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The World
US officials see weakened Putin as Russia turmoil reveals 'cracks': The unprecedented challenge to Russian President Vladimir Putin by Wagner fighters has exposed fresh "cracks" in the strength of his leadership that may take weeks or months to play out, U.S. Secretary of State Antony Blinken said. Blinken and members of the U.S. Congress said in a series of television interviews that Saturday's turmoil in Russia has weakened Putin in ways that could aid Ukraine's counteroffensive against Russian forces within its territory while benefiting Russia's neighbors, including Poland and the Baltic states. "I don't think we've seen the final act," Blinken said on ABC's "This Week" program after an aborted mutiny by forces led by Yevgeny Prigozhin. (Reuters)
Why Wagner Chief Prigozhin Turned Against Putin: The full story behind why Prigozhin launched—then stunningly halted—his revolt isn’t yet known. After years of rapid growth that saw Wagner play a leading role in Putin’s invasion of Ukraine, the mercenary outfit was facing pressure. Russia’s defense ministry was tightening the noose around the company, starving it of recruitment, finance and weapons. Putin, who long promoted rivalries among his subordinates to prevent succession challenges, was siding with defense chiefs against Prigozhin, a former convict who had grown up in the same St. Petersburg streets as the president. A key trigger was the June 10 Russian defense ministry order that all volunteer detachments would have to sign contracts with the government by July 1, a move to bring Wagner under formal military control. Prigozhin refused. (Wall Street Journal)
One Big Winner of Kremlin-Wagner Clash? The Dictator Next Door. The strongman leader of Belarus, a dependable ally of Vladimir Putin’s, may see a chance to rebrand himself as a statesman. (New York Times)
Elite law firms flock to dealmaking Saudi Arabia amid global M&A drought: A flurry in dealmaking by Saudi Arabia is attracting some of the biggest names in the legal sector to the Gulf state, as it seeks to compensate for a decline in M&A activity in Europe and the United States. Kirkland & Ellis, the world’s largest law firm by revenue, said it was “actively considering” its options in Riyadh, which it described as “an important market for international business and one of the world’s fastest-growing economies”. It would join US firms Latham and Watkins, Greenberg Traurig and Squire Patton Boggs in flocking to the world’s largest oil exporter, alongside Dentons and UK-based Clifford Chance and Herbert Smith Freehills. (Financial Times)
Greece's conservative New Democracy party stormed to victory in a parliamentary election on Sunday with voters giving reformist Kyriakos Mitsotakis another four-year term as prime minister. With most votes counted, centre-right New Democracy was leading with 40.5% of the vote and 158 seats in the 300-seat parliament, interior ministry figures showed. It was more than 20 points clear of Syriza, a radical leftist party that won elections in 2015 at the peak of a debilitating debt crisis and ran the country until 2019, when it lost to New Democracy. (Reuters)
A far-right Alternative for Germany (AfD) candidate won a vote to become a district leader in Europe's biggest economy for the first time, a breakthrough for the party which has hit record highs in national polls. The 10-year old AfD, with which Germany's mainstream parties officially refuse to cooperate due to its radical views. It is the latest success for the party which is riding a wave of popular discontent with Social Democrat Chancellor Olaf Scholz's awkward coalition with the Greens and Free Democrats which is dogged by infighting over policy and the budget. Polling at 19%-20%, behind the opposition conservatives, the AfD is tapping into voter fears about recession, migration and the green transition, say analysts. It even plans to nominate a chancellor candidate in the 2025 federal election. (Reuters)
Cocaine demand and supply are booming worldwide and methamphetamine trafficking is expanding beyond established markets, including in Afghanistan where the drug is now being produced, a United Nations report said on Sunday. Coca bush cultivation and total cocaine production were at record highs in 2021, the most recent year for which data is available, and the global number of cocaine users, estimated at 22 million that same year, is growing steadily, the U.N. Office on Drugs and Crime said in its annual World Drug Report. (Reuters)
Oil prices rose in early Asian trade on Monday after a failed mutiny by Russian mercenaries over the weekend raised concerns about political instability in Russia and the potential impact on oil supply from one of the world's largest producers. Brent crude futures rose 95 cents, or 1.3%, to $74.80 a barrel by 2300 GMT on Sunday. U.S. West Texas Intermediate (WTI) crude was at $70.04 a barrel, up 88 cents, or 1.3%. (Reuters)
Economy
Governments must raise taxes or cut public spending after central banks kept interest rates too low for too long in the face of higher inflation, according to the Bank of International Settlements. Closing the gap between government income and expenditure would “calm inflation”, according to the annual report from the Basel-based organisation, which advises 63 central banks covering 95% of global economic output. Governments that embarked on spending cuts or tax rises would reduce business and consumer demand and be a critical part of the “last leg” in the battle to tame inflation, which despite an intense run of interest rate rises by central banks around the world is far from over, the institution warned in a press release alongside the annual report. This final drive would also be the “hardest” however, in the fight to cool the sharp rate of price growth. (The Guardian)
