06 February 2023

Daily Newsletter

Chinese Balloon Downing: US Says It Recovers Key Parts

Facts

  • Beijing maintains that the balloon was for meteorological research and accidentally crossed into US airspace, while the Pentagon claims that it was for surveillance. Initially, Washington had stated that the object posed no threat to US national security and decided against shooting it down.
  • Previously, Xie Feng, China's Vice Foreign Minister, accused the US government of "indiscriminate use of force" and damaging efforts to improve Sino-American relations after the US shot down the balloon. US Secretary of State Antony Blinken canceled his scheduled trip to China in reaction to this incident.
  • Since shooting down the balloon, which China denies was being used for surveillance, the military has shot down three more unidentified objects this month.
  • The object reportedly first entered US airspace in Alaska on Jan. 28 and then passed through Canadian airspace before returning to the US on Jan. 31.
  • The US military Monday said it has recovered key electronics, including sensors, from the alleged Chinese spy balloon it shot down off the coast of South Carolina on Feb. 4.

Spin

Anti-China narrative

The US was sending Blinken to China in hopes of improving relations between the two countries. China spoiled this plan by sending this spy balloon into US airspace and leaving Biden with no choice but to shoot it down and keep Blinken stateside. Obviously, there will always be behind-the-scenes competition between the two nations, but China can’t publicly humiliate the US and expect détente.

Pro-China narrative

The US is incompetent in dealing with crises because of the constant fighting between its political parties. The PRC's civilian airship wasn’t a threat, yet Biden shot it down to look tough in the face of Republican criticisms. Now he continues to be attacked by his political foes, but also has put US-China relations at risk with his overreaction. China can’t trust the US as a strategic partner because of its political dysfunction.

Cynical narrative

This whole story is an overreaction by the media. Whether you believe the balloon was a spying tool for China or it was just an off-course weather balloon, it certainly didn’t deserve the attention it received. Either the networks decided they needed to gin up ratings with scare tactics, and/or government representatives on both sides were feeding the frenzy to quash a US-China détente on purpose. But this balloon was nothing to freak out about.

Nerd narrative

There's a 9% chance there will be active warfare between the US and China before 2027, according to the Metaculus prediction community.

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Turkey-Syria Earthquake: Death Toll Passes 41K; Aid Enters Newly-Opened Border Crossing

Facts

  • A second earthquake aftershock, registering a magnitude of 7.7 on the Richter scale, in the same location near Gaziantep was also reported last Monday afternoon, less than 12 hours after the initial quake. With the numbers in flux and rising, total fatalities have surpassed 41K as of Wednesday evening local time.
  • Controversy and criticism of President Erdogan have continued to grow in Turkey in the earthquake's aftermath, including regarding the pace of response and alleged construction violations of building regulations. On Sunday, Turkey’s Justice Minister said that more than 130 people are being investigated over their apparent ties to collapsed buildings.
  • One of the largest earthquakes to hit the region in nearly a century — with a magnitude of 7.8 on the Richter scale — has killed thousands of people, destroyed infrastructure, and leveled thousands of buildings after striking a week ago in southern Turkey and northern Syria.
  • Rescuers have been searching through the rubble to find survivors in both nations as the World Health Organization (WHO) estimates that 23M people could be affected by the disaster. Tens of thousands of people have been reported injured.
  • The areas of Syria most affected by the earthquakes are regions still mired by the country's ongoing civil war in which there is a massive population of internally displaced Syrians living in refugee camps along the Turkish border. As a result, aid delivery to certain regions has been unreliable and slow.
  • Transportation in the region has been severely restricted by the earthquake and local weather conditions. Aid has reached opposition-controlled northwestern Syria via the Bab al-Hawa crossing, but, after a recent agreement between the Syrian government and the UN, 11 trucks entered the region via the Bab al-Salameh crossing.

Spin

Narrative A

This is the worst crisis to hit southern Turkey and northern Syria since the onset of the Syrian civil war in 2011. Besides the fact that this region is inundated with refugees, the earthquake comes in the middle of winter which is only compounding the suffering of those who were already suffering. The global community must step up quickly to help the people of Turkey and Syria.

