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The World
The US is prepared to address China’s “increasing level of aggressiveness” in the Taiwan Strait and South China Sea after Beijing conducted two “unsafe” intercepts in recent days. The warning from John Kirby, National Security Council spokesperson, underscores increasing US alarm over dangerous interactions between US and Chinese forces in international air and sea lanes. It comes as Beijing has rebuffed American attempts to re-establish military communications between the countries. Kirby said the intercepts were “part and parcel” of an “increasing level of aggressiveness” by China’s People’s Liberation Army, particularly in the area around the Taiwan Strait and South China Sea. (Financial Times)
French president Emmanuel Macron has objected to a Nato proposal to open an office in Tokyo because he believes the transatlantic security alliance should remain focused on its own north Atlantic region. The resistance from France has complicated months of discussion within Nato to create the alliance’s first outpost in the Indo-Pacific region, according to eight people familiar with the situation. The push to open a small base in Tokyo next year comes as the US and Japan urge Europe to become more involved in Asia security issues, particularly as concern mounts about possible Chinese military action against Taiwan. (Financial Times)
Ukrainian mechanized forces launched their broadest assault in months on Russian positions, Moscow said on Monday, as Kyiv’s preparations for a major counteroffensive to retake occupied territory gained momentum. Ukraine has said it won’t announce the start of its new campaign, which defense analysts expect to take the form of a major armored thrust that aims to break through dug-in Russian positions in the east and south of Ukraine. (Wall Street Journal)
Rishi Sunak on Tuesday flies to Washington on a two-day mission to prove that Britain remains an important player on the world stage following recent political and economic convulsions in the UK. The UK premier will meet Joe Biden, hoping to convince the US president that Britain has a key role to play in global security and forging a regulatory framework for artificial intelligence. But the EU and US, the west’s two big power blocs, are already discussing ways to regulate AI and the UK’s Labour opposition claims that Britain has become less relevant in Washington. (Financial Times)
Doctors are coalescing around the ironic idea that for some cancer treatment, less can be better. Some patients with cervical and pancreatic cancer can do as well with less invasive surgery, according to research presented at the American Society of Clinical Oncology conference in Chicago over the weekend. Other studies at the annual meeting showed some patients with rectal cancer or Hodgkin lymphoma can safely get less radiation. The findings expand a body of evidence doctors are using to design treatment plans that aim to reduce side effects and costs. They call the strategy de-escalation: cutting back on some therapies to improve a patient’s quality of life without hurting their odds of survival. (Wall Street Journal)
Jamie Dimon to Meet With Group of House Democrats today: JPMorgan chief has been urged to run for president in 2024; Dimon spokesman says he has no plans to seek political office. (Bloomberg)
Walmart tops Fortune 500 for 11th consecutive year: The Fortune 500, in its 69th year, ranks the biggest U.S. companies by revenue. The top 10 alone posted $3.7 trillion in revenue, and they were omnipresent in American life from the grocery aisle to the doctor’s office to the gas pump. (Fortune)
Economy
Big Banks Could Face 20% Boost to Capital Requirements: U.S. regulators are preparing to force large banks to shore up their financial footing, moves they say will help boost the resilience of the system after a spate of midsize bank failures this year. The changes, which regulators are on track to propose as early as this month, could raise overall capital requirements by roughly 20% at larger banks on average, people familiar with the plans said. The precise amount will depend on a firm’s business activities, with the biggest increases expected to be reserved for U.S. megabanks with big trading businesses. (Wall Street Journal)
US banks prepare for losses in rush for commercial property exit: Some US banks are preparing to sell off property loans at a discount even when borrowers are up to date on repayments, a sign of their determination to reduce exposure to the teetering commercial real estate market. The willingness of some lenders to take losses on so-called performing real estate loans follows multiple warnings that the asset class is the ‘next shoe to drop’ after the recent turmoil in the US regional banking industry. (Financial Times)
