Know someone who would like this newsletter? Forward it to them.
The World
Global military spending rose to a record last year as Russia's war in Ukraine drove the biggest annual increase in expenditure in Europe since the end of the Cold War three decades ago, a leading conflict and armaments think tank said. World military expenditure rose by 3.7% in real terms in 2022 to $2.24 trillion, the Stockholm International Peace Research Institute (SIPRI) said. (Reuters, Axios)
China respects the status of former Soviet member states as sovereign nations, its foreign ministry said, after comments by its envoy to Paris triggered an uproar among European capitals. Several EU foreign ministers had said earlier that comments by ambassador Lu Shaye - in which he appeared to question the sovereignty of Ukraine and other former Soviet states - were unacceptable and had asked Beijing to clarify its stance. (Reuters)
US war games touch nerve in Philippines as tensions flare with China: Remote islands could become front line in possible future conflict over Taiwan. (Financial Times)
China should speed up the development of laser weapons to keep pace with the swift progress made by the United States, Chinese military analysts have said. The US GAO said last week that the Pentagon is spending US$1 billion a year on developing directed energy weapons to counter threats such as drones and missiles. It said much recent research has focused on making laser weapons small and light enough to be used by one person, but is still facing a challenge in moving beyond the prototype stage. Laser weapons are seen as a good solution to the use of drone swarms, which have been widely used in modern conflicts such as the Ukraine war. (South China Morning Post)
India's dependence on Russian oil has increased to account for 30% of its imported total in March, according to a Nikkei analysis of shipping data. India, which had previously relied almost exclusively on the Middle East, imported more than 6 million tonnes of Russian oil last month. Western sanctions stemming from Moscow's invasion of Ukraine have made oil from Russia relatively inexpensive, leading to the shift in procurement. (Nikkei Asia Review)
Russia said the U.S. has denied visas to journalists who wanted to cover Foreign Minister Sergey Lavrov’s trip to New York, and Lavrov suggested that Moscow would take strong retaliatory measures. There was no immediate comment from the U.S. State Department about the claim of refused visas. The journalists aimed to cover Lavrov’s appearance at the United Nations to mark Russia’s chairmanship of the Security Council. (Associated Press)
President Yoon Suk Yeol lands in Washington, DC, today for a busy week of political engagements to coincide with the 70th anniversary of South Korea’s alliance with the US. Yoon’s agenda is vast. Amid growing concern about North Korea’s bellicose behavior, he aims to get reassurance from Washington that it has its back. This comes after a recent survey found that 54.2% of South Koreans think the US would not risk its safety to defend South Korea from a nuclear attack by Pyongyang. While in Washington, Yoon will largely be playing for a domestic audience. Facing a disapproval rating of 75% and increasing antipathy back home, Yoon hopes to convince voters that he can effectively advocate for South Korea's foreign policy interests. This includes addressing Seoul’s concerns over the US Inflation Reduction Act, particularly provisions on electric vehicles that South Korea says violate international trade rules. (GZERO Media)
The White House asked South Korea to encourage its chipmakers not to sell their products to China if Beijing bans Idaho-based Micron Technology Inc. South Korea is home to Samsung Electronics Co Ltd. and SK hynix Inc., the other major players in the market. (Financial Times)
As fighting in Sudan between two warring army factions entered its second week, a wave of countries evacuated their embassies in Khartoum, the Sudanese capital. The Pentagon said it had flown in Navy Seals and Army Special Forces for a mission that lasted less than one hour and resulted in around 70 diplomats and family members being flown out. Still, the US State Department has said that evacuating the 16,000 American citizens there, mostly dual nationals, remains a long shot. The Netherlands, Canada, Japan, Italy, and other countries say they are conducting similarly complex operations as Khartoum’s airport remains closed amid ongoing bombardments. (GZERO Media)
Canada Government Strike Drags On With Harsh Words, No Progress. Canada’s massive civil service strike is poised to drag into its second week as the federal government and the union representing more than 155,000 federal workers trade barbs amid tense and slow negotiations. Federal workers, including 35,000 from the Canada Revenue Agency, the country’s tax-collection body, have been on strike since Wednesday over wages and return-to-work policies. Still, the federal government has said it isn’t ready to force the civil servants back to work. (Bloomberg)
Economy
Return to pandemic hunger levels could signal economic fragility. As economists and investors scour data on inflation, jobs, housing, banking and other bellwether indicators to determine whether the United States is headed for a recession, a visit to the nation’s largest food-bank warehouse offers some ominous clues. More than half of the shelves at the Atlanta Community Food Bank are bare, in part because of supply-chain issues, but mostly because demand for food assistance is as high as it was during the COVID-19 pandemic, the nonprofit’s executives said. They said two in five people seeking food assistance in the Atlanta region this year have not done so before. (Reuters)