Global Inflation Risk Rises Despite Lower Prices, Economist Says. (Bloomberg)
Eviction filings are 50% higher than they were pre-pandemic in some cities as rents rise. After a lull during the pandemic, eviction filings by landlords have come roaring back, driven by rising rents and a long-running shortage of affordable housing. Among the hardest-hit are Houston, where rates were 56% higher in April and 50% higher in May. In Minneapolis/St. Paul, rates rose 106% in March, 55% in April and 63% in May. Nashville was 35% higher and Phoenix 33% higher in May; Rhode Island was up 32% in May. (Associated Press)
The first half of 2023 has been a colossal disappointment for media executives who wanted this year to be a rebound from a terrible 2022, when a slowdown in streaming subscribers cut valuations for Netflix, Disney, Warner Bros. Discovery and Paramount Global roughly in half. Instead, investors have once again become excited by Netflix’s future prospects as it’s cracked down on password sharing, potentially leading to tens of millions of new signups. Netflix shares have surged the past five months, outpacing the S&P 500. Meanwhile, the legacy players can’t get out of their own way. (CNBC)
Emerging stock markets projected to overtake the U.S. by 2030: The stock market capitalization of emerging markets is forecast to eclipse that of the U.S. and other developed markets in less than a decade. Emerging markets' share of the global equity market is expected to rise from around 27% currently to about 35% in 2030, 47% in 2050, and 55% in 2075. India is expected to have the largest increase in global market cap share — from a little under 3% in 2022 to around 8% in 2050 and 12% in 2075 — reflecting a favorable demographic outlook and rapid GDP per capita growth. China's share is forecast to rise from 10% to about 15% by 2050 but amid a demographic-led slowdown in potential growth, it's expected to then decline to around 13% by 2075. EM market capitalization is projected to exceed the U.S. by the end of this decade. The U.S.'s share of global equity market capitalization is projected to fall from 42% in 2022 to around 35% in 2030, 27% in 2050, and 22% in 2075. (Goldman Sachs)
Technology
Apple Has Finally Unveiled the Vision Pro. Here’s What It’s Launching Next: An M3 13-inch MacBook Pro (codenamed J504). M3 Pro and M3 Max 14-inch and 16-inch MacBook Pros (codenamed J514 and J516). New iMacs (codenamed J433 and J434) with 24-inch screens, like the current models. The company is also conducting early work on an iMac with a screen over 30 inches, I’m told. New MacBook Air models (codenamed J613 and J615). Revamped iPad Pros with OLED screens (codenamed J717 and J720). A new iPad Air (codenamed J507) to replace the current M1-based model. (Bloomberg)
Former Y Combinator partner Daniel Gross and former GitHub CEO Nat Friedman have raised a venture fund for artificial intelligence that is already worth more than $1 billion. The duo last week made waves by offering startups in their portfolio access to a substantial number of servers powered by the most advanced chips for training AI models, which are in short supply. (The Information)
A.I.’s Use in Elections Sets Off a Scramble for Guardrails. What began a few months ago as a slow drip of fund-raising emails and promotional images composed by A.I. for political campaigns has turned into a steady stream of campaign materials created by the technology, rewriting the political playbook for democratic elections around the world. Increasingly, political consultants, election researchers and lawmakers say setting up new guardrails, such as legislation reining in synthetically generated ads, should be an urgent priority. Existing defenses, such as social media rules and services that claim to detect A.I. content, have failed to do much to slow the tide. (New York Times)
The bigger-is-better approach to AI is running out of road. When it comes to “large language models” (llms) such as gpt—which powers Chatgpt, a popular chatbot made by Openai, an American research lab—the clue is in the name. Modern ai systems are powered by vast artificial neural networks, bits of software modelled, very loosely, on biological brains. gpt-3, an llm released in 2020, was a behemoth. It had 175bn “parameters”, as the simulated connections between those neurons are called. It was trained by having thousands of gpus (specialised chips that excel at ai work) crunch through hundreds of billions of words of text over the course of several weeks. All that is thought to have cost at least $4.6m. (The Economist)
As AI Spreads, Experts Predict the Best and Worst Changes in Digital Life by 2035: They have deep concerns about people’s and society’s overall well-being. But they also expect great benefits in health care, scientific advances and education. (Pew Research Center)
42% of these experts said they are equally excited and concerned about the changes in the “humans-plus-tech” evolution they expect to see by 2035.
37% said they are more concerned than excited about the changes they expect.
18% said they are more excited than concerned about expected change.
2% said they are neither excited nor concerned.
2% said they don’t think there will be much real change by 2035.
Smart Links
Japanese Prime Minister Kishida's approval rating sinks to 39%. (Nikkei Asia Review)
Renewables growth did not dent fossil fuel dominance in 2022, report says. (Reuters)
Tonga volcano eruption triggered most intense lightning on record. (Axios)
Pete Buttigieg Warns of Flight Delays as 5G Deadline Looms. (Wall Street Journal)
Barry Diller Ends Talks to Sell The Daily Beast. (New York Times)
The 10 AI Startups Leading the Pack. (Bloomberg)