Geopolitics
On Russia’s side of the war in Ukraine, Russian warships, including a nuclear-powered submarine, arrived in Cuba. Here is the same event covered by the South China Morning Post, under the headline “Russia’s formidable Kazan nuclear submarine arrives in Cuba under watchful US eyes”.
Russia also began the second stage of its tactical nuclear weapon drills with Belarus, and expands nuclear drills to areas bordering NATO states. Our forecasting team’s estimates on the probability of a nuclear weapon being used this year were 0.5%, 0.6%, 1%, and another 1%.
And on the eve of a peace summit in Switzerland, Putin said that Russia would end the war in Ukraine only if Kyiv agreed to drop its NATO ambitions and hand over the entirety of four provinces claimed by Moscow. These would be Donetsk, Kherson, Luhansk and Zaporizhzhia Oblasts. Ukraine said the conditions were absurd. Indeed if we look at the map of the conflict, that would give Russia big chunks that Ukraine currently controls or are contested, including the Zaporizhzhya and Kherkov cities.
On Ukraine and NATO’s side, G7 leaders agreed to lend Ukraine $50 billion using the interest accrued from frozen Russian assets. The US and Ukraine signed a 10-year security agreement, but this means little given that the Administration could change in November. If Biden is re-elected as president, this signals that the US is likely to continue to support Ukraine’s war efforts.
The US widened Russian sanctions in a banking crackdown. The United States has expanded its programme targeting foreign banks that it considers are aiding Russia’s war effort in Ukraine. Sanctions were also placed on the Moscow stock exchange, leading to it stop trading in dollars and euros.
As a background fact, Ukraine drone operators apparently look like this
The US-Saudi Petrodollar pact ended after 50 years. Forecasters were surprised that this agreement was allowed to expire. Potentially, Saudi Arabia ceasing to denominate oil in dollars, and not buying treasuries and US stocks could lower the strength of the dollar, which would have downstream effects on the US economy. However, it could also just be a nothingburger, as the arrangement may have outlived its usefulness since 1974.
Bismarck Analysis points out that China isn’t pursuing energy independence. “The world’s largest importer of oil and gas has the territory and reserves to vastly increase production. But Beijing continues to bet instead on seaborne trade, prioritizing growth over war.” This is a positive signal, and should somewhat reduce concerns of an imminent US-China war over Taiwan.
It has been reported that the Pentagon ran a secret anti-vax campaign in the Philippines to undermine China. For background reading, a report by CSIS outlines how China could quarantine Taiwan.
Macron called snap elections in France, but they are only parliamentary elections and he will be in office until 2027. So this shouldn’t directly impact France’s defense and security stance—like agreements with Ukraine. Forecasters thought that this boded well for Le Pen’s National Rally, with recent polling suggesting that her party could become the largest in the National Assembly. French markets have reacted negatively to the decision to call an election.
Benny Gantz quit Israel’s war cabinet, which arguably increases the probability that Israel takes a more aggressive stance toward Hezbollah in the north, where rocket attacks continue, as Israel’s far-right ministers (Ben Gvir and Smotrich) may now have greater clout. However, it doesn’t directly impact the stability of the government as Gantz’s party was not part of the coalition that garnered a majority.
Conflict between Hezbollah and Israel continues to heat up. After Israel killed a top Hezbollah commander, Hezbollah responded with a barrage of more than 200 rockets. Hezbollah has been drawing on more of its arsenal in the conflict, but declares that it has no interest in a full-scale war.
South Korea is resuming loudspeaker propaganda for the first time since 2018, after an agreement with North Korea to de-escalate the border ended last week when North Korea sent trash balloons over the border.
Biorisk
The CDC has been infecting ferrets with H5N1. A study in ferrets of the H5N1 strain obtained from a dairy worker gives evidence that the virus is likely not yet highly contagious in humans, but could spread human-to-human with close contact. It also showed that the virus was highly lethal in ferrets. However, flu virus lethality is highly dose-dependent. Clearly, as the human case was not fatal, the infection is not always fatal. However, many are arguing that not enough surveillance is being done in the US.
Also on H5N1 news, sampling among dairy cattle suggests that H5N1 transmission among cattle is most likely mostly respiratory.
Tiger mosquitoes behind dengue fever rise in Europe. “An invasive species of mosquito has set up home in 13 countries in the EU, including France, Spain and Greece, with experts linking their presence to a rise in dengue fever in Europe.”
Artificial Intelligence
Pope Francis has reiterated his message on Artificial Intelligence, telling the G7 that AI must never be allowed to get the upper hand over humanity.
Microsoft first denied, but then later admitted that GPT-4 was secretly deployed in India without approval by OpenAI and Microsoft’s joint Deployment Safety Board.
Following a Chinese hack of Microsoft that stole, amongst others, a trove of emails from the US State Department, a harsh US Cyber Safety Review Board report of that hack, Microsoft testified this before the US Congress. Microsoft’s representative made the right noises and vowed to make cultural changes and implement recommendations. But the details of Microsoft prioritizing profit and growth over security are pretty gruesome. The forecaster most interested in this topic thinks it’s not clear that cultural changes are enough, as rapid commercial expansion of its cloud, built atop legacy platforms, might just outright make Microsoft a bad choice for security-sensitive matters over other cloud platforms.
OpenAI has appointed the previous director of the NSA to its board of directors. This might bring security improvements, but also a closer coupling with the US security apparatus.
Misc
The sun is continuing to spout X-class solar flares. AR 3006 released an X1.5 solar flare. These low-level X-class flares are not a substantial concern in and of themselves, but we are heading towards solar maximum and can expect to see more of them.
The extreme heatwave in Pakistan is making parts of the country unlivable. Many parts have been over 50C/120F. And summer is just getting started.
G7 leaders have launched a global food security initiative.