Narrative B

Sadly, many impacts of this earthquake could have been lessened if only Turkish authorities had dealt seriously with supervising urban development in quake-prone areas, enforcing the mandatory earthquake-resistant design codes to buildings its legislation approved in 2000. There are two major fault lines along the Anatolian Plate, and earthquake mitigation is vital given the likelihood of catastrophic tremors.

Pro-establishment narrative

The US should not and will not work with a government that has killed hundreds of thousands of its own people with barrel bombs, starvation sieges, and chemical weapons. US sanctions on Syria have a very minor effect on aid delivery, as such areas are excluded from the sanctions which largely target individuals and companies, and any possible hindrances have now been lifted. The US will do everything it can via the NGOs with which it has worked for years to provide Syrians with aid, but it will not assist Bashar al-Assad, Syria's dictator, after he destroyed his own country.

Establishment-critical narrative

Though the US has lifted some sanctions, this is largely a superficial move to avoid criticism of its brutal sanctions regime. If sanctions weren't obstructing aid delivery, why did the US lift some of them? All routes from Turkey into the country's north have been destroyed, making it even more necessary for Western governments to work directly with the Syrian state to help alleviate this crisis. The West must lift all of these cruel sanctions.

Nerd narrative

There's a 50% chance that at least 77.1K will die as a result of the most deadly earthquake from 2020 - 2029, according to the Metaculus prediction community.

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Adani Loses $110B, Sparks Protests Across India

Facts

  • Adani's subsidiary stocks continued to fall Monday, with Adani Enterprises falling by 4%, Adani Transmission by 10%, and Adani Green Energy, Adani Power, and Adani Total Gas all dropping by 5%. The Security and Exchange Board of India and Goldman Sachs suggested that the overall Indian market is still stable.
  • As Indian conglomerate Adani Group's market losses top $110B, dozens of India's opposition party members on Monday were detained during protests — prompting parliament to be suspended again due to disruptions surrounding the company.
  • Members of the main opposition Congress party gathered outside the Jantar Mantar observatory in New Delhi to protest Adani's billionaire founder, Gautam Adani. They held banners, shouted slogans, and even breached barricades, causing police to detain them.
  • Protests mounted across the country, including outside the offices of the state-owned Life Insurance Corporation and State Bank of India, both of which have ties to Adani group companies. As Adani and Prime Minister Modi are from the same state, allegations have been made that the Prime Minister has benefited from favoritism.
  • The losses, which are up from $65B a week ago, follow a report by US short-seller Hindenburg Research last week, which flagged concerns about Adani firms' alleged mounting debts, stock manipulation, improper use of tax havens, and money laundering.

Spin

Pro-establishment narrative

Despite these market trends, the Indian market remains stable and reliable. Gautam Adani has said he will refund investor losses, and the government's independent regulators are already evaluating the situation. If India's economy was in the trouble, it wouldn't be projected to grow 7% in the next year — the largest projection among all major economies.

Establishment-critical narrative

Prime Minister Modi has been quiet on this issue because he knows he's complicit. His own regulators should not be investigating this matter, but as the members of parliament have called for, a truly independent probe by the Supreme Court should be conducted. India's stock market isn't falling due to some malicious attack by Hindenburg, but because Adani's corporate-government corruption has finally been exposed.

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Day 348: Kyiv Prepares for Renewed Russian Attacks

Facts

  • According to Ukrainian Pres. Zelenskyy's nightly address on Sunday, Kyiv is continuing to prepare for an imminent Russian bombardment as the anniversary of the Russian invasion draws nearer.
  • Elsewhere, Ukrainian repair crews were working nonstop in the Black Sea port of Odesa to restore power, after a fire left hundreds of thousands of residents without electricity. "Repair work is going on round the clock," said Zelenskyy, continuing with the allegation that such damage to Ukraine's cities "could not have happened" before the start of Russian attacks on power generation sites.
  • In other news, the German government announced on Monday that it expects it will soon have the necessary commitments from other EU countries to send the promised Leopard-2 tanks to Ukraine. Fourteen tanks have been pledged by Berlin, which wants to establish two battalions of the Leopards in cooperation with other countries.
  • Meanwhile, Advisor to Ukraine's Head of the President's Office Mykhailo Podoliak has claimed that the allegation Russian Pres. Vladimir Putin promised not to kill Pres. Zelenskyy is fictitious. Dmytro Kuleba, Ukraine's minister of foreign affairs, said of Putin: "Do not be fooled ... Every time he has promised not to do something, it has been exactly part of his plan."
  • Reznikov's words come as the minister faces pressure over corruption allegations, with reports suggesting he will soon be moved into another government position. It recently emerged that Reznikov had paid two or three times the market price for food sent to frontline troops; Kyrylo Budanov is now set to take up the role of defense minister.
  • Ukraine's defense minister Oleksii Reznikov has said the nation has the reserves necessary to hold back Moscow's forces. "Despite everything," he stated, "we expect a possible Russian offensive in February." Reportedly, not all of the latest military supplies promised to Kyiv by western countries will have arrived in time to aid defense against the alleged coming attack.

