From the US accusing China of spying to AI bots being a little too good at copying art styles – Here’s your October 26 news briefing
To start off, we’re looking into:
The US accuses China of spying
In 2019, the US began a probe into Chinese company Huawei for stealing trade secrets from T-Mobile and committing bank fraud by breaking sanctions and doing business with Iran. The company has been in US crosshairs since former President Trump’s administration, as the government was concerned it could pass sensitive information to China through its communications networks.
On Monday, the US Department of Justice announced charges against two Chinese spies for interfering in the Huawei investigation. Guochun He and Zheng Wang allegedly bribed a US law enforcement official multiple times for confidential information about the case. The US says they paid the FBI double agent around US$61,000 in Bitcoin.
During the announcement, a total of 13 indictments across three unrelated cases were detailed concerning suspected Chinese intelligence operatives. In the past week, the US charged 11 other individuals for covert actions on behalf of the PRC.
Wall Street eyes the potential of Saudi Arabia
After Crown Prince Mohammed bin Salman (MBS) announced his plan to open the country to foreign investors and become a supply chain hub, Wall Street is looking to Saudi Arabia more often for investment opportunities – despite US-Saudi political tensions, which increased recently after OPEC+’s decision to cut oil production.
Starting Tuesday, global leaders, bankers and inventors were headed to Saudi Arabia for the flagship 6th Future Investment Initiative (FII), also known as “Davos in the Desert.” The conference lasts in Riyadh from October 25-27. Many Wall Street bigwigs were among the attendees, including JPMorgan’s CEO Jamie Dimon.
This is an opportune time for MBS to showcase his future economic vision because, while the rest of the world is experiencing inflation, surging oil prices and the fear of recession, Saudi Arabia’s economy has become the fastest-growing within the G20. S&P expects the country to have around 8% GDP growth in 2022.
Hong Kong’s Jimmy Lai found guilty
Do you remember the Hong Kong protests that broke out and gained traction in 2019? Well, the city is still feeling the affects of those. In fact, a few major names have been dealing with the waves brought on by their links to the demonstrations. One of those people is media mogul Jimmy Lai, who founded the folded pro-democracy tabloid called Apple Daily.
In response to the protests in Hong Kong, Beijing created a new national security law to crack down on dissent in early 2020. Lai was arrested and later sentenced to prison for participating in demonstrations.
On Tuesday, Lai was found guilty of two counts of fraud, adding to his prior convictions, for which he was already serving a 20-month sentence. Lai and two of his former executives were found guilty for subletting part of their office, which allegedly broke the leasing agreement. He faces another trial later this year for sedition and colluding with foreign forces. Lai’s lawyers have pressured Western governments to react and asked the UN to investigate the charges.
To end, we’ll look into:
Does AI art plagiarize?
Recently, we’ve seen the popularity of AI image generators skyrocket. With platforms like DALL-E, NightCafe and Midjourney, this phenomenon has flooded the internet. If you’re unfamiliar with how this concept works – by using short text descriptions generated by the user, these AI bots create entirely new images by collecting a dataset of text-image pairs from the net. You can type anything, and DALL-E will try to synthesize your idea into an image. And then, you own that new image. This is a fun and useful tool for concept visualization.
Because users can generate any images they want, though, it’s become trendy to request pieces in specific artists’ styles. Like looking up “Crocs in Van Gogh’s style.” We did this, and the images are pretty neat. But it’s not so neat when this same thing happens to a living, working artist.
For instance, if you search Polish artist Greg Rutkowski’s name online, thousands of images that he didn’t create come up. His unique art expression is really popular among AI image generator users. “I feel like something’s happening that I can’t control,” Rutkowski says. “My name is being used a lot to generate AI images, along with the names of other working artists.” There are about 93,000 AI-generated images related to his work.
In that same vein, Swedish artist Simon Stålenhaggained has his own opinion on the matter. “I have always felt (and stated so here in the past) that taking ideas from other artists is a cornerstone of a living, artistic culture. It’s the impetus for new art.” At the same time, he explains on Twitter: “What I don’t like about AI-tech is not that it can produce brand new 70s rock hits like ‘Keep On Glowing, You Mad Jewe’ by Fink Ployd, but how it reveals that that kind of derivative, generated goo is what or new tech lords are hoping to feed us in their vision of the future.”
In other news …
📈Stocks: MSCI’s global gauge of stocks is at 2537.50.
- Dow Jones up 1.07% to 31,836.74.
- Nasdaq Composite up 2.25% to 11,199.12.
- S&P 500 up 1.63% to 3,859.11.
- Hang Seng Index down 0.10% to 15,165.59.
🧠Some quick factors to bear in mind:
- In the US, stocks rose again, recording three consecutive days of gains in a bullish month. Despite consumers’ concerns over inflation and rising interest rates, they’re still spending.
- Today, the earnings of General Motors, Coca-Cola and UPS reported strong profits and sales for Q3, giving investors a positive outlook.
- The bond market experienced its biggest selloff in 2022 because of the Fed’s aggressive interest rate hikes. Among all the major tech companies, Apple has been hit the hardest by this because it has about half of its cash reserves in corporate bonds.
