Good morning. Here’s your Daily Situational Awareness for Tuesday, 15 August 2023.
TODAY’S BRIEFING:
- READ TIME: 6 Minutes, 31 Seconds
- Inside the Beltway
- (1) Atlanta Grand Jury Issues Late Night Trump Indictment
- (2) Biden Wades into Auto Union Contract Fight
- (3) House Probes Nonprofit Elections “Dark Money”
- Domestic INTSUM
- (4) Morgan Stanley: Weight Loss Pills Impact on Food Consumption
- (5) America’s Growing Homeless Problem
- Global SITREP
- (6) China Defense Minister to Visit Russia And Belarus
- (7) Malabar Moves to Australia and Expands Scope
- (8) Niger to Prosecute Former President for Treason
- (9) AMLO Compares Rise of Argentina’s Milei to Hitler
- (10) BRICS Creator: Common Currency is “Absurd”
INSIDE THE BELTWAY
- (1) ATLANTA GRAND JURY ISSUES LATE NIGHT TRUMP INDICTMENT: An Atlanta Grand Jury returned an indictment of former President Trump after a filing charging him with racketeering, conspiracy, and falsifying statements charges appeared on the Fulton County, GA Clerk of Courts website before disappearing after media coverage.
- The Fulton County Clerk of Courts said the document being reported on was “fictitious,” and the media can expect to be notified of any filings in the case.
- Why It Matters: The Fulton County Grand Jury considering charges against Trump was expected to continue meeting today but returned a late-night indictment recommendation. The DA’s office likely had the filing ready to go and expected the Grand Jury to return with a recommendation to indict, and the leaked filing was real. This indictment is the most likely to lead to a prison term due to state mandatory minimum sentencing under Georgia’s Racketeer Influenced and Corrupt Organizations (RICO) law. – R.C.
- (2) BIDEN WADES INTO AUTO UNION CONTRACT FIGHT: President Biden said the United Auto Workers (UAW) union and car makers General Motors, Ford, and Stellantis should work together to “forge a fair agreement,” adding that the transition to a green energy economy should provide a “win-win opportunity” for all parties.
- White House Press Secretary Karinne Jean-Pierre said, “We’re going to have to remain hopeful… they will come to an agreement” after reporters asked if the Biden administration feared a work stoppage.
- Why It Matters: The White House has kept its distance with the UAW contract negotiation, which could set up a strike the week the Senate returns from its August recess. This could be a signal the Biden administration is trying to get ahead of the double whammy of fighting a possible government shutdown and a UAW strike that could harm the economy. – R.C.
- (3) HOUSE PROBES NONPROFIT ELECTIONS “DARK MONEY”: House Ways and Means Committee Chair Jason Smith (R-MO) released a Request for Information (RFI) on nonprofit organizations that he said are used to circumvent political contribution restrictions.
- Smith said the Committee learned that a Super PAC recommended donations to a tax-exempt nonprofit organization as “the single most effective tactic for ensuring Democratic victories” and that nonprofits were used to transfer foreign money to influence elections.
- Why It Matters: Mind The Gap, a nonprofit referenced in the letter, built a donor network that poured money into nonprofits focused on voter registration and “Get Out The Vote” efforts in House races that could flip from Republican to Democrat. This is a source of political funding commonly known as “Dark Money.” During the 2020 election cycle, groups aligned with Democrats spent over $500 million, while groups aligned with Republicans spent about $200 million. – R.C.
DOMESTIC INTSUM
- (4) MORGAN STANLEY: WEIGHT LOSS PILLS IMPACT ON FOOD CONSUMPTION: Morgan Stanley Research published a report about the impact of weight loss pharmaceutical injectables like Wegovy will have on food consumption.
- According to their research, patients involved in weight loss studies are eating about 900 calories fewer per day. By category, they consume 65% fewer cookies, baked products, and sugary drinks while eating 46% more fruits and vegetables and 23% more poultry and fish.
- The same research shows 73% of patients report visiting fast-food restaurants less frequently.
- Why It Matters: Morgan Stanley analysts are assessing the overall impact on investment portfolios, warning that Hershey, Hostess Brands, Domino’s Pizza, Krispy Kreme, and some food retailers will experience the greatest impact as injectable weight loss medications become more popular. However, distrust of Big Pharma may slow down or prevent the uptake of these weight loss pills.
- (5) AMERICA’S GROWING HOMELESS PROBLEM: Higher housing costs, a lack of affordable rentals, and the opioid crisis are fueling a homeless epidemic across American cities.
- The rate of homeless Americans jumped 11% from last year – the biggest annual increase since the government started tracking numbers in 2007.
- Between 2007 and 2022, the number of homeless people increased in 18 states, with the largest absolute increases in California (+32,535) and New York (+11,577).
- Why It Matters: This is a trend that, unfortunately, won’t reverse. The next wave of inflation will cause more Americans to become homeless. These homeless Americans will compete with migrant families for shelter and services. Expect a political fallout as more citizens and politicians call for helping American families over migrants. – H.B.
