Early Warning for 20 March 2019

Good morning. Here’s your Early Warning for Wednesday, 20 March 2019.

 

Early Warning:

 

Politics & Governance

President Trump is scheduled to be in Ohio today to visit an army tank plant in Lima and then hold a roundtable discussion with supporters in Canton.

Secretary Pompeo is on travel to Kuwait, Israel, and Lebanon from 18-23 March to discuss regional security issues, specifically focusing on combating Iranian influence and activities in the Middle East.

Both chambers of Congress are out of session this week, and there are no scheduled hearings until next week.

On Monday, the White House said it was mulling over potential reforms to higher education and student loan debt. One option is to impose limits on how much students can borrow for education, hoping that limits will keep rising tuition in check.

Yesterday, in a meeting with Brazilian president Jair Bolsonaro, President Trump said that he was considering making Brazil a permanent U.S. ally and possibly inviting them to join NATO. (AC: Brazil fought alongside the Allies in World War II, so it’s not a completely foreign concept. Bolsonaro joins Colombian president Ivan Duque as a right wing populist leader in South America, which fuels President Trump’s willingness to court Brazil. And President Trump is likely motivated to foster closer ties so that Brazil remains outside the political grasp of Russia and China. Both countries are trying to extend their influence over Latin America.)

 

Far Left Daily

“[Adolf Hitler] went about the business of discrediting institutions to the point that people bought into it… Nobody would have believed it now. But swastikas hung in churches throughout Germany. We had better be very careful [about Trump].” – Rep. James Clyburn (D-SC)

“This economy stopped working for most people years ago. Unfortunately the winner-take-all dynamics are about to accelerate as technology and capital converge. The question is what to do about it.” – Andrew Yang, presidential candidate

“Democrats cannot let fear of these deplorable people scare them away from doing their jobs. Impeachment is not a political tactic; it is a constitutional responsibility… Brett Kavanaugh must be investigated and impeached.” – Elie Mystal, writing for The Nation


 

Economy/Finance

FedEx cut its profit forecast again yesterday — the second time in three months — signalling a slowing global economy. (AC: This is proof of the slowdown, however, it’s not surprising. Economic consensus seems to be that this will not lead to a global recession.)
Singapore-based bank DBS is warning that China’s debt default problem will continue through 2019. In a report issued yesterday, DBS analysts warned, “China witnessed an unprecedented wave of corporate bond defaults last year… The default wave is extending into 2019 … Given the reduced risk appetite and huge maturing volume, the outlook is poor.” (AC: The slowdown in China is a major driver for the global economic slowdown. The Chinese Communist Party recently cut taxes and the Chinese central bank began their own quantitative easing program to ward off the effects of the trade war. But China’s debt problem, especially its corporate debt problem, is likely too deep to prevent further defaults, which puts the Chinese economy at risk.)

While the Trump administration expects three percent annual economic growth for the next several years, they do expect that growth to trail off unless additional action is taken. Specifically, White House forecasters want additional regulations removed, the 2017 tax cuts made permanent, and their $1 trillion infrastructure spending plan implemented. If Congress fails to implement those policies, economic advisors say, then U.S. GDP growth will decline. (AC: I expect Q1 GDP growth to be poor, largely due to the effects of the partial government shutdown. White House economic advisor Larry Kudlow remains adamant that we’ll see a quick return to GDP growth for Q2. As for the recession outlook, Kevin Hassett, Council of Economic Advisors chairman, says: “The idea that we would have a recession next year, it’s certainly not impossible. Recessions very often happen, and few people see them coming. But it would be very unusual for such a thing to happen given the maximum amount of capital spending and new capacity that’s being brought online.”)

 


 

Strategic/Defense Situational Awareness

Secretary Pompeo recommended designating the Iranian Revolutionary Guard Corps (IRGC) as a foreign terrorist organization. The IRGC is a conventional military wing, however, they do operate an irregular unit called the Quds Force (IRGC-QF), which engages in terror attacks. The IRGC-QF is a mix between special forces and an intelligence agency. They’re known to be active across the Middle East, and there are also reports of their activity in Latin America.

U.S. rapid-deployment troops arrive in Berlin for manuevers

Facing shortfall, Navy about to make enormous attack sub purchase

B-52 bombers to fly near Russia, China this month


 

Notable Quotable

“Like much else in US politics these days, [abolishing the Electoral College] a fantasy. The only thing holding the US together is settled political traditions. You can’t ‘get rid of’ the electoral college without undoing the Union. The more serious such talk gets, the more fragile the country will become.” – Yoram Hazony of the Herzl Institute

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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