Good morning. Here’s your Early Warning for Friday, 25 January 2019.
Soros: At Davos this week, George Soros warned that the U.S. and China were engaged in a “cold war that could soon turn into a hot one”. (AC: A Chinese colonel recently suggested that a Chinese vessel ram the next U.S. warship that entered the South China Sea. Both military and Chinese Communist Party officials have expressed growing confidence in their military capabilities. Unless it begins by accident, war with China would have to exceed several more thresholds, but it’s an increasingly plausible scenario.)
Venezuela: After giving U.S. diplomats 72 hours to vacate Caracas, quasi-president Nicolas Maduro hangs on to power because he still controls the military. The U.S. State Department is evacuating non-essential personnel but the U.S. embassy will remain open. That’s setting up a diplomatic, or potentially a military showdown because National Security Advisor John Bolton says that all options are on the table. Those include military options, although that’s highly unlikely for now. And now that China, Russia, Cuba, and Iran are speaking out and, indeed, have an interest in Maduro’s remaining in power, Venezuela is becoming more than a regional security issue. It’s now a geo-strategic issue. Consider for a moment Russian and Chinese information operations against the United States. We can probably expect some flavor of that inside Venezuela if they want Maduro to hang on. That’s especially true for Venezuelan military officials because they essentially control Maduro’s fate.
China: The story in Davos this week is that China is a player and they’re here to stay. They’re a rising global power, and they’re not going to play by the West’s rules. I’ll have more on that topic in today’s National Intelligence Bulletin.
The President is scheduled to receive his intelligence briefing, have lunch with Secretary Pompeo, then participate in a roundtable with a panel of mayors on economic growth.
Shutdown: Day 35. Federal workers miss another paycheck. And the Senate and House are still at an impasse.
Stone: Trump ally Roger Stone was arrested early this morning in his Fort Lauderdale home after a grand jury indicted him on seven counts, five of which were making false statements. There was also one count of witness tampering and another count of obstruction. Stone has maintained his innocence and predicted that he would be arrested. (AC: Last year, I had the opportunity to sit down with Roger several times. He would text me when he flew into Austin and we’d meet up for drinks. Roger revels in the nickname “the dirty trickster” of GOP politics. He’s a guy who plays to extremes. He says just about whatever he wants. Unfortunately, I would not be surprised if he’s found guilty of several of these charges.)
Secretary Pompeo is scheduled to meet with the UK’s foreign secretary.
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 as arriving at its new home port in Kitsap-Bremerton, Washington.
The Abraham Lincoln (CVN-72) was last reported as having returned to Norfolk.
The John Stennis (CVN-74) was last reported as in the North Arabian Sea.
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.
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
The Left is moving to the Far Left on economic and fiscal policy ahead of Democratic primaries. Sen. Elizabeth Warren wants a “wealth tax” that’s expected to raise $2.75 trillion over a decade. It’s nothing short of confiscatory, which is seemingly the Left’s plan for 2020 and beyond.
Janney Chief Fixed Income Strategist Guy LeBas asks, “We’ve seen a series of ‘one off’ earnings missed and guidance cuts from high-profile companies in last few weeks… When do these stop being ‘one offs’ and start representing evidence of material economic slowing?” Get ready for the main economic story likely to permeate through 2019: the perils of a global slowdown.
What I’m Looking at this Morning
“The White House will announce a plan by next month to end government control of Fannie Mae and Freddie Mac in a bid to resolve a long debate over the fate of the two companies that dominate the mortgage market, a top regulator said.” – This morning in Politico