Global SITREP
- (6) CHINA DEFENSE MINISTER TO VISIT RUSSIA AND BELARUS: China’s Defense Minister Li Shangfu is visiting Russia and Belarus in a show of support for the Russian-led Union State.
- Li will address the Moscow Conference on International Security and meet with Russian leaders and representatives from nearly 100 other countries and eight international organizations.
- Foreign Minister spokesman Wang Wenbin said China and Russia will continue to advance their comprehensive strategic cooperative partnership in the new era.
- Why It Matters: At this point, any thoughts in Washington that China can be peeled away from Russia are pure fantasy. Beijing has consistently made it clear that it backs Moscow in what is essentially a battle against the West and its NATO alliance. Expect the China-Russia alliance to continue to bring resource-rich nations into its orbit to dethrone the U.S. from its global superpower position. This likely means more Chinese meddling in U.S. politics and a major push to de-dollarize the global economy. – M.M.
- (7) MALABAR MOVES TO AUSTRALIA AND EXPANDS SCOPE: The Quad is holding Exercise Malabar in Australia for the first time this year and has invited numerous regional partners.
- The U.K., Chile, South Korea, Canada, and New Zealand have personnel participating in the exercise but not ships.
- All Naval Warfare domains, including replenishment-at-sea (RAS) training, are on the agenda and will remain at the tactical level, according to the Japanese Ministry of Defense.
- The at-sea phase will run from 16 to 21 August.
- Why It Matters: Since it started in 1992, Malabar has effectively been training regional partners on the U.S. Navy’s methods of warfare with increasing complexity. Its tactical level focus and international RAS training suggest the Quad is developing a logistics framework to support a multilateral force of independent steaming surface combatants. Such a force would be difficult for the Chinese to counter as it is less predictable and easier to hide in wartime. Essentially, they’re preparing for guerilla warfare at sea. – J.V.
- (8) NIGER TO PROSECUTE FORMER PRESIDENT FOR TREASON: Niger’s ruling military junta said on Monday that it would prosecute ousted President Mohamed Bazoum for high treason over his exchanges with foreign heads of state and international organizations.
- Bazoum remains under house arrest in the presidential palace.
- Western nations and the African political bloc ECOWAS have demanded Bazoum’s reinstatement, threatening military action if demands are not met.
- Why It Matters: Despite U.S. and European attempts to push the military junta to restore democracy, it is now increasingly unlikely there will be a negotiated settlement in Niamey. The military junta, with allies in neighboring Mali and Burkina Faso, appears to be both fully in control and uncooperative. Expect the junta to continue isolating the country from Western sanctions and diplomatic pressure, possibly leading to the nationalization of Western-operated resource extraction enterprises. – M.M.
- (9) AMLO COMPARES RISE OF ARGENTINA’S MILEI TO HITLER: Mexican President Andres Manuel Lopez Obrador (AMLO) compared the political rise of right-wing Argentine presidential candidate to the rise of Adolph Hiter during yesterday’s press conference.
- “Inflations and economic crises always help the [political] right, conservatism, which is a bit what is happening in Argentina. I am not comparing Milei with Hitler, just to make it clear, I am making a historical reference,” AMLO said.
- Why It Matters: Both AMLO and Brazilian President Luiz Inacio Lula da Silva are committed to pushing Latin America towards the political left, so Milei’s success threatens to disrupt the trend following the defeat of Bolsonaro in Brazil. Milei is just barely ahead of his competitors, so he faces a substantial challenge in October’s elections. Still, Milei is a staunch anti-communist, and his election could renew some right-wing fervor in the region. – M.S.
- (10) BRICS CREATOR: COMMON CURRENCY IS “ABSURD”: Jim O’Neill, the former Goldman Sachs economist and creator of the Brazil, Russia, India, China, and South Africa (BRICS) concept, said a common currency for the economic alliance was “absurd.”
- O’Neill criticized the dollar as a difficult option for emerging economies – but said that the idea that BRICS can create a central bank and new monetary system is “almost embarrassing.”
- South African officials confirmed that a common BRICS currency would not be a topic of discussion at this month’s annual conference.
- Why It Matters: The BRICS common currency is making the rounds as a “dollar killer,” but we remain doubtful. The largest impediment is that these countries don’t have capital or credit markets large enough to facilitate international trade, which is not a quick or easy problem to solve. – M.S.
Low Intensity Conflict SITREP (Next 48 hours)
- Merrifield, VA – Far-left activists are coordinating a protest against what activists call Governor Youngkin’s “Don’t Be Trans Guidelines” on how schools should handle transgender student issues. The rally is scheduled to start at 1830 EDT on Tuesday, 15 August, at 3020 Gallows Rd, Merrifield, VA. The march will begin at 1930 EDT.
— END REPORT
M.S. indicates analyst commentary from Mike Shelby
M.M. indicates analyst commentary from Max Morton
J.V. indicates analyst commentary from Jared Vaughn
R.C. indicates analyst commentary from Robert Cook
H.B. indicates analyst commentary from Harrison Burge
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