>>> Weekend Papers Summary

Weekend Papers Summary

NEW YORK TIMES
-Putin Says Ukraine’s Counteroffensive Has ‘No Chance’ at Economic Forum. By claiming to be in control at a pivotal moment, critics say, President Vladimir Putin can no longer pass any of Russia’s military failures off on others.
-After meeting with African leaders on a peace mission, President Zelensky of Ukraine suggested that their plans were unrealistic.
-3 Years after George Floyd’s death, ‘Defund the Police’ movement has faltered. “Defund the police” became a rallying cry after George Floyd’s death, but efforts to do away with conventional policing have largely been abandoned. The Justice Department accused the Minneapolis Police Department of discrimination and unlawful conduct in a scathing report.
-Daniel Ellsberg, Who Leaked the Pentagon Papers, Is Dead at 92
Deeply disturbed by the accounting of American deceit in Vietnam, he approached The New York Times. The disclosures that followed rocked the nation. Months before his death, Daniel Ellsberg spoke with Times Opinion about his life’s work.
-Jury Convicts Man in Killing of 11 in Pittsburgh Synagogue
The gunman was found guilty of dozens of federal hate crimes and civil rights offenses. Jurors will next hear arguments about a death sentence.
The massacre at the Pittsburgh synagogue in October 2018 is considered to be the deadliest antisemitic attack in U.S. history.
-The Business of Being Chris Christie
After leaving the governor’s office in New Jersey, Mr. Christie traded on his political profile — and on his ties to the man he now wants to defeat.

THE FINANCIAL TIMES
-New York based Global Tiger is falling short in its latest attempt to lure new investors, securing just over $2bn for a fund targeting $6bn after eight months, underscoring concern over valuations of technology companies.
-Investors are having to adjust to the prospect of interest rates across major economies staying higher for longer than expected, after central banks warned the battle against inflation is still not yet won.
-Microsoft co-founder and philanthropist Bill Gates met Xi Jinping on Friday, in one of the first contacts between a high-profile US business figure and China’s president in recent years amid rising geopolitical tensions.
The meeting, in which Xi referred to Gates as an “old friend”, came ahead of US secretary of state Antony Blinken’s expected visit to Beijing this weekend, which was initially postponed in February by a dispute over a suspected Chinese spy balloon.
-Over the years, Waltine Nauta has been pictured carrying a variety of objects in Donald Trump’s vicinity: mobile phones, a red tie, a briefcase. But it was cardboard boxes that have landed the personal aide in legal peril alongside his boss. Nauta was charged last week as an alleged co-conspirator in the Department of Justice’s case over Trump’s handling of classified documents, making him part of the first federal indictment brought against a former US president.
-Boris Johnson has urged his allies not to oppose a damning report that found he lied to MPs about the partygate scandal, increasing the likelihood that he may avoid a humiliating parliamentary vote about his conduct.
-The technology behind the ChatGPT chatbot could be available in toys as soon as 2028 and used to teach or even instill values such as not telling lies, said Allan Wong, the chair and chief executive of VTech Holdings, which owns US-based LeapFrog and already develops electronic learning products. Smart toys could use “AI to generate stories customised for the kid rather than reading from a book.”
-Germany, the powerhouse of continental Europe, was the only country (except Italy) in the G7 club of the world’s greatest industrial democracies without a national security strategy.
-Italy has approved measures to limit the shareholder rights of the Chinese chemical group Sinochem in Pirelli, the Milan-listed tyremaker and set out a wider range of sectors that the government judges to be of national security importance.
-Greek authorities were facing growing pressure on Friday over claims they could have acted earlier to help migrants on a ship that sank this week, killing at least 78 people and leaving hundreds missing.

NY POST
-President Biden unexpectedly ended a speech on gun control Friday by saying, “God save the Queen, man” — after warning his audience they could be liable for the actions of people who steal their cars. The 80-year-old president’s signoff confounded listeners, including journalists in the room at the University of Hartford’s campus in Connecticut. “Several of you have asked me why he might have said that,” Todd Gillman of the Dallas Morning News wrote in a pool report describing the moment. “I have no idea. Other poolers likewise have no idea.”
-Two United Airlines cargo agents at San Francisco International Airport orchestrated a years-long scheme to steal marijuana from departing passengers’ luggage and then raked in as much as $10,000 per week selling the contraband, the feds said. Joel Lamont Dunn was described as the mastermind and Adrian Webb his “right hand man” behind the brazen ring involving other cargo agents at the airport, according to a criminal complaint filed with the US District Court of Northern California on June 9.

NYT Dealbook : DealBook: The $460 billion space business

DealBook: The $460 billion space business

Legal black holes
Elon Musk, Jeff Bezos and Richard Branson are racing to establish a presence in space. But what rights and obligations come with that?

It’s not clear what the rules are, even as the $460 billion space industry is growing quickly.

