Early Warning for 3 July 2018

Advanced Early Warning: Rep. Maxine Waters, D-Calif., says she’s done with “nice guy politics,” which we assume means that she’s going to become even more confrontational with the Trump administration and Republicans in general while calling on others to follow her lead. This comes amid a reported threat against Sen. Rand Paul, R-Ky., and his children, which a suspect from Berkeley, Calif., is believed to have issued. The suspect, Nathanial Blaine Luffman, allegedly threatened to kill Paul and chop up his wife and kids with an ax. He said at an event over the weekend that Capitol Police have issued an arrest warrant. We will have more analysis of this and other related incidents in this week’s National Intelligence Bulletin.

ALSO: Oil prices have hit $75 a barrel for the first time since 2014 amid production cuts and supply disruptions, the latter from Iran, Venezuela, and Libya. Libya’s National Oil Corp (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted. Some analysts are predicting $3-per-gallon gas (on average) within two weeks.


White House

President Trump will meet Defense Secretary Mattis for lunch at the White House at 12:45 p.m. He departs the White House later and arrives for at The Greenbrier in White Sulphur Springs, W. Va. He delivers remarks at the Salute to Service dinner at 6:40 p.m., then returns to the White House.


State Department

Secretary Pompeo attends meetings and briefings at the State Department.

Deputy Secretary Sullivan attends meetings and briefings as well.


Defense Department

Secretary of Defense James N. Mattis, Deputy Secretary of Defense Patrick M. Shanahan and Chairman of the Joint Chiefs of Staff Marine Gen. Joseph F. Dunford Jr. have no public or media events on their schedules.

SECDEF Mattis will have lunch with the president at the White House at 12:45 p.m.

Aircraft carrier activity:

The Carl Vinson (CVN-70) made a port call to Joint Base Pearl Harbor/Hickam Airfield following its participation in RIMPAC 2018.

The Harry S. Truman (CVN-75) has left the Mediterranean Sea and is now operating in the Atlantic due to increased Russian submarine activity.

The Ronald Reagan (CVN-76) departed the Philippines and is transiting the Philippine Sea on patrol.

All other carriers are in homeport.

No conflicts requiring a Carrier Strike Group appear imminent.


Congress

House:

The House of Representatives is recessed until July 9.

Senate:

The Senate is recessed until July 9.

Significant Congressional/Political Reporting:

  • Following Rep. Joseph Crowley’s (D-N.Y.) loss to 28-year-old progressive Alexandria Ocasio-Cortez, a “generational divide” is opening up in the Democratic Party, in both the House and the Senate.
  • Mexico’s newly elected president, Andrės Manuel López Obrador, aspires to change his country’s tense relationship with the United States. Trump and López Obrador spoke for half an hour on Monday.
  • In Berlin, German Chancellor Angela Merkel and her coalition partner, Interior Minister Horst Seehofer, struck a deal on immigration on Monday. The standoff over migrant policy had threatened to unravel Merkel’s ruling coalition.
  • Analysis conducted by the Defense Intelligence Agency concludes that North Korean leader Kim Jong Un has no intention of engaging in a full denuclearization program, at least for now.
  • Sen. Bob Corker, R-Tenn., chairman of the Senate Foreign Relations Committee, warned against recognizing Crimea as part of Russia.

Economy/Financial

(1) Home prices jumped 7.1 percent annually in May, according to a new report from CoreLogic, the most in four years. Annual price gains had been shrinking slightly, as mortgage rates rose, but apparently higher rates are not hurting demand. They are, however, exacerbating the already critical supply shortage. Mortgage rates are higher, too; during the first quarter they averaged 3.75 percent or less. Now they are at, on average, seven-year high of 4.6 percent. If they were to rise even 1 percent, the report notes that about a quarter of current homeowners (24 percent) would opt to remain where they are.

(2) American factory activity accelerated for the second straight month in June, signaling momentum in the U.S. manufacturing sector.  The Institute for Supply Management on Monday said its manufacturing index rose to 60.2 in June from 58.7 in May. Numbers above 50 indicate activity is expanding across the manufacturing sector, while numbers below 50 signal contraction. Economists surveyed by The Wall Street Journal had expected a 58.1 reading for June.


Weather:

An area of low pressure continues to produce disorganized showers and thunderstorms along portions of the northern Gulf Coast. Although this disturbance is moving inland over southeastern Louisiana and development is not expected, locally heavy rainfall is possible over southern Louisiana and southeastern Texas during the next couple of days. Additional information on this system can be found in products issued by your local National Weather Service office. Chance of cyclone formation over 48 hours is near 0 percent.


Yesterday’s Signficant Reporting

Mexico’s leftist Lopez Obrador wins largest landslide in country’s recent history

Michael Cohen says family and country, not President Trump, is his ‘first loyalty’

Facebook’s disclosures under scrutiny as federal agencies join probe of tech giant’s role in sharing data with Cambridge Analytica


Notable Quotable:

“Short of a posting on eBay, Cohen could not be more clear in his pitch to Mueller. It was abundantly clear that he used this interview to remove any doubts as to his willingness to cooperate with Mueller.Jonathan Turley, a George Washington University law professor, writing about former Trump lawyer Michael Cohen’s interview with ABC News, in which he said his family and country come before loyalty to the president.

Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

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