From Pelosi’s likely trip to Taiwan to Tesla-branded cocaine in Mexico – Here’s your August 2 news briefing

From Pelosi’s likely trip to Taiwan to Tesla-branded cocaine in Mexico – Here’s your August 2 news briefing
U.S. Secretary of State Antony Blinken addresses the United Nations General Assembly during the Nuclear Non-Proliferation Treaty review conference in New York City, New York, U.S., August 1, 2022. REUTERS/David ‘Dee’ Delgado

To start off, we’re looking into:

Iran can create a nuclear bomb, but it probably won’t

In 2018, Donald Trump’s administration rejected the 2015 Iran Nuclear Deal, again laying sanctions on the country. When that happened, Iran also dropped the agreement, violating the terms set out. Then in late June, the US and Iran met in Qatar but, after indirect discussions, didn’t decide on the deal. While Iran has denied an interest in nuclear weapons for decades, Western leaders hold doubt over these denials.

As Iran continues to say it’s not interested in nuclear weapons, recent comments have made people doubt Iran’s claims more. After President Biden returned from visiting Israel and Saudi Arabia, Kamal Kharazi, the Iranian Minister of Foreign Affairs, said on Monday that Iran has the capability of making an atomic weapon, but he added that it doesn’t plan to do so. Meanwhile, on Monday, UN Secretary-General Antonio Guterres said during a conference that, amid rising global tensions, the world is just one “miscalculation” away from a nuclear war and that we’ve been “extraordinarily lucky so far.” US Secretary of State Antony Blinken also stressed that revisiting the 2015 nuclear deal will be the best move for the United States, Iran and the world.

Nancy Pelosi will likely visit Taiwan after all

Pelosi Taiwan
FILE PHOTO: U.S. House Speaker Nancy Pelosi (D-CA) faces reporters during a news conference at the U.S. Capitol in Washington, U.S., July 29, 2022. REUTERS/Jonathan Ernst/File Photo

Although the US doesn’t have official diplomatic ties to Taiwan, the country believes in Taipei’s right to self-defense and has sent weapons there to support this stance. Still, no US Speaker of the House has visited since Newt Gingrich in 1997. Over the past couple of weeks, it’s been unclear if Speaker Nancy Pelosi would go to Taiwan on her tour through Asia. China has warned against it, even suggesting that her plane could be shot down.

Now, though, Pelosi is expected to turn up in Taiwan. President Biden’s national security and military advisers still caution Pelosi about taking the trip, but she’s likely to go anyway, according to US and Taiwanese officials familiar with the itinerary. Although her plans are unconfirmed officially, it looks like she’ll arrive without an announcement. In the meantime, National Security Council spokesman John Kirby confirmed that the visit doesn’t change the status quo and the US doesn’t support Taiwan’s independence from China. The White House expects more of a response from China but said it would not be intimidated.

How is North Korea using crypto to avoid sanctions?

North Korea crypto
North Korea’s leader Kim Jong Un speaks during a ceremony to mark the 69th anniversary of the Korean War armistice, in Pyongyang, North Korea, in this photo released July 27, 2022 by North Korea’s Korean Central News Agency (KCNA). KCNA via REUTERS

For a long time now, North Korea has been heavily sanctioned. To fund all the different things its government wants to do, though, the country has had to turn to some creative money-making schemes.

One of those schemes was uncovered by the US back in May, and a recent investigation by cybersecurity firm Mandiant Inc confirmed it. Basically, North Korean IT workers living abroad were stealing resumes from LinkedIn to get jobs in the crypto realm. Nearly identical language was found on multiple accounts, and the idea was that once inside these crypto companies, these IT workers could access trends and information that would allow the North Korean government to launder crypto better.

Some of these things were broad trends, such as the price of certain currencies or things like NFTs. But others were things like security vulnerabilities that the North Korean government would be able to take advantage of. All of them would be loopholes around international sanctions on the country and would effectively fund a government that the world is working hard to make sure isn’t funded. The North Korean government has denied any involvement in cyber theft.

To end, we’ll look into:

Tesla-branded cocaine seized in Mexico

We all have that one friend who just takes the joke way too far until, at best, it’s not funny anymore or, at worst, someone gets hurt.

Well, back in April, Elon Musk posted a tweet saying that he was buying Coca-Cola so that he could put the cocaine back into it. Of course, most everyone considered this a joke. That is, until Friday when Mexican authorities busted four men in two tractor trailers right outside of Mexico City, hauling 1.6 tons of cocaine stamped with Tesla and Prada branding through the city.