Virgin Galactic, the space tourism company founded by Branson, announced on Thursday that it would launch its first commercial spaceflight this month, joining Bezos’ Blue Origin, and Musk’s SpaceX in sending ticketed passengers to space. But travel is just one emerging corner of the industry, which is mostly fueled by U.S. and international government contracts. The sector includes companies in the fields of satellites and communications, solar power, manufacturing, and even mining. One, Orbital Assembly, hopes to open a luxury extraterrestrial hotel by 2025.

Citigroup analysts project that space businesses will reach a trillion dollars in revenue by 2040.

All this activity raises legal questions.

In theory, space belongs to everyone. In 1967, as the United States and the Soviet Union were building up their nuclear arsenals, the United Nations signed a treaty that says no country can claim territory in space. “We didn’t want to bring the Cold War into space,” Michelle Hanlon, co-director of the air and space law program at the University of Mississippi, told DealBook.

Since then, a U.N. space committee has made four more treaties and five sets of principles covering areas like arms control and liability for damage caused by space objects. All are premised on the notion that space “should be devoted to enhancing the well-being of all countries and humankind, with an emphasis on promoting international cooperation.”

That perspective is about to collide with reality, said Curt Blake, a space lawyer at Wilson Sonsini Goodrich & Rosati and the former C.E.O. of a space start-up. “Humans have done such a bad job regulating anything of common good, like the oceans and air,” he said. “Are we going to be better at caring for the moon?”

One upcoming test is a race between China and the United States to get to the poles of the moon to mine water, which could make it possible to produce fuel in space. There is little understanding of what will happen when they both get there.

“Will they live on separate sides or dot their bases?” Hanlon asked. “We don’t know because we have these regulatory gaps.”

Another potential conflict is brewing over 170 million pieces of debris like satellites abandoned in the Earth’s orbit, known as “space trash,” because their accumulation makes exploration more difficult and dangerous. Since nobody owns space, it isn’t always clear whose responsibility it is to clean it up. In September, the Federal Communications Commission adopted rules ordering companies to take down nonfunctioning satellites within five years, down from 25 years.

Lawyers are wrestling with these sorts of issues at gatherings like The Hague Space Diplomacy Symposium this week at the University of Leiden in the Netherlands, which focused on cooperation amid rising geopolitical tensions and competition.

The U.S. government has deliberately left some holes. In 2004, Congress imposed a moratorium on safety regulations for commercial space launches, essentially a free pass, or “learning period,” that is set to expire in October. It has lasted so long because there hasn’t been enough development to base new rules on. In April, a report from the RAND Corporation recommended against extending again, and the Federal Aviation Administration is planning more oversight.

Business leaders caution against creating so much regulation that it pushes innovation offshore while recognizing that we need rules. And futurists naturally have a long and expansive view. Many are concerned that we’ll exploit resources in space before we’re able to “access the infinity of the universe,” as Hanlon put it.

“We just need to hold it together for 200 years,” she said. — Ephrat Livni

WSJ : Mark Zuckerberg Was Early in AI. Now Meta Is Trying to Catch Up.

Mark Zuckerberg Was Early in AI. Now Meta Is Trying to Catch Up.
The CEO considers artificial intelligence critical to long-term growth and is taking more control over efforts. Many Meta AI researchers have departed in the last year.

Meta META -0.29%decrease; red down pointing triangle is doing something Mark Zuckerberg doesn’t like: playing catch up.

A decade ago, the company founder and CEO saw the promise for artificial intelligence and invested large sums of money into its advancement.
He hired one of its early visionaries, Yann LeCun, to lead the charge. Now, just months after OpenAI’s ChatGPT burst into the consumer marketplace, Meta is falling behind in the very same technology.

Meta is now scrambling to refocus its resources to generate usable AI products and features, including its own chatbots, after spending years prioritizing academic discoveries and sharing them freely while struggling to capitalize on their commercial potential.

That’s a tall order as many of Meta’s top AI employees have departed and amid the company’s own sets of layoffs in what Zuckerberg has called a “year of efficiency.” About a third of Meta workers who co-authored published AI research related to large language models—the complex systems that power AI systems like ChatGPT—have left in the last year, according to a Wall Street Journal analysis.

Zuckerberg himself and other top executives have taken more control of the company’s AI strategy. They created a new generative AI group that reports directly to Chief Product Officer Chris Cox, one of the longest-serving and most trusted executives at Meta. The group is training generative AI models—which produce content, such as text, images or audio—intended to be infused into “every single one of our products,” Zuckerberg said.
He has touted Meta’s flagship AI language model, called LLaMA, which — after its code leaked — spurred the emergence of homegrown tools that could one day compete with the products that Google and OpenAI are trying to sell.

If Meta succeeds in commercializing its AI efforts, it could help boost its user engagement, create a better metaverse and make the company more attractive to the young users who are now proving harder for it to attract. If Meta can’t capitalize on this technology fast enough, it runs the risk of losing relevance as competitors, including a fast-growing crop of scrappy AI startups, leap ahead.

