Know someone who would like this newsletter? Forward it to them.
The World
Joe Biden said he was “confident” of reaching a deal with Congress to avoid an unprecedented default on US debt, as he left the door open to meeting a central Republican demand and adding new work requirements to anti-poverty programs. The president spoke from the White House on Wednesday as he prepared to travel to Japan for the G7 leaders summit, with the fiscal stand-off in Washington emerging as a huge risk to the global economy and financial system. (Financial Times)
Biden gives clearest indication to date he’s willing to make a critical debt ceiling compromise: Biden left the door open to expanding some work requirements as part of a debt ceiling deal, committing only to opposing new restrictions that affect health care programs. “I’m not going to accept any work requirements that’s going to impact on medical health needs of people,” he said, before adding that “it’s possible” a deal could expand work rules for other federal programs. (Politico)
Senate Democrats ask Biden to ready 14th Amendment, bypass GOP on debt limit. (Washington Post)
President Xi Jinping is stepping up efforts to boost China’s influence in Central Asia by hosting his first in-person regional summit dedicated to tightening ties with an area traditionally dominated by Russia. With Moscow weakened and distracted by the war in Ukraine, the two-day summit that starts on Thursday is a chance for Beijing to push for stronger economic and political relationships with five strategically important former Soviet republics — Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan. (Financial Times)
Russia has admitted “problems” with oil and gas revenues that have fallen to their lowest levels in years, underscoring the impact of western restrictions on Moscow’s primary engine for funding its war in Ukraine. Finance minister Anton Siluanov acknowledged issues during a public video conference with President Vladimir Putin on Wednesday, blaming “all these discounts” in explaining why energy revenues fell by more than 50 per cent in the first quarter of this year. (Financial Times)
Heat Will Likely Soar to Record Levels in Next 5 Years: Global temperatures are likely to soar to record highs over the next five years, driven by human-caused warming and a climate pattern known as El Niño, forecasters at the World Meteorological Organization said. The record for Earth’s hottest year was set in 2016. There is a 98 percent chance that at least one of the next five years will exceed that, the forecasters said, while the average from 2023 to ’27 will almost certainly be the warmest for a five-year period ever recorded. “This will have far-reaching repercussions for health, food security, water management and the environment,” said Petteri Taalas, the secretary general of the meteorological organization. “We need to be prepared.” (New York Times)
In Italy, nine people died and thousands have been evacuated from their homes after heavy storms wreaked havoc in the northern Italian region of Emilia-Romagna, causing severe flooding and landslides. People sought refuge on the rooftops of their homes after 21 rivers broke their banks, submerging entire towns. (The Guardian)
Formula 1 Cancels Grand Prix Amid Deadly Floods in Italy. (New York Times)
Penguin Random House is suing a Florida school district for banning several of its books, in the latest pushback by companies and organizations against “anti-woke” actions by US political conservatives. The publisher joined forces with Pen America and a group of affected authors after it claimed the Escambia County School Board “unlawfully removes or restricts access to books about race, racism, and LGBTQ+ identities”. (Financial Times)
Economy
US commercial real estate prices fell in the first quarter for the first time in more than a decade, according to Moody’s Analytics, heightening the risk of more financial stress in the banking industry. The less than 1% decline was led by drops in multifamily residences and office buildings, data culled by Moody’s from courthouse records of transactions showed. (Bloomberg)
Global debt tops US$300 trillion, and emerging markets owe more than ever: The world’s debt nearly set a record high in the first quarter of 2023, with sharp increases in mature markets, according to the Institute of International Finance. Findings come as senior Chinese finance officials have been reiterating concerns over capital outflows from emerging markets, whose debt is up 34 per cent since 2019. (South China Morning Post)
Aging populations are hitting public finances across the world, with rating agencies warning that recent interest rate rises have increased the impact of higher pensions and healthcare costs. As interest rates soar in response to the biggest surge in inflation for a generation, Moody’s, S&P and Fitch have all warned that worsening demographics are already hitting governments’ credit ratings. They add that downgrades are likely without sweeping reforms, threatening to create a vicious circle of higher fiscal burdens and rising borrowing costs. (Financial Times)
Here’s How Much Wealth You Need to Join the Richest 1% Globally: It takes $12.4 million to join Monaco’s wealthiest group; the US, by comparison, requires $5.1 million to make the cut. (Bloomberg)
Technology
AI threatens humanity’s future, 61% of Americans say: Reuters/Ipsos poll. he swift growth of artificial intelligence technology could put the future of humanity at risk, according to most Americans surveyed. 61% of respondents believe that AI poses risks to humanity, while only 22% disagreed, and 17% remained unsure. Those who voted for Donald Trump in 2020 expressed higher levels of concern; 70% of Trump voters compared to 60% of Joe Biden voters agreed that AI could threaten humankind. (Reuters)
An Apple Headset Is Coming. Can It Be More Than a Nerd Helmet? With the iPod, iPhone and Apple Watch, uncool gadgets got cool. Now the company is taking on mixed-reality goggles. Apple is expected to announce a mixed-reality headset in 2023. Thanks to the iPhone, Apple has a massive 2-billion-person installed base, but convincing customers to purchase a pricey headset could be a challenge. When the tech company released the iPod and Apple Watch, those markets ballooned. Will the AR/VR headset market do the same? (Wall Street Journal)
Google plans to use new AI models for ads, customer service, and to help YouTube creators, and is working on an internal Stable Diffusion-like product. (CNBC)
An update to Google's Personal Safety app for Android suggests the company plans to offer a Dashcam recording feature for Pixel phones and other select devices. (9to5Google)
Montana Governor Greg Gianforte signed legislation to ban Chinese-owned TikTok from operating in the state to protect residents from alleged intelligence gathering by China, making it the first U.S. state to ban the popular short video app. Montana will make it unlawful for Google and Apple's app stores to offer TikTok within the state, but will not impose any penalties on individuals using the app. The ban is to take effect Jan. 1, 2024, and is almost certain to face legal challenges. (Reuters)
Smart Links
U.S. Recorded Nearly 110,000 Overdose Deaths in 2022. (New York Times)
China to convene Central Asian leaders to counter G-7 summit; Xi aims to bolster ties on security, Belt and Road projects. (Nikkei Asia Review)
Tesla to start advertising more. (Axios)
Netflix Advertising Tier Now Has “Nearly Five Million” Monthly Active Users. (The Hollywood Reporter)
NY MTA Lost $690 Million Last Year to Fare And Toll Evasion. (Bloomberg)