It isn’t unheard of for drug smugglers to use brands as a sort of code to tell other smugglers the quality of the drug, the type of drug or where that drug is headed. But so far, it isn’t clear whether or not the Tesla branding was for any of those purposes or rather just as a joke because of Elon’s recent tweet.

Either way, the four men smuggling the drugs from Colombia were arrested. They’re part of the Sinaloa cartel, which has in the past gotten into bloody firefights with police officers in Mexico. Mexico City Police Chief Omar Harfuch estimated that the cocaine had a street value of around US$20 million or roughly the price of 400 Tesla Model 3s.

It’s undoubtedly for the best that Musk isn’t connected to this highly-illegal business venture, though, as he has his hands already pretty full.

In other news …

📈Stocks: MSCI’s gauge of stocks worldwide gained 0.06%.

📰Some specifics:

  • The Dow Jones Industrial Average fell 0.14% to 32,798.4.
  • The S&P 500 lost 0.28% to 4,118.61
  • The Nasdaq Composite dropped 0.18%, to 12,368.98.
  • Hang Seng gained less than 0.1% to 20,165.84.

🧠Quick factors to bear in mind:

  • For all the major US indexes, July was their best month since 2020.
  • The Institute for Supply Management (ISM) showed that US manufacturing activity continued to expand in July for the 26th straight month, but at the slowest pace since mid-June 2020. The better-than-expected data helped sentiment.
  • Meanwhile, Europe and Asia saw their factory activity slowing.
  • More data about the labor market will come out this week, which will be important since the strong labor market is one of the most cited reasons why some think the US isn’t in a recession even though the economy has seen two consecutive quarters of negative growth.
  • After being at an 11-week-low, Hong Kong stocks increased, with HSBC reporting stronger-than-expected earnings.

👄Some comments and chatter:

“Markets may test the substantial rally that occurred last week as they consider the progress the Federal Reserve has made thus far to stem the course of inflation," wrote John Stoltzfus, Oppenheimer’s chief investment strategist, in a note.

“It’s a consolidation. Investors are waiting to see if we get follow through or continue it’s downward trend … There seems to be a comfort level that economy is slowing but demand isn’t going to collapse. Is the Fed going to take its foot off the gas pedal and stop raising rates? That would appear to be what the market is watching. It’s a tug-of-war between those that think the market has already fully discounted the economic slowdown and those that feel it hasn’t," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

🛢Oil: US crude fell 4.73% to US$93.89 per barrel. Brent fell 3.94% to US$100.03 per barrel. This comes after the global factory data all came out and weighed on the demand outlook. Meanwhile, OPEC is meeting on August 3, which many are prepping for to see what will happen when it comes to world supply.

👛Bitcoin: Bitcoin fell 1.45% to US$22,970.

🤝Prisoner swap between Washington and Moscow: According to people familiar with the situation, Russia is leaning toward turning down the US offer to exchange WNBA player Brittney Griner and former US Marine Paul Whelan for convicted Russian arms dealer Viktor Bout. The sources say that Moscow doesn’t think the deal is fair and wants two prisoners in exchange.

🏔Al Qaeda head killed: A US counterterrorism operation in Afghanistan over the weekend killed the leader of al-Qaeda, Ayman Al-Zawahiri. He was the leader of Al Qaeda that took over after Osama Bin Laden and helped plan the September 11 attacks. More on this tomorrow.

📆Biden’s deadline: According to senior administration officials, Biden hasn’t yet decided what to do about the bunch of tariffs his predecessor Trump put on Chinese goods and has until midnight to do so. The reevaluation of these tariffs also comes when Biden is trying to ease consumer costs amid decade-high inflation.

🌾Grain shipments: After Ukraine and Russia struck a deal to let grain exports pass, easing grain prices, the first shipment from Ukraine has finally departed from the port of Odesa. Zelenskiy called it a “positive signal." Meanwhile, The White House has announced a newUS$550 million military aid package for Ukraine.

🟢New Zealand reopens: New Zealand’s borders have fully reopened for international travelers on Monday for the first time since COVID started.

📿Tiffany’s NFT: Tiffany and Co announced its first NFT collection called NFTiff. CryptoPunk holders can get a diamond and gemstone pendant at 30 ETH each, which is, at the time we’re writing this, around US$52,573.

🎤Bey changes a lyric: Beyonce is changing a lyric in her song “Heated" on her new album “Renaissance" after it received backlash for including the word “spaz," a slur against people with disabilities.

Written and put together by Jake Shropshire, Vanessa Wolosz, Christine Dulion and Krystal Lai