and the yield curve) shows a higher chance of recession in six months, but not enough to cause immediate concern. I’m significantly concerned about the next recession because of the potential that economic and financial distress will lead to social unrest and political instability. The exact timing is anyone’s guess (2019? 2020? 2021? Beyond?), but we do have several indicators that are generally accurate. It’s something I’m watching very closely.
Weather
The National Hurricane Center is reporting this morning that Hurricane Florence is expected to make landfall between Charleston, SC and Norfolk, VA late Thursday night and into Friday morning. Already more than a million people have been ordered to evacuate while the governors of South Carolina, North Carolina, Virginia, and Maryland have declared state emergencies.
Yesterday Isaac was downgraded to a tropical storm, and it’s still on track to enter the southern Caribbean. Meanwhile, the NHC is still predicting that Hurricane Helene will spin north and isn’t expected to make U.S. landfall.
REMINDER: This hurricane watch section will remain in this report through the end of the season. I check the latest from the National Hurricane Center each morning and will provide details as necessary.
Drought conditions persist across much of the Southwest. This map is updated every Thursday.
What I’m Looking at this Morning
Army seeks 1,000-mile missiles against Russia, China
More U.S. artillery, air defense headed to Germany
Could oil demand peak in five years?
Notable Quotable