Hedge Funds Place Biggest Ever Short on Benchmark Treasuries. (Bloomberg)
Car Dealer Markups Helped Drive Inflation, Study Finds. Markups on new cars were a key force behind the current bout of inflation, according to new research published this month. Those extra dealer profits contributed between 0.3 and 0.7 percentage point of the nearly 16% rise in the consumer-price index between the end of 2019 and the end of 2022, a study published in a U.S. Bureau of Labor Statistics journal found. (Wall Street Journal)
Amazon, Google, Microsoft, Meta and Intel headline a busy earnings week for tech: The results will offer clues about how companies fared as the recent banking crisis, layoffs in sectors such as technology and inflation weighed on the economy. Amazon, Microsoft and Google-parent Alphabet are expected to show further slowdowns in cloud-computing growth following a weak December quarter. (Wall Street Journal)
There is no banking crisis: Morgan Stanley CEO James Gorman. Silicon Valley Bank's failure, along with the demise of Credit Suisse shortly thereafter, blindsided the global financial industry. Despite those shocks, the world is not in a banking crisis, Morgan Stanley Chairman and CEO James Gorman said in an interview. Conditions are vastly different now than they were in 2008, when Lehman Brothers collapsed and triggered a global financial crisis, Gorman added. (Nikkei Asia)
It is a phenomenon that has become known as “the flattening”: Tech companies which hired middle managers in droves during the pandemic boom are now slicing out the layer as they make mass job cuts. But across the tech sector, the position, valued by some workers as a vital bridge between a company’s bosses and its staff, but mocked by others as the height of bureaucratic mediocrity, is now in peril. Tech companies, which have made more than 170,000 lay-offs this year, according to the crowdsourced database layoffs.fyi, have focused in on the role as they aim to improve efficiency and cut costs. (Financial Times)
Bud Light Brewer Puts Two Executives on Leave After Uproar Over Transgender Influencer. (Wall Street Journal)
Technology
China Says Chatbots Must Toe the Party Line: Five months after ChatGPT set off an investment frenzy over artificial intelligence, Beijing is moving to rein in China’s chatbots, a show of the government’s resolve to keep tight regulatory control over technology that could define an era. The Cyberspace Administration of China unveiled draft rules this month for so-called generative artificial intelligence — the software systems, like the one behind ChatGPT, that can formulate text and pictures in response to a user’s questions and prompts. According to the regulations, companies must heed the Chinese Communist Party’s strict censorship rules, just as websites and apps have to avoid publishing material that besmirches China’s leaders or rehashes forbidden history. The content of A.I. systems will need to reflect “socialist core values” and avoid information that undermines “state power” or national unity. (New York Times)
Apple Will Take Scattershot Approach to Pitching AR/VR Headset: When Apple Inc. set out to develop a headset about seven years ago, it hired a former NASA engineer who had used augmented and virtual reality to explore Mars. The big question at the time: Why would an ordinary consumer need such a device?As the company gets ready to unveil the product in June, that question is still hanging in the air. Apple hasn’t really found a killer app that will make the roughly $3,000 headset a must-have item. Instead, it’s trying another tactic: throwing everything but the kitchen sink at consumers. Apple plans to pack the headset with a variety of features — games, fitness services, even an app for reading books in virtual reality — and hope that buyers find something they like. (Bloomberg)
The voice note boom. Often called a "voice message" or "audio message," the form is beloved by generations who grew up with screens and were supposedly abandoning phone calls and voicemails. There's a lot that could be behind the rising popularity of the voice note, whether it's COVID-related isolation, long-distance bonding or plain old efficiency of walking and talking with no scheduling required. Plus, a group chat studded with voice memos can be like "a real-time podcast that has not stopped," says Katie Perry, a 36-year-old working in tech in New York. For anyone with issues using their arms or hands, voice notes can be an easier way to communicate than texting. By the numbers: A recent YouGov poll conducted by Vox found around 30% of respondents communicate via voice note "weekly, daily or multiple times a day," with around 43% of respondents between 18 and 29 years old saying they do so at least weekly. (Axios)
Twitter Restores Blue Check Marks for Some, Wanted or Not: After Twitter last week purged blue check marks from the accounts of users who hadn’t subscribed to its Twitter Blue service, the once coveted badges began reappearing this weekend on high profile Twitter users’ accounts without their permission. Actor Ian McKellen, the Massachusetts Institute of Technology and podcaster Jon Favreau were among the many Twitter users who saw the blue check marks reappear on their accounts, even though they tweeted they aren’t paying the $8 a month fee Twitter charges for its Twitter Blue program. (Mashable)
Smart Links
Tech Billionaires Bet on Fusion as Holy Grail for Business. (Wall Street Journal)
Alphabet Lowered CEO Pichai’s Stock Award Target 23% to $210 Million. (The Information)
Bed Bath & Beyond Inc. filed for bankruptcy protection to wind down its business. (Wall Street Journal)
Disney leans into values amid Florida feud with DeSantis. (Axios)
Lack of snow condemns Italy's Po River to a desperately dry summer. (Associated Press)