Good morning. Here’s your Daily Situational Awareness for Thursday, 20 January 2022. You can receive this daily briefing by signing up at https://forwardobserver.com/daily-sa
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TODAY’S BRIEFING:
- Food shortages rock Chinese city of Xi’an
- Exploited Solarwinds vulnerability discovered
- U.S. to stockpile rare-earth elements
- Congressional visit to Ukraine unites partisans
- Senate fails to pass voting rights bill
UPGRADE TO EARLY WARNING AND GET THESE BRIEFINGS:
- In Focus: Inflation, markets, recession, and the dollar demise
- Economic Warning INTSUM:
- Larry Summers’ case for worsening inflation
- Holiday spending falls in December
- Exxon: Oil prices to come down
SITUATIONAL AWARENESS
RESIDENTS OF CHINESE CITY XI’AN RUNNING OUT OF FOOD: Reports coming out of China and published in the Hong Kong Post are telling a story of Xi’an residents out of food and still unable to leave their residential compounds to scavenge basic supplies. Online food providers are reporting low or zero inventories of basic foodstuffs, and residents are reportedly rationing food, with many surviving on a bowl of porridge per day. In addition to the food shortages, one of Xi’an’s largest grocery store chains and online food retailer Hema was closed by authorities who accused it of violating COVID restrictions. (Analyst Comment: This is another example of the consequences of draconian COVID lockdowns and restrictions. Chinese officials in Xi’an and Beijing show little concern for the impact on citizens and will likely continue the lockdowns in an effort to reach their zero-COVID goal. Foreigners traveling to China for the 2022 Olympics should be prepared to face similar, though probably not as severe, difficulties. – M.M.)
SOLARWINDS 2.0: Microsoft released new details on cyber vulnerabilities in SolarWinds Software. The vulnerability used existing Log4j vulnerabilities to conduct attacks. Currently, Microsoft does not know the extent to which exploitation attempts were successful, and exploits could be used for pending ransomware or other undisclosed attacks. (AC: Exploitation of cyber vulnerabilities continues to be an access point of malicious actors in industry and government servers. Effects from the Log4j vulnerability will continue to be an issue into 2022 as the government and industry partners attempt to keep up with new attack vectors. – D.F.)
U.S. STOCKPILING RARE-EARTH ELEMENTS: The bipartisan bill, Restoring Essential Energy and Security Holdings Onshore for Rare Earths (REEShore) Act, was introduced in the Senate. The bill requires the Department of Defense (DOD) and Interior to create a strategic reserve of rare-earth elements and products by 2025 that would be able to meet the needs of the military, defense industrial, and technology sectors for one year. The stockpile is intended to buffer the effects from supply chain disruptions and a future conflict with China. Estimates put China in control of 55% of the world’s rare-earth mining and 85% of the refining process. The United States produces up to 15%. (AC: The focus to decouple reliance on China is one of the few issues with bipartisan support. Rare-earth element is a key persistent vulnerability identified by the White House. – D.F.)
CONGRESSIONAL VISIT TO UKRAINE UNITES PARTISANS: A bipartisan Congressional delegation briefed President Biden following a visit to Ukraine. In a classified meeting, the delegation reiterated their belief that Russia remains ready for an imminent attack on Ukraine. The administration accepted their findings and backed ongoing legislative and sanction plans against Russia while providing lethal aid to Ukraine. One senator noted “the additional burden of keeping NATO together” remains a key vulnerability in deterring Russian aggression. (AC: President Biden said during a press conference any U.S. response to Russian military action will be proportional. Press Sec. Psaki quickly clarified the President’s statement, but the message to Russia is clear. The Europeans remain divided on how to address Russia, with Germany and now France signaling a lack of interest in military conflict. Russian information operations across the West will continue to target the NATO alliance and U.S. involvement in Ukraine. Expect increased social and traditional media activity supporting Russia’s claims in the region. – D.M.)
Delegation co-chair Sen. Portman (R-OH) briefed the press on his Ukraine visit. Source: AP
SENATE FAILS TO PASS VOTING RIGHTS BILL: Unable to change the filibuster rules, Senate Democrats failed to pass the Right to Vote Act and John Lewis Voting Rights Act. These bills are now unlikely to become law, but provisions could find their way into other legislation. The stalled progressive agenda marks another major political defeat for the Biden administration. The February budget fights in Congress may include components of these bills, to force support from a “bipartisan” voting block. (AC: The maneuver required “buy-in” from the Senate Parliamentarian to stop debate and had a slim chance of success. Instead of requiring a 60-vote margin to federalize elections, Democrats bet on a Vice Presidential tie-breaking vote. Filibuster holdouts Manchin (D-WV) and Cinema (D-AZ) support the bills, increasing the chance of success in future legislative vehicles. Passage will result in a 25-year lookback at state election laws and procedures, automatic voter registration, a ban on voter-ID, among other deleterious provisions. – D.M.)
HAZARDS/WX:
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