Spin

Anti-Russia narrative

Russia's deliberate targeting of energy infrastructure — unnecessarily increasing the suffering of civilians — amounts to war crimes. This continuing Russian barbarity must be confronted.

Pro-Russia narrative

Attacks on Ukraine's energy infrastructure are a direct consequence of the failure of the country's leadership to meaningfully engage in peace talks and the thought that they can defeat Russia on the battlefield. These attacks will stop once a more sober position is reached.

Nerd narrative

There's a 90% chance that 50,000 Russian soldiers will be killed in the Russo-Ukrainian conflict before 2024, according to the Metaculus prediction community.

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Report: Moscow, Tehran Advance Plans for Drone Facility

Facts

  • According to officials reportedly from a country aligned with the US, a high-level Iranian delegation flew to Russia in early January to visit the planned site for the factory and decide on details to start the project.
  • On Friday, the US Dept. of the Treasury announced new sanctions on eight senior officials of an Iranian drone manufacturer for their role in Tehran's supply of drones to Russia.
  • The Wall Street Journal reported on Sunday that Moscow and Tehran are cooperating on plans to construct a factory in Russia to make at least 6K Iranian-designed drones to be used in the Ukraine war.
  • The Washington Post had reported in November that such plans were in the works, stating that Iran and Russia had finalized a deal that month after Russian officials visited Tehran.
  • This drone factory is allegedly part of a $1B deal between both countries, which the White House claims to be developing a "full-fledged defense partnership" that includes also fighter jet training.
  • Though Tehran acknowledged in November that it had provided drones to the Kremlin, its foreign minister, Hossein Amirabdollahian, stressed that shipments of a limited number of weapons were made before the Ukraine war.

Spin

Pro-establishment narrative

Iran is no longer seen by the West as a problem to be solved, but instead as an outright enemy that is helping to prolong the conflict in Ukraine. Tehran is on a direct collision course with the US and the West and has made a fatal mistake in choosing to side with Russia and Putin.

Establishment-critical narrative

Western propaganda is spreading lies to try to justify the prolongation of the conflict in Ukraine. Despite having long-established defense cooperation with Moscow, Tehran is not taking part in any joint project to produce drones in Russia.

Nerd narrative

There is a 14% chance that Russia will test nuclear weapons in 2023, according to the Metaculus prediction community.

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Koch Network to Oppose Trump in 2024

Facts

  • AFP didn't say how much it will spend on the 2024 election, though it says it has a large grassroots and data operation "with some of [its] strongest and most effective state chapters" ready to "play a crucial role" in picking the next GOP candidate.
  • Americans for Prosperity (AFP), a conservative group that spends billions on campaigns and is backed by billionaire Charles Koch, said Sunday it will support a candidate other than former Pres. Donald Trump in the 2024 presidential primaries.
  • In a three-page memo, Seidel said the GOP is "nominating bad candidates who are advocating for things that go against core American principles." She added that the "best thing" for the US is "to have a president in 2025 who represents a new chapter."
  • This news comes after many of the major donors to AFP have shifted their support to other endeavors, and former key AFP strategists have moved on to other jobs. They've also been the target of Trump himself, who in 2018 called them "a total joke in real Republican circles."
  • Though many AFP donors were fans of Trump in 2016, Koch and his brothers were not; they stayed out of those primaries. The PAC reportedly donated $80M during the 2022 midterms.
  • Trump is so far the only candidate to officially announce his presidential bid, though potential opponents include former South Carolina Gov. Nikki Haley, who is expected to announce on Feb. 15, as well as Florida Gov. Ron DeSantis and former vice president Mike Pence.

