Good morning. Here’s your Daily Situational Awareness for Thursday, 31 March 2022. You can receive this daily briefing by signing up at https://forwardobserver.com/daily-sa
- World Bank warns of coming debt defaults
- Biden’s billionaire tax raises concerns
- Funding boost for secretive Navy project
- FBI sees increase in Russian scanning of U.S. networks
UPGRADE TO EARLY WARNING AND GET THESE BRIEFINGS:
- Economic Early Warning Report
- State of the US food supply and coming shortages
WORLD BANK WARNS OF COMING DEBT DEFAULTS: The World Bank warned this week that the effects of Russian war and Western sanctions could trigger a wave of sovereign debt defaults. “Over the next 12 months, as many as a dozen developing economies could prove unable to service their debt,” one official warned. (Analyst Comment: The World Bank doesn’t expect a wave of sovereign defaults to pose a systemic global risk, possibly due to their proactive focus on dealing with sovereign defaults before they happen. Emerging and developing economies make up about 40% of global gross domestic product, and many of these countries are already considered “debt distressed.” We have a deeper look in today’s Economic Early Warning. – M.S.)
BIDEN’S BILLIONAIRE TAX RAISES CONCERNS: The Biden administration proposed a Billionaire Minimum Income Tax which affects individuals with $100 million or more in net worth. Economists are concerned the Internal Revenue Service has no capacity to make accurate net worth assessments of crypto assets or fine art. The 20% tax will apply to all income, including unrealized capital gains on at least liquid assets, potentially driving taxpayers to the private equity market to avoid paying the full amount. – D.M.
FUNDING BOOST FOR SECRETIVE NAVY PROJECT: The U.S. Navy is seeking a 167% funding increase for its classified Project Overmatch. Part of the Joint All-Domain Command and Control (JADC2) initiative, few details are available about the Navy program designed to improve battlefield communications and weapons deliveries. Information warfare, networking, and IT authorities are covered under Project Overmatch’s increased funding. (AC: The Pentagon believes adversaries will target digital command and control systems early in a conflict. The Navy’s JADC2 program likely combines survivable communications, networking, and messaging platforms to “stay in the (multidomain) fight” in a contested Pacific. – D.M.)
The Navy’s Project Overmatch likely supports the “how” of warfighting networks.
FBI SEES INCREASE IN RUSSIAN SCANNING U.S. NETWORKS: Bryan Vorndran, assistant director of the Federal Bureau of Investigation’s (FBI) Cyber Division, told the House Judiciary Committee that “instances of Russian scanning have increased” since Russia invaded Ukraine. The FBI and Cybersecurity Infrastructure Security Agency (CISA) are pushing businesses to proactively establish contact and relationship with local government field offices ahead of any attack. (AC: Both FBI and CISA believe that local small businesses are likely to be targeted if Russia responds with a cyberattack. Additionally, this statement coincides with previous claims by cyber officials that Iranian hacker groups are also currently probing U.S. critical infrastructure which could complicate attribution after an attack. – D.F.)
TODAY’S HIGH SIDE BRIEFINGS: Following the DailySA, Mike briefs on the state of the food supply and coming food shortages, and shares his weekly economic outlook. In the afternoon, Max will brief on Chinese fentanyl smuggling routes into the United States. Forward Observer subscribers can watch here: https://forwardobserver.com/early-warning-show. If you’d like access to these and other briefings, you can subscribe here: https://forwardobserver.com/subscribe
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