Global Street Smarts.
Happy Thursday.
Here’s today’s ITK Daily.
To be ITK, know this:
Wagner’s Prigozhin planned to capture Russian military leaders: WSJ reports Western intelligence officials say Russian domestic intelligence agency learned of the plot in advance.
Putin moves to seize control of Wagner’s global empire: The Kremlin assured nations in Africa and the Middle East that it would manage Wagner forces, which have spread Russian power at little cost to Putin. WSJ
Putin freezes out hardliners after Wagner mutiny: Russian president’s security forces ‘have started shaking down sympathizers’ of the exiled warlord. FT
Putin’s standing as global strongman in jeopardy after revolt: WP reports the Wagner Group mutiny has jolted assumptions about Vladimir Putin’s autocratic credentials and Russia’s stability.
Gaming out Russia’s future: A succession fight involving nukes, a private military up for grabs, an ascendant Belarus — it’s all on the table in a post-Wagner mutiny world. Politico
+ All eyes are on Moscow — but no one knows what they’re looking at.
+ Putin’s next act: Repression? More war? Ousted?
+ Wagner’s next boss: Putin? Prigozhin? Belarus?
+ The mutinous Wagner Group is, remarkably, not dead yet. Who it’s working for, however, is unclear.
+ The nukes’ next owner: The Russian state? A future mutineer?
+ Russia’s vast nuclear arsenal is one element that sets it apart from most other countries undergoing political tumult.
+ Officials are more than happy to see Putin weakened — but they also want to see nuclear weapons in stable hands.
+ “I have very high confidence that their nuclear weapons remain secure and under the command of the 12th GUMO,” William Alberque, a former director of NATO’s arms control center said, referring to a directorate of the Russian Ministry of Defense that manages Russia’s nuclear arsenal.
Why this may be the beginning of the end for Putin Benjamin Hart
+ Shoigu is not a soldier by trade. I don’t think he has ever been in the armed forces. Prosecuting wars is not his core competency — navigating bureaucracy is.
Reuters: Most Americans support US arming Ukraine, Reuters/Ipsos poll shows
German defense minister vows stronger geopolitical role ahead of US visit: NYT reports in an interview before his first official trip to Washington, Boris Pistorius made clear he is intent on helping the United States by taking a more assertive stance.
China stepped in to support the yuan for a third time this week, once again signaling a limit to its tolerance for weakness in the currency.
US resilience is a problem Xi wishes he had: Beijing’s measures to buttress growth are underwhelming. Traders know it, and so does the PBOC. Daniel Moss
+ It may only be a slight exaggeration to say that the biggest economic surprise of 2023 has been the resilience of the US. The widely anticipated American recession keeps being shelved. For all of China’s broadsides at Western capitalism, that’s a problem Xi Jinping would love to have.
+ The weakening yuan has got authorities’ attention.
+ The bank this week guided the starting point for daily trading higher. Christopher Wong, a strategist at Oversea-Chinese Banking Corp. in Singapore, saw the shift in so-called “fixing” as indicative of official concern.
+ China remains in fear of too much stimulus.
+ That’s a legacy of 2008, when it helped lift the world economy out of recession, but saddled many local companies with vast debts.
+ Why doesn’t the PBOC just do a large scale QE like the rest of the world?
Bloomberg: Yellen says she hopes to meet new leaders on possible China trip
IDF will run entirely on generative AI within a few years - Israeli cyber chief: "I estimate that within a few years, every area of warfare will be based on generative AI information," Maj.-Gen. Eran Niv said. Jerusalem Post
+ “Artificial intelligence is a phenomenon which is trending and expanding, with a focus on generative AI. This is a revolution which is increasing our capabilities, but in parallel increasing our reliance on digital infrastructure in every area.”
+ “I estimate that within a few years, every area of warfare will be based on generative AI information. Without a strong and effective digital basis, no one will be able to prosecute a war in any area,” said the Israel Defense Forces (IDF) cyber chief.
+ Niv stated, “Without a strong digital basis, we will not be able to manage large operations.”
+ “The digital arena will transform all of the other areas of war into being stronger – in the air, in the sea, and on the land.”
Le Monde: Unrest grips France for a second night following fatal police shooting of teenager
Biden touts ‘Bidenomics’ as antidote to failed trickle-down policies: FT reports the US president defends his economic record in Chicago speech as he faces tough re-election fight.
WP: Embracing ‘Bidenomics,’ president seeks to turn insult into strength
Bidenomics and America’s new New Deal: It is always better to have a plan than none, a lesson Republicans seem to have forgotten. Edward Luce
+ Tim Geithner, the former US Treasury secretary, famously said “plan beats no plan” during the 2008 financial crisis.
+ The irony is that Joe Biden’s own plan contains key elements of what Mr Trump promised in 2016: to modernise US infrastructure and protect the “forgotten American.”
+ The logic of Bidenomics is simple. The cost of borrowing is free.
+ The US is in the midst of a national crisis. Its infrastructure is no longer first world, and unemployment is at a generational high.