- The market is eyeing the next central bank meeting on Wednesday, as the Fed has raised interest rates at the last three meetings to fight inflation. And, investors are also looking forward to the broadcast measure of the economy – the US GDP report being released on Thursday.
- Meanwhile, in Hong Kong, the market pared back some losses, landing just 0.1% at the close of trading on Tuesday, as investors looking for a good deal picked up undervalued stocks after Monday’s major crash. The Hang Seng Technology Index soared 6.1% at one point.
👄Some comments and chatter:
- “It’s a rainbow after a pretty big storm. We’re seeing enough slowing in the economy that we don’t have to worry about the Fed really raising rates beyond what’s already priced,” said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management, referring to Tuesday’s bond moves and inflation data. “I think we’re finally getting to the place where the market has priced in the right amount of Fed tightening. Once you do that, the uncertainty in the market falls and we could see higher prices.”
- “Volatility of Hong Kong’s stocks will remain elevated going forward as the bout of the selling is largely sentiment-driven,” said Wang Chen, a partner at Xufunds Investment in Shanghai. “While no one knows where the bottom is, the value of Hong Kong stocks now stands out.”
🛢Oil: Oil prices are rising higher with a lift from a weaker dollar and supply concerns. US crude rose to US$$85.32, and Brent ended at US$93.52 per barrel.
👛Bitcoin: Bitcoin was up 3.98% to US$20,099.50 at the time of writing.
😢Deaths following West Bank raid: At least five Palestinians were killed during an Israeli military raid in the city of Nablus in the West Bank on Tuesday, according to the Palestinian Ministry of Health, and a sixth person was shot dead by Israeli soldiers in the city of Nabi Saleh. Thousands flocked to the streets in mourning during a funeral procession for the men killed.
💣Myanmar military airstrikes: On Sunday, at least 50 people were reportedly killed in a military airstrike in Myanmar’s Kachin state. Victims were at an event organized by the Kachin Independence Army to mark the anniversary of its political wing, the Kachin Independence Organization. ASEAN foreign ministers will hold a meeting in Indonesia on Thursday to discuss the ongoing crisis in Myanmar.
😷Uganda’s Ebola outbreak: Ugandan officials reported 20 more cases of Ebola since Sunday, about a month after an outbreak in a remote part of the country. So far, there have been 95 cases of Ebola since September 20 and 28 related deaths. There are currently 33 active cases there.
💲Japan’s economy minister resigns: Monday, Japan’s economic revitalization minister Daishiro Yamagiwa resigned over his links to the Unification Church, an organization that has been causing a major stir in Japanese politics. Opposition parties have been demanding his resignation for about a month now. Japan’s PM Kishida appointed former health minister Shigeyuki Goto as his replacement on Tuesday.
📉China’s stock meltdown: This weekend, after Xi reorganized his cabinet and secured a third term, Chinese stocks nosedived in the worst selloff since 2008. China’s tech giant, Alibaba, fell about 80% from its peak in October 2020, and the country’s richest tycoons lost more than US$35 billion in the plunge. There was a slight rebound on Tuesday as investors continued to speculate on China’s zero-COVID policy and economic future.
👨💼Rishi Sunak takes office: Tuesday, Rishi Sunak officially took office as Britain’s third prime minister this year. He’s already recognized the mistakes that Conservative Party PMs have made in the past few months and has promised to revive the economy and political space in the UK. His first move so far was to remove about a dozen members of Truss’ Cabinet.
❗WhatsApp outage: WhatsApp, one of the world’s most popular messaging services, was completely down in several countries for two hours Tuesday morning, including Britain, India and South Korea. The blackout also affected Hong Kong. Meta, which owns WhatsApp, said the problem had been fixed but didn’t give a reason for the outage.
👩⚖️Britney Griner’s appeal: On Tuesday, WNBA star appealed in a Russian court her 9-year sentence for alleged drug smuggling, which she lost. The US and Russian governments have talked about a possible prisoner exchange involving Griner, but no one is sure if that’s going to happen.
👟Ye loses Adidas deal: The lineup of brands dropping Kanye West has just become longer, with Adidas joining its ranks. Adidas, which produces West’s popular Yeezy sneaker line, will no longer support the creator due to concerns over his recent antisemitic comments. The company is absorbing an earnings hit up to US$247 million.
⛽Europe’s gas surplus?: Just a couple of months ago, Europe was scrambling to store gas for the upcoming winter as it prepared sanctions against Russian gas imports. No one was sure the efforts would pay off, but now Europe has more gas stored than it can use. The combo of unusually warm weather and retrieving enough cargo has caused storage facilities to pretty much fill up before the cold weather has come in.
🎓Anti-cheating hats: Students at a school in Legazpi City, Philippines, were asked to wear headgear to prevent cheating. And they responded with ridiculous homemade hats made from cardboard, egg boxes and other materials. Now, these students have gone viral with their latest fashions.
Written and put together by Joey Fung, Vanessa Wolosz, and Christine Dulion