Spin

Republican narrative

Plenty of Republican candidates and groups have their knives out for Trump. If they’re right, and an alternative candidate is necessary to retake the White House, they better coalesce around one Trump challenger rather than making the mistakes they made in 2016.

Pro-Trump narrative

Trump doesn't win all the time, but that doesn't take away his overall winning track record or his potential for victory in 2024. Just like 2016, liberals and never-Trumpers are handwringing over Trump’s candidacy spelling doom for Republicans. But rank-and-file Republicans still love him, and if he gets enough of their votes, he should be allowed to ride his way to the nomination, and possibly the White House.

Nerd narrative

There’s a 43% chance Trump will be the Republican 2024 presidential nominee, according to the Metaculus prediction community.

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Trial of Hong Kong Activists to Begin

Facts

  • Prosecutors say the illegitimate primary was created to paralyze Hong Kong’s government and topple the city’s leader by winning a majority to veto budgets. The defendants could face life in prison under China’s strict law.
  • The "Hong Kong 47" were arrested in January 2021 in a mass raid. Many of them remained in custody, with 15 being granted bail. Though exceedingly rare for defendants to not be granted bail under Hong Kong's system, China’s law stipulates that defendants cannot be awarded bail unless the court is convinced they won't commit acts that endanger national security.
  • The highly-anticipated trial of 16 Hong Kong democracy activists began Monday. The 16 defendants are among 47 who pleaded not guilty to charges of conspiring to commit subversion under Chinese national security law.
  • The trial comes three years after the defendants were accused of "subversion" for organizing an unofficial primary to elect candidates for the 2020 Legislative Council election, which was later postponed due to the COVID pandemic.
  • The trial of the group of activists — dubbed the "Hong Kong 47" — is the largest national security trial since Beijing imposed its sweeping legislation on Hong Kong following mass anti-government protests in 2019. It is also the first subversion trial.
  • The trial, which is expected to continue for 90 days, is being held at the West Kowloon Magistrates’ Court with people lining up amid heavy police presence. Critics believe the verdict will show if Hong Kong is in fact independent.

Spin

Anti-China narrative

This trial shows that Hong Kong is no different from other authoritarian regimes that imprison dissidents and undermine democracy. Beijing’s National Security Law was implemented to suppress any protests against China’s government, and Hong Kong adopted its own law that is closer to China’s than to its self-proclaimed common law system.

Pro-China narrative

The Hong Kong activists plotted a deliberate act of subversion against the city’s government. They sought to unlawfully win a majority in the Legislative Council in order to veto laws and paralyze the current government. This is a clear violation of the law and threat to national security, and a majority of participants have already pleaded guilty.

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Former Pakistan President Musharraf Dies at 79

Facts

  • In 2019 he was convicted of treason for actions he took as president, including suspending the constitution in 2007. His initial death sentence was later overturned by the court — he lived from 2016 until his death in exile in the UK and the Middle East.
  • It was widely believed that while Musharraf made sure Pakistan was a solid US ally — sharing intelligence and assisting in capturing al-Qaeda leaders — he also provided the Taliban sanctuary in his country.
  • Musharraf earned notoriety for agreeing to join the US “war on terror” in the aftermath of the 9/11 attacks and at the urging of then-US Secretary of State Colin Powell and, according to Musharraf’s autobiography, a violent threat against Pakistan from another US official.
  • Musharraf faced other scandals, including suspicions he, or at least his intelligence apparatus, may have been involved in the 2007 assassination of former Prime Minister Benazir Bhutto. In 2008, he resigned as president after he fired judges and imposed an emergency rule, which led to treason charges.
  • Musharraf was a former special forces commando who ascended to the presidency in 1999 after the last of a string of military coups. He stepped down in 2008 in the face of a potential impeachment.
  • Pervez Musharraf, the former president of Pakistan, died on Sunday in Dubai, according to the Pakistan military. Although no cause of death was announced, Musharraf had been undergoing treatment for amyloidosis, a rare disease.

Spin

Narrative A

Musharraf may have had his faults, but he stabilized Pakistan’s economy, raised its growth rate, liberalized the media, and passed legislation to protect women. His decision to align with the US brought in billions in aid from abroad, and no leader of Pakistan has ever come as close as he did to making peace with India. Subsequent instability should make Pakistan’s people yearn for his days in office.