A top official at the IMF has warned of the risk of “substantial disruptions in labour markets” stemming from generative AI, as she called on policymakers to quickly craft rules to govern the new technology. In an interview with the Financial Times, the fund’s second-in-command Gita Gopinath said AI breakthroughs, especially those based on large-language models such as ChatGPT, could boost productivity and economic output but warned the risks were “very large”. (Financial Times)
U.S. regulators sued Binance and its CEO Changpeng Zhao for allegedly operating a "web of deception," piling further pressure on the world's biggest cryptocurrency exchange and sending bitcoin to its lowest in almost three months. The SEC complaint, filed in a federal court in Washington, D.C., listed 13 charges against Binance, Zhao and the operator of its purportedly independent U.S. exchange. The SEC alleged that Binance artificially inflated its trading volumes, diverted customer funds, failed to restrict U.S. customers from its platform and misled investors about its market surveillance controls. (Reuters)
Bitcoin drops below $26,000 after SEC sues crypto exchange Binance. (CNBC)
Japan's yen is weakening again, prompting talk of another intervention worth billions of dollars. The Japanese yen traded just north of 140 against the U.S. dollar, after the currency breached that level at the end of last month for the first time since November. Last year, Japan's Finance Ministry intervened to prop up the yen on three separate days: Sept. 22, Oct. 21 and Oct. 24 — as the currency notched 150 against the greenback, weakening to levels not seen since 1990. (CNBC)
Japan's real wages dropped for 13th straight month in April. (Nikkei Asia Review)
Technology
Apple Vision Pro:
Apple unveiled its long-awaited “mixed reality” headset, in its most anticipated hardware product launch since Steve Jobs revealed the iPad in 2010. The gadget, called Vision Pro, will be available “early next year”. It combines virtual reality with augmented reality, which overlays digital images on top of the real world. Apple said it would sell for $3,499, even more than most analysts had expected and nearly 12 times the price of Meta’s Quest 2, the biggest-selling VR headset. The Vision Pro is the biggest gamble on a product yet from chief executive Tim Cook, who took over from Steve Jobs in 2011. Cook has long been hailed as an operations genius who took Apple’s market value up from about $350bn in 2011 to nearly $2.9tn currently, but he has long been criticized for iterating on past ideas and delaying projects such as the Apple Car. Tim Bajarin, consultant at Creative Strategies, said the headset’s launch should “cement Cook’s legacy” beyond operations. “This won’t put him in the same class at Steve, but Steve was a standalone visionary. Cook has carried his vision into the future,” he said. (Financial Times)
Apple Vision Pro specs: 12 cameras, five sensors, and six mics, an M2 and a new R1 chip, a digital crown, 23M pixels, and Zeiss lenses for vision correction. (TechCrunch)
Apple’s $3,499 Vision Pro Headset Will Test Marketing Might. (Bloomberg)
I Tried the New Mixed-Reality Headset: What did you see inside there? Apple showed me a selection of demos. To me, there are really just two compelling use cases for this thing right now: (Wall Street Journal)
Working: Maybe the office is actually better in a face computer. I was able to scatter a few apps in the space over the coffee table—Messages, Notes and Safari. Instead of having multiple monitors, you could just put these virtual screens around your room. Apple showed it working with a keyboard and trackpad in its keynote, but I didn’t get to try that. I was also able to have a FaceTime chat with an Apple employee—except it wasn’t just video of her, it was a 3-D version of her.
Watching: After decades of 3-D TV promises, the time is…now? Believe me, I’m skeptical. I never opt for 3-D showtimes but I was surprised by how into the 3-D clip of “Avatar: The Way of Water” I got.
At the end of the demo, I took off the headset and felt two things: 1) Wow. Very cool. 2) Did I just do drugs?
Watch the Vision Pro presentation:
Smart Links
West Coast States Rode Tech Boom. Now They Face Higher Unemployment, Falling Wages. CA, OR, WA have some of nation’s highest jobless rates. (WSJ)
Morgan Stanley Plans Move to New Singapore Office in Growth Boom. (Bloomberg)
Hollywood actors seek new deal over use of AI ‘digital doubles’. (Financial Times)
The money behind the coming wave of climate litigation. (Financial Times)
China's top VCs warn dollar fundraising will only get tighter. (Nikkei Asia Review)