+ It seems like a good moment to enter the 21st century with the “largest mobilisation of public investments” since the second world war, as the Biden campaign puts it.
+ Some have likened America’s 2020 situation to 1932.
+ A better analogy would be to 1963, when Lyndon Johnson became president after the assassination of John F Kennedy. Much like Barack Obama, JFK moved a nation with his poetry but struggled to write its legislative prose. Mr Biden, like Johnson, is a creature of the Senate. He knows how the sausage is made. It was LBJ who enacted Kennedy’s civil rights agenda.
Why Bidenomics gets no love from voters: Legislative wins on infrastructure and industrial policy are overshadowed by inflation hangover of stimulus, pandemic, and war. Greg Ip
+ Biden kicked off a national campaign Wednesday pitching his economic record to a deeply skeptical public.
+ “Bidenomics” is about expanding the middle class, bolstering infrastructure, and bringing manufacturing back from overseas.
+ This doesn’t really distinguish Biden from other presidents, though. Don’t they all want a stronger middle class, more infrastructure and more factories?
+ His early agenda was also not particularly novel. The Rescue Plan was old-fashioned Keynesian demand stimulus, notable mostly for its sheer size.
+ Biden’s staff designed it with the economy of 2009 in mind, when newly elected President Barack Obama and Biden, his vice president, faced a deep recession to be followed by a sluggish, yearslong recovery.
+ Inflation is the main reason voters disapprove of Biden’s handling of the economy by a two-to-one ratio, according to a May poll by the Associated Press and NORC Center for Public Affairs Research.
+ Nor is it likely to change Biden’s political prospects: The effects on voters’ lives are small and gradual, whereas the effects of inflation and unemployment are big and immediate.
+ Part of Bidenomics represents a break with the past in ways stimulus didn’t. It is also popular: All three laws are backed by voters by large margins, according to polls by Morning Consult, and the infrastructure and semiconductor bills garnered Republican support in Congress. This likely confers staying power long beyond the next election, when inflation has faded from the headlines.
Twice-indicted Trump dominates GOP race, as support for DeSantis stalls: WP reports on the campaign trail, Donald Trump draws enthusiastic crowds that reflect his wide lead in the polls. Voters seeking an alternative have yet to coalesce behind Ron DeSantis or anyone else.
WP: Lordstown Motors files for bankruptcy and sues Foxconn
Are you a really bad person for buying Shein? Known for its low prices and on-trend manufacturing process, the retailer faces backlash after an influencer trip to its China headquarters. DC lawmakers are asking questions, too. WP
+ Known for its low prices and on-trend manufacturing process, the retailer faces backlash after an influencer trip to its China headquarters. DC lawmakers are asking questions, too.
+ Brands increasingly invite influencers behind the scenes for such trips to “tell the stories that maybe they have a hard time telling themselves,” said James Nord, founder of the influencer marketing agency Fohr Card.
+ The backlash came quickly from fast-fashion experts who were outraged that influencers were blithely reciting the public relations spin of the controversial company.
+ Writers Aja Barber and Cora Harrington picked apart the PR optics of the invited influencers and called it propaganda. One TikToker parodied the video by dressing in turn-of-the-century clothes and pretending she was taking a similar trip to the Triangle Shirtwaist Factory, a sweatshop that was the scene of a deadly fire in 1911. Others gathered evidence alleging that the factory was staged.
+ Shein is not only in the influencer crosshairs. Two bills were introduced in Congress earlier this month that would affect its shipping costs, and lawmakers including Sen. Marco Rubio (R-Fla.) have urged their colleagues to scrutinize Shein. Rep. Mike Gallagher (R-Wis.) has made the company a focus of his newly formed Select Committee on the Chinese Communist Party.
+ Because of its vertical integration, Shein can churn out products at a breakneck pace. What can take another clothing business months to produce, Shein can often make in days.
Nvidia warns of lost opportunities if US bans AI chip exports to China: WSJ reports potential new restrictions could come with a hefty long-term cost for the American chip industry—and another setback for US relations with Beijing.
Microsoft and Activision CEOs fight for their $75bn deal in court hearing: FT reports the judge could decide as early as next week whether to grant a US regulator’s request to put the gaming acquisition on ice.
Microsoft CEO says $75 billion Activision deal won’t block competition: WSJ reports Satya Nadella and Activision CEO Bobby Kotick said the Call of Duty franchise and other games will be available to competitors after the acquisition.
TikTok is paying the legal fees of five creators on its platform who have sued Montana over the state’s new law banning the video app.
Linda Yaccarino’s vision for Twitter 2.0 emerges: CEO hits the ground running with plans for new advertisement offering while telling staff to be ready for ‘hand-to-hand combat.’ FT
+ One idea is to is launch full-screen, sound-on video ads that would be shown to users scrolling through Twitter’s new short-video feed, according to three people familiar with the situation.
+ Yaccarino also plans to meet media partners, publishers and talent agencies in a bid to bring celebrities, political figures and other content creators to the platform.
+ Twitter’s new ad format, which is still in beta stage, is part of a renewed focus on video. It introduced the ability to support longer-form video earlier this year before launching a TikTok-style short-video feed last week.
