Good morning. Here’s your Early Warning for Thursday, 26 July 2018. (All times Eastern.)
Early Warning: Overnight, the war of words between the U.S. and Iran reached new highs for the Trump administration when Iranian Revolutionary Guard Corps – Quds Force (IRGC-QF) commander Qassem Soleimani said, “I’m telling you, Mr Trump the gambler, I am telling you: know that where you are not thinking of, we are near you. Places you cannot imagine, we are next to you… The Quds force and I are your match. We don’t go to sleep at night before thinking about you.”
Seems melodramatic, right? Well, there’s good reason to take this threat seriously. The IRGC-QF is an Iranian mix between the U.S. Special Forces and CIA responsible for operations throughout the Middle East and beyond. When we consider Iran’s support to Iraqi proxy groups like Khataib Hezbollah and Asaib Ahl al-Haq — terror groups who have American blood on their hands — and the reach of Hezbollah, we have reason to take Soleimani’s words seriously. The Iranian military is not build for force projection; that’s the job of groups like IRGC-QF and Hezbollah, and they have a significant reach. Hezbollah has active cells in the U.S., Mexico, and in South America; they’re probably the world’s most advanced and most capable terrorist organization.
In his statement, Soleimani mentioned that the Red Sea is no longer secure for the U.S. military. Early this morning, Saudi Arabia announced that following an attack on two oil tankers by Iranian-backed Houthi rebels in Yemen, the country is “temporarily halting” oil shipments via the Red Sea. The Saudi Energy Minister stated that oil shipments would resume once the situation became more safe. Consider this an opportunity for President Trump to move U.S. naval assets to the area. I’ll have more in today’s Strategic Intelligence Summary.
White House
The President is scheduled to tour manufacturing facilities in Iowa and Illinois, and hold a roundtable discussion on workforce development.
State Department
Secretary of State Mike Pompeo is scheduled to attend and address a Ministerial to Advance Religious Freedom.
Defense Department
Defense Secretary Mattis has no public events scheduled for today.
The Carl Vinson (CVN-70) was last reported in the Hawaii Area of Operations (RIMPAC 2018). The Harry S. Truman (CVN-75) is at her home port of Norfolk, and the Ronald Reagan (CVN-76) is at port in Yokosuka, Japan. Conflict requiring a Carrier Strike Group does not appear imminent.
Congress
Significant House Activity:
- Nothing significant to report.
Significant Senate Activity:
- The Committee on Homeland Security and Government Affairs will hold hearings “to examine the challenges and opportunities of the proposed government reorganization on Office of Personnel Management and General Services Administration.” (Analyst Comment: This is several of such Senate hearings being held on the Trump administration’s plans to reform and reorganize several government agencies.)
* Reporting will appear in the Strategic Intelligence Summary or National Intelligence Bulletin.
Economy/Finance
– President Trump’s meeting with European Union president Jean-Claude Juncker took some heat off the trade war. The two reached an agreement to begin discussions to lower trade tariffs. [source]
– New data points to a housing slowdown, as new home sales hit an eight-month low. We’re also seeing a slow down in Chinese real estate investment in the U.S. I’ll have more on these data points in tomorrow’s National Intelligence Summary.
– In better news, Morgan Stanley published their second quarter growth expectations for the U.S. economy: 4.7 percent. That’s booming.
– Personal loan balances are climbing, matching a broader trend in consumer debt, in general. This is another reason why I’m concerned with the next recession: the potential for mass credit defaults all over again.
Weather
The National Hurricane Center reports that tropical cyclone activity in the Atlantic is not expected during the next 48 hours.
Drought conditions persist across much of the Southwest.
What I’m Looking at this Morning
Chinese shipping giant COSCO hit by cyber attack
Kissinger pushed Trump to work with Russia to box in China
National Guard soldiers involved in 10% of border apprehensions
Notable Quotable
“What could you do that you haven’t already done over the past 20 years? You came to Afghanistan with tens of tanks and armoured vehicles and hundreds of advanced helicopters and committed crimes there but what the hell have you achieved [in Afghanistan] between 2001 and 2018 with 110,000 troops? Isn’t it that now you are begging the Taliban to negotiate?” – IRGC-QF commander Qassem Soleimani
