Good morning. Here’s your Early Warning for Friday, 12 October 2018. (All times Central.)
The President is scheduled to receive his intelligence briefing and then depart this afternoon for Ohio where he’ll hold a Make America Great Again rally in Lebanon.
Secretary Pompeo: Nothing significant to report.
Of Note: The Assistant Secretary of State for International Security and Nonproliferation will be in Singapore, Vietnam, and Thailand this week (09-12 October) to discuss nonproliferation issues concerning North Korea.
Defense Secretary Mattis has no publicly scheduled events.
Deployments: The Wasp Expeditionary Strike Group was last reported as underway in the South China Sea. The Iwo Jima Amphibious Ready Group (ARG) was last reported as underway in the Atlantic to participate in Trident Juncture 2018 in Norway. Along with the Iwo Jima ARG are Marines from the 24th Marine Expeditionary Unit who will be joining 700 Marines already in Norway. Trident Juncture 2018 will begin on 15 October, but most of the exercise will take place between 25 October and 07 November.
These are the last publicly reported locations of these ships. Conflict requiring an aircraft carrier/carrier strike group 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.
The John Stennis (CVN-74) was last reported as having returned to port in Bremerton, WA.
The Harry Truman (CVN-75) was last reported as being in the north Atlantic after arriving in port at Portsmouth, England over the weekend. The carrier strike group will participate in the upcoming Trident Juncture 2018 exercise in Norway.
The Ronald Reagan (CVN-76) was last reported as being in the Philippine Sea.
The George H. W. Bush (CVN-77) was last reported as having returned to port in Norfolk.
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.
China’s September export numbers came out today, showing that the country set an export record as they accelerated exports ahead of Trump tariffs. Expect that number to slow down significantly as tariffs start to bite the Chinese economy.
In a conference call this morning, JP Morgan CEO Jamie Dimon talked about threats to the U.S. economy. “The economy is still very strong, and that’s across wages, job creation, capital expenditure, consumer credit; it’s pretty broad-based and it’s not going to be diminished immediately… So far, we still have a strong economy in spite of this increasing overseas geopolitical issues bursting all over the place.” During the call, he warned the geopolitical issues were the greatest threat. “I’m just pointing that out. No-one should be surprised if it happens down the road.”
Dimon’s comments this morning mirror what Trump economic advisor Larry Kudlow said during an interview yesterday. “We are the hottest economy in the world right now. We’re crushing it.” Kudlow added, “Europe is slowing down. Asia is slowing down. We are moving rapidly.” Kudlow seemed to have a permabull sentiment, and I don’t know how much of that is being a cheerleader for the president and how much will actually end up being accurate. “Right now, the U.S. is carrying the ball. I don’t see an end to it. With all due respect, I don’t think this is anything resembling a sugar high. President Trump has changed the incentives in the economy. The war on business is over.”
Finally, adding to previous commentary about the economy — specifically the corporate debt bubble — I want to point out another interview with Scott Minerd, head of investing at Guggenheim. “Ultimately this expansion will end and it is going to end because monetary policy is going to get too tight at the same time fiscal policy is going to turn into fiscal drag in 2020… Corporate America is overlevered.” Yesterday, Minerd took to Twitter saying, “Just as an iceberg loomed in the distant darkness to be struck by the Titanic under full steam, so the US economy approaches the distant fiscal drag of 2020 under the full steam of rate hikes to contain inflation and an overheating labor market.”
Overall, I get the picture that the U.S. economy is strong but will experience trouble ahead. Conventional wisdom seems to mark 2020 as the time frame for when things begin to fall apart.
HurricaneWatch: Hurricane Leslie is still spinning in the eastern Atlantic, while Tropical Storm Nadine looks primed for a run through the Caribbean next week.
(Source: This map is updated every Thursday.)
(Source: This map is updated every Monday.)
What I’m Looking at this Morning
“The latest poll from Reuters shows that 70 percent of Americans now support Medicare for All. In this pivotal moment in American history, we must go forward to guarantee health care as a right and not a privilege” – Bernie Sanders in a tweet from last night.