Good morning. Here’s your Daily SITREP for Thursday, 19 October 2023.
- READ TIME: 5 Minutes, 37 Seconds
- Inside the Beltway
- (1) More Americans Doubt Democracy, Support Political Violence
- (2) Trump Leads Biden on Economy in Key Swing States
- (3) Third Time Unlikely the Charm for Jordan Speaker Bid
- Domestic INTSUM
- (4) Adjustable-Rate Mortgage Applications Rise, Bringing Financial Risks
- (5) Senators Push Back on “Rice Whale” NOAA Rule
- Global SITREP
- (6) Xi Warns Against Decoupling, Courts “Global South” Countries
- (7) Israel: Will Not Stop Humanitarian Aid Through Egyptian Border Crossing
- (8) E.U. Leaders Say Less Immigration and More Repatriation in Order After Brussels Terror Attack
- (9) 3-Star Admiral Takes Charge of the Israel Support Mission
INSIDE THE BELTWAY
- (1) MORE AMERICANS DOUBT DEMOCRACY, SUPPORT POLITICAL VIOLENCE: According to a new poll from the University of Virginia’s Center for Politics, 31% of former President Donald Trump’s supporters and 24% of President Joe Biden’s supporters said “democracy is no longer viable.”
- In the same poll, 41% of Biden supporters and 38% of Trump supporters said employing political violence to prevent political opponents from achieving their goals was acceptable.
- Why It Matters: This poll is concerning heading into possibly the most contentious presidential election year in recent history. Previous polls by the University of Virginia showed that 80% of Trump and Biden supporters thought the U.S. democratic system was viable. The trend appears to be that more Americans doubt the legitimacy of the U.S. democratic system. – R.C.
- (2) TRUMP LEADS BIDEN ON ECONOMY IN KEY SWING STATES: According to a new poll by Bloomberg News and Morning Consult, former President Donald Trump is polling ahead of President Joe Biden 47% to 43% among voters in the key swing states of Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin.
- A 51% majority of voters said the national economy was better off under Trump, and 49% said they would trust Trump with the economy going forward, while only 35% said they would trust Biden.
- Why It Matters: Biden won the 2020 election by a few tens of thousands of votes in key swing states, and with polling turning against him, Trump has a possible path to victory. – R.C.
- (3) THIRD TIME UNLIKELY THE CHARM FOR JORDAN SPEAKER BID: Republicans and some Democrats are considering alternative Speaker candidates after House Judiciary Chair Jim Jordan (R-OH) lost his second vote yesterday, with two more Republicans voting no.
- Rep. Jared Golden (D-ME) said some Democrats are considering expanding the temporary powers of Speaker Pro Tempore Patrick McHenry (R-NC) to avoid a possible shutdown on 18 November.
- Why It Matters: Jordan’s bid is likely dead, and the House is likely to give Speaker Pro Tempore McHenry greater powers to bring legislation to the floor because he has bipartisan support. – R.C.
- (4) ADJUSTABLE-RATE MORTGAGE APPLICATIONS RISE, BRING FINANCIAL RISKS: Potential U.S. homebuyers are increasingly turning to adjustable-rate mortgages (ARMs) with a lower introductory rate after housing affordability has fallen to the lowest level since the early 1980s.
- The average interest rate on a 30-year fixed-rate mortgage rose to 8% on Wednesday – the highest rate since mid-2000.
- Adjustable-rate mortgages’ share of total applications rose to 9.3% – the highest in 11 months, according to the Mortgage Bankers Association.
- Why It Matters: Adjustable-rate mortgages (ARMs) can feature an initial, lower rate for as little as six months before rates reset higher. U.S. homebuyers who take on ARMs are betting that interest rates will fall, allowing them to refinance at a lower rate. But if rates stay high through 2024, then more of these homeowners and banks carrying the ARM loans could get in financial trouble, especially with job losses from a recession. – H.B.
- (5) SENATORS PUSH BACK ON “RICE WHALE” NOAA RULE: In a letter to the National Oceanic and Atmospheric Administration (NOAA) and the National Marine Fisheries Service (NMFS), a bipartisan group of Senators led by Joe Manchin (D-WV) and Ted Cruz (R-TX) urged NOAA and NMFS to withdraw a rule blocking oil and gas production in a 28,270 square mile area of the Gulf of Mexico.