+ She is going to invest in re-building the advertising, sales and partnership team, a requirement she negotiated with Musk upon joining
+ Yaccarino told employees at the recent global sales meeting she wanted to engage more with the press, and was planning to present her vision via Twitter Spaces, the platform’s audio feature, in the first week of August, according to one person familiar with the matter.
+ She is in talks about a broader partnership with Google that would include advertising and access to some of Twitter’s data, according to someone familiar with the matter, and hopes to similarly renegotiate multiple contracts with tech groups such as Amazon, Salesforce and IBM into single broader partnerships.
+ The company had a small presence at the Cannes advertising festival last week led by Chris Riedy, its vice-president of global advertising sales, who announced before the event that Twitter was soliciting bids from third parties offering services that “give advertisers more control and transparency on the context in which their ads serve.”
AI salesbots are coming for your cash: Regulators take aim at Amazon and other companies over confusing websites that seek to maximize revenue. Brooke Masters
+ Regulators have stepped up their war on what they call “dark patterns” — menu after menu of confusing options aimed at maximising spending and deterring cancellations. That’s needed, as companies use data mining, algorithms and sophisticated artificial intelligence to suck customers in and keep them sweet.
+ The US Federal Trade Commission sued Amazon last week, contending that it had “tricked and trapped people into recurring subscriptions” to its Prime service.
+ Businesses will soon be able — if they cannot already — to predict not just what to offer but also what time of day a purchase is most likely. Real-time emotion-sensing technology could be used to press offers at vulnerable moments.
+ Just as predictive autofill inserts errors into texts, a sophisticated generative AI could search for and pre-fill purchase information in ways that benefit sellers rather than offering buyers a full range of choices.
+ It is one thing to tempt customers with personalised offers. It is something else entirely to exploit their weaknesses to get them to pay for services they do not need.
The case for a digital euro: While many harbor concerns over privacy, having a new way to pay throughout the eurozone would definitely help consumers. Mairead McGuinness
+ While we make payments using our digital wallets, what we don’t have yet is a digital form of cash. That means something that can be used just as cash is today: legal tender, that can be accepted everywhere, and that can be exchanged one-for-one with physical cash.
+ Like the physical euro, the digital euro could be used anywhere in the eurozone. It would have a similar function to cash — providing access to a reliable and easily accessible form of payment, but digitally. So, first, it would ensure that the euro continues to play a key role in our lives.
+ Second, a digital euro could support financial inclusion. People without bank accounts or other vulnerable groups rely heavily on cash, which can put them at risk as cash is used less. The digital euro would give everyone a digital option to pay — and it could even be used without a bank account.
+ Third, a digital single currency could support innovation. Europe’s current payment systems are national or international — we don’t have truly European options, and are overly reliant on companies such as Visa, Mastercard, or PayPal.
+ Having a new way to pay throughout the eurozone would definitely help consumers. But it would also help European financial service providers, allowing them to expand payment solutions across the single market. And, as existing payment options would continue to be available, it wouldn’t change the role of commercial banks.
FTX begins talks on reboot amid regulatory crackdown on crypto exchanges: WP reports the failed crypto company is in initial discussions with investors about relaunching its international exchange.
WP: National Geographic lays off its last remaining staff writers
Astronomers detect gravitational waves from colossal black holes: Le Monde reports a research team has succeeded in measuring vibrations in the universe capable of altering the distance between the Earth and a pulsar 4,000 light years away by 37 meters.
In a major discovery, scientists say space-time churns like a choppy sea: The claim of a gravitational wave background suggests the universe is constantly roiled by violent events that happened over the past 13 billion years. WP
+ The very fabric of the cosmos is constantly being roiled and rumpled all around us, according to multiple international teams of scientists that have independently found compelling evidence for long-theorized space-time waves.
+ The claim that telescopes across the planet have seen signs of a “gravitational wave background” has sent a thrill through the astrophysics community, which has been buzzing for days in anticipation of the papers that were unveiled late Wednesday.
+ The discovery seems to affirm an astounding implication of Albert Einstein’s general theory of relativity that until now has been far too subtle to detect.
+ In Einstein’s reimagined universe, space is not serenely empty, and time does not march smoothly forward. Instead, the powerful gravitational interactions of massive objects — including supermassive black holes — regularly ripple the fabric of space and time.
+ The picture that emerges is a universe that looks like a choppy sea, churned by violent events that happened over the course of the past 13 billion-plus years.
+ The gravitational wave background, as described by the astrophysicists, does not put any torque on everyday human existence. There is not a weight-loss discovery in here somewhere. A burble of gravitational waves cannot explain why some days you feel out of sorts. But it does offer potential insight into the physical reality we all inhabit.
+ No matter the signal’s source, the announcement of a gravitational wave background represents a milestone in the embryonic field of gravitational wave astronomy.
+ Just as some astronomers use different wavelengths of light to probe the cosmos, they can now look for different types of gravitational waves.
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal
Caracal produces ITK Daily.
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