Early Warning for 17 January 2019

Good morning. Here’s your Early Warning for Thursday, 17 January 2019.

 

Early Warning: In a speech at the World Affairs Council in Philadelphia, former Trump advisor Steve Bannon predicted that President Trump would end up appointing four justices to the Supreme Court and that Justice Clarence Thomas may retire so that President Trump can pick his replacement. (Justice Ruth Bader Ginsburg’s replacement would be Trump’s third, and Justice Thomas his fourth.)

 

White House

The President is scheduled to participate in the Missile Defense Review announcement and receive his intelligence briefing.

Shutdown: 27 days. The House passed another spending bill yesterday, but prohibited President Trump from using any funds for the wall. It won’t get a look in the Senate, and we’re no closer to ending the shut down than we were yesterday.


 

State Department

Secretary Pompeo has no publicly scheduled events.


 

Defense Department

Acting Defense Secretary Patrick Shanahan has no publicly scheduled events.

 

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 on a three month deployment to the Western Pacific.

The Abraham Lincoln (CVN-72) was last reported as having returned to Norfolk.

The John Stennis (CVN-74) was last reported as in the Persian Gulf.

The Harry Truman (CVN-75) was last reported as having returned to Norfolk.

The Ronald Reagan (CVN-76) was last reported as having returned to home port in Yokosuka, Japan.

The George H. W. Bush (CVN-77) was last reported as having returned to Norfolk.

 

Bold 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

China’s chief negotiator Liu He is headed to Washington later this month to discuss an end to the trade war. The consensus among watchers is that the two sides are more likely to strike a deal than not. As the Chinese economy slows, and both imports and exports are dropping, China’s Xi Jinping is probably eager to bring an end to the war. (The Chinese central bank just ‘printed’ a record $84 billion, or 570bn renminbi, to boost lending and liquidity, and stave off the economic slowdown.) As I’ve mentioned before, an end to the trade war would be a positive step for the economy, markets, and U.S. farmers, especially; but enforcement of new rules is another issue entirely. (Kind of like how some Chinese corporations continue to trade with North Korea, despite international sanctions.) I hate to beat a dead horse but here’s the bottom line: China’s economy is partially predicated on $300-600 billion of intellectual property theft from the U.S. each year, and substantial changes are probably not an option for the Chinese Communist Party now that its own economy is on the rocks. Something tells me that a grand bargain with China will include some smoke and mirrors.

On another note, embattled Huawei remains a sticking point. The news this morning is that U.S. authorities may soon indict the Chinese tech firm for allegedly stealing trade secrets from T-Mobile and other U.S. companies. Until the entire world works toward isolating China, their private corporations, and their state-owned enterprises for their bad behavior, this widespread economic and industrial espionage won’t end until there’s nothing of value left to steal.


 

What I’m Looking at this Morning

Fed: Student debt problem has hurt U.S. housing market

The Federal Reserve’s 2019 Beige Book

U.S. concerned with China attack on Taiwan

China’s plan to break off U.S. allies


 

Notable Quotable

“I never said there was no collusion between the campaign, or people in the campaign… I said [there was no collusion with] the President of the United States. There is not a single bit of evidence the President of the United States committed the only crime you can commit here, conspiring with the Russians to hack the DNC.” – Trump attorney Rudy Giuliani, telling CNN that he can’t confirm that campaign aides didn’t collude with Russia

Samuel Culper is a former military intelligence NCO and contract Intelligence analyst. He spent three years in Iraq and Afghanistan and is now the intelligence and warfare researcher at Forward Observer.

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