Narrative B

Musharraf was an autocrat who oversaw a reign of death, destruction, and usurpation of Pakistan’s constitution. He played both sides when it came to the US and the Taliban. These serious actions should be remembered in the context of his legacy, not the liberal reforms he barely established.

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Dell to Slash Over 6K Jobs

Facts

  • A spokesperson on Monday told media that this kind of reorganization was: "a regular course of business" and the announcement echoed similar lay-offs three years ago, after the pandemic struck.
  • According to industry analysts from IDC, shipments of PCs decreased 28% globally, year-on-year in Q4 2022, while Dell's computer shipments declined 37% in the same period. As of early Monday, shares of Dell were down 3%.
  • Dell is the largest US employer so far to reveal plans to reduce staff numbers, as many act in response to widespread inflation and rising interest rates.
  • Dell Technologies Inc. has announced its intention to cut roughly 6,650 employees — about 5% of its overall workforce — amid slumping demand for PCs. The news comes amid a wave of mass layoffs in the tech sector, with companies such as Amazon and Alphabet having announced jobs cuts in recent weeks.
  • IDC has predicted the market for PCs and tablets is set to drop by another 2.6% in 2023, following rapid growth from the rise of remote working during lockdown. Primary rival to Dell, HP Inc., has also announced plans to cut up to 6K jobs.
  • The news was made public in a memo released on Monday, which saw Dell's Co-Chief Operating Officer Jeff Clarke state that attempts to cut costs by pausing hiring and limiting travel, among other measures, had been insufficient. Clarke also said that market conditions were continuing to "erode," creating "an uncertain future."

Spin

Pro-establishment narrative

This movement towards mass redundancy in tech firms is not indicative of any significant market changes. The layoffs are sparking media attention on an inordinate scale, but the tech sector only accounts for roughly 3% of jobs. In addition, tech workers are relatively well educated, and evidence shows they rapidly find new work in comparison to the rest of the labor market.

Establishment-critical narrative

These layoffs spark cause for concern. The bounce in stock prices following most tech redundancies may make this move more popular among executives, even though not enough emphasis has been put on the potential impact on consumer spending of layoffs. Tech workers are mostly highly paid and the US economy is heavily dependent on the spending of the top fifth of earners. This ongoing strategy in the sector could easily cause the elite to slow spending.

Nerd narrative

There is a 50% chance that the annual US unemployment rate will be at least 6.09% in 2027, according to the Metaculus prediction community.

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Kamala Harris Unveils $4.2B in Central America Investments

Facts

  • Harris announced that the total value of private sector commitments in the region is over $4.2B, up from $3.2B announced in June 2022. A total of 47 companies and organizations contributed to the amount.
  • Harris believes creating economic opportunities will incentivize residents of the region to stay in their own respective countries instead of migrating to the US. It is still unclear how much Harris’ efforts to date have reduced migration as it remains at historic highs.
  • Harris spoke on Monday at the "Central America Forward Launch Event" in which she highlighted her plan. She also pledged to "promote good governance, reduce violence, and empower women" to address the root causes of migration.
  • In March 2021, Pres. Biden tasked Harris with leading efforts to curb migration which surged dramatically after he took office. Harris then focused her attention on El Salvador, Guatemala and Honduras, known as the "Northern Triangle."
  • On Monday, US Vice President Kamala Harris unveiled $950M in new private sector commitments in the Central American countries of El Salvador, Guatemala, and Honduras — building on her plan to reduce mass migration to the US by creating economic opportunities in the home countries of many migrants.
  • Retailers Target and Columbia Sportswear are two notable companies investing in the region, with Target committing to increase its spending in the Northern Triangle by $300M this year while Columbia says it will purchase $200M in products from the region.

Spin

Democratic narrative

The Vice President's Central America Forward plan has been a great success and is humanely addressing the root cause of migration. The Biden White House is committed to a comprehensive strategy that will create sustainable and ethical solutions to mass migration. In just two years, the administration has made great strides.

Republican narrative

Harris has resorted to political stunts to hide from the fact that she and Biden have utterly failed to address the US border crisis. The US government cannot control what happens in other nations and should focus on efforts at home to secure America’s border and keep its people safe. Long-term plans sound nice, but they do nothing to stop tens of thousands of migrants from flooding into America every day.

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