- The Senators said the rule, based on a single sighting of the Rice Whale in 2017, was a clear attempt to block oil and gas development and underestimated the national security and economic impacts of the new rule.
- Why It Matters: This NOAA rule is another move by the Biden administration that will negatively impact oil supply, keeping prices high. – R.C.
- (6) XI WARNS AGAINST DECOUPLING, COURTS “GLOBAL SOUTH” COUNTRIES: Chinese President Xi Jinping opened the Belt and Road Initiative (BRI) forum in Beijing yesterday by criticizing Western countries’ efforts to reduce their dependence on the Chinese economy.
- “Our lives will not be better, and our development will not be faster if we view the development of others as a threat and economic interdependence as a risk,” Xi said in his opening remarks to representatives of more than 130 countries.
- Russian President Vladimir Putin met with Chinese officials on the sidelines of the conference Wednesday and agreed their countries should deepen regional cooperation and explore cooperation in strategic emerging industries.
- Why It Matters: Western leaders insist that their goal is to “de-risk” – not to “decouple” – from China, aiming to diversify supply chains away from the world’s second-largest economy. Meanwhile, Global South countries are aligning with China and Russia to grow their economies, boost trade, and increase security, which reveals that U.S. hegemony is slipping away. – H.B.
- (7) ISRAEL: WILL NOT STOP HUMANITARIAN AID THROUGH EGYPTIAN BORDER CROSSING: The Israeli government announced on Wednesday that it would not stop humanitarian aid coming from Egypt, as long as it was destined for Palestinians not associated with Hamas.
- Egypt had closed its Rafah border crossing with Gaza to prevent Palestinians from fleeing into Egypt.
- The U.S. and the United Nations have been pressuring Egypt to open the Rafah crossing so that humanitarian aid can make it to Palestinians gathering in southern Gaza.
- Why It Matters: Israel is likely pleased with the Egyptian move to open the Rafah border crossing as it ties the Palestinians closer to Egypt as a potential alternative to the failed “two-state solution.” While both Jordan and Egypt have declared that Palestinians are not welcome in their countries, it is likely that international diplomatic arm-twisting will result in some level of acceptance by Cairo of Palestinians forced to permanently leave Gaza. Expect a combination of immigration to Egypt and Europe to play a key role in finding new homes for Gaza residents not associated with Hamas. – M.M.
- (8) E.U. LEADERS SAY LESS IMMIGRATION AND MORE REPATRIATION IN ORDER AFTER BRUSSELS TERROR ATTACK: Officials from Belgium, Sweden, and the European Union promised on Wednesday to tighten border security and step up repatriations after a failed asylum seeker from Tunisia murdered two Swedish citizens in Brussels, Belgium.
- The murders highlighted the EU’s failure to manage asylum and immigration, including security gaps and failures to return people deemed unsuitable for permanent resident status.
- The gunman illegally entered Italy in 2011 but was denied asylum status and ordered to leave the E.U. in 2020 – an order he refused to comply with.
- Why It Matters: European nations have been overwhelmed with illegal immigration and the resulting crime and cultural disintegration that accompanies it. While in the past the E.U. has strong-armed its member states into accepting unlimited “refugees” several countries are saying enough is enough. The E.U. may now be walking back its prior commitments to unlimited immigration – a move that could result in the U.S. following the E.U. lead in the near future. – M.M.
- (9) 3-STAR ADMIRAL TAKES CHARGE OF THE ISRAEL SUPPORT MISSION: Yesterday, the USS Mount Whitney got underway to join the Gerald Ford Carrier Strike Group (CSG) to support Israel.
- The Mount Whitney is the seat of the U.S. 6th Fleet, which is commanded by a Vice Admiral (O-9) and oversees all U.S. Naval activity in European waters.
- The Eisenhower Strike Group is on its way to support the mission, and the Defense Department recently publicized its extension of the Ford CSG’s deployment.
- Why It Matters: Placing a Combatant Commander in charge of this operation while sending two CSGs and an Amphibious Readiness Group indicates an extremely high level of importance to Washington, D.C. This could either be an attempt at deterring escalation or preparation to use immediate and overwhelming force in the region if that fails. – J.V.
— 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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