In a statement Joelle Pineau, VP of AI Research at Meta said the company is not behind in AI and defended its focus on research and structure, saying it will position Meta for success. Meta’s AI research unit “is one of the world’s leading destinations for AI researchers and open science, and its research output has increased significantly over the last year alone,” said Pineau.
“Our research breakthroughs have provided a tremendous foundation to build on as we bring a new class of generative AI-powered experiences to our family of apps.
We’re proud of the contributions that Meta’s AI researchers, past and present, are making to help shape the future of advanced state-of-the-art AI.”

Zuckerberg on Friday announced an AI model called Voicebox that can read aloud text prompts in a manner of different ways or correct audio recordings with the help of text prompts to remove background noise, like the bark of a dog. Meta didn’t say when the research project will become available to the public.

This article is based on interviews with more than a dozen current and former Meta employees, reviews of LinkedIn and social-media profiles and startup news announcements.

Zuckerberg and other executives have called AI a third leg to Meta’s stool, believing it essential to the company’s long-term growth and relevance, alongside global connectivity and virtual and augmented reality. Lagging behind in AI threatens to make Meta appear stodgy and slow, instead of the nimble, aggressive upstart that coined the phrase “move fast and break things” and set the pace of innovation in Silicon Valley.

In May, the White House didn’t invite Meta to a summit of AI leaders, billed as a meeting of “companies at the forefront of AI innovation.”

Meta has taken sharp turns before at moments when it has appeared behind, such as when it transitioned Facebook from a desktop to a mobile-first ads business or in 2016, when it launched its Stories feature on Instagram to lure people away from Snapchat, which had introduced a similar feature a decade ago.

Meta faces other strategic, political and financial challenges.
Its longtime heavy focus on original research in Meta’s AI division disincentivized work on generative AI, the systems like ChatGPT that produce humanlike text and media. Executives misstepped in designing the hardware required to run such AI programs, which it is now trying to correct. Years of scrutiny into the company’s handling of user data and human-rights violations has made some executives indecisive and wary of launching new AI products for consumers.

Meta began investing in AI in 2013. Zuckerberg and then-CTO Mike Schroepfer personally sought to recruit one of the leading minds in AI to lead a new research division to advance the technology. They found their lieutenant in LeCun, a New York University professor whose breakthrough work in the field was renowned.

LeCun, deeply rooted in academia and fundamental research, was instrumental in creating a culture that reflected his priorities: hiring scientists over engineers and emphasizing academic outputs, such as research papers, over product development for the company’s end users. The strategy made Meta’s fundamental AI research lab highly attractive to top talent over the years, but challenged the company’s ability to commercialize its advancements, people familiar with the matter said.

It also encouraged a diffuse, bottoms-up approach to research direction and resource allocation. Researchers drove their own agendas, pursuing independent projects in different directions rather than toward a cohesive companywide strategy, the people said. Meta divvied up hardware into small pools across each project: Some researchers, given more computer chips than they needed, would tie them up in unnecessary tasks to avoid relinquishing them, some of the people said.

Meanwhile, Meta was slow to equip its data centers with the most powerful computer chips needed for AI development. Even as the company acquired more of these chips, it didn’t have a good system for getting them into the hands of engineers and researchers. At times thousands of pieces of coveted and expensive hardware sat around unused, some of the people said.

Meta is in the process of overhauling its data centers, which could have contributed to the logjams. As of May, Meta’s latest supercomputer for AI projects has 16,000 such chips, a company blog post said.

As large language models began to show increasingly impressive capabilities in 2020, tension mounted within Meta’s AI research division between those who urged the company to invest seriously in the industry’s new direction, and those, including LeCun, who believed such models are fads that lack scientific value, people familiar with the matter said. LeCun’s strong opposition toward large language models (he believes they don’t get AI closer to human-level intelligence), both internally and publicly, made it difficult for researchers with opposing views to amass the support and vast resources needed for those kinds of projects, some of the people said.

Some Meta researchers pressed forward anyway with fewer resources, using around 1,000 chips to produce a large language model in 2022 known as OPT, or Open Pretrained Transformer, and around 2,000 chips to produce Meta’s flagship model called LLaMA in 2023. The industry standard, by contrast, is 5,000 to 10,000 chips. Meta initially allowed a limited group of outside researchers access to LLaMA before it leaked online, sparking a burst of innovation that executives cite as a prime example of Meta’s goal to share its AI technology.

Meta has since lost numerous AI researchers who worked on these and other key generative AI projects in the last year, many citing burnout or a lack of confidence in Meta to keep up with competitors. Six of the 14 authors listed on the research paper for LLaMA, have left or announced they will be departing, according to their LinkedIn profiles and people familiar with the matter. Eight of the 19 co-authors on the paper for OPT have left as well.

The departures have accelerated following OpenAI’s release of ChatGPT in November of last year. Some have been lured by AI startup fever, which has fueled staffing changes at Silicon Valley companies across the board, including at Google. As of March, the number of job listings on LinkedIn mentioning GPT is up 79% year-over-year, the professional social network told The Wall Street Journal.

A Meta spokesman said the company has continued to recruit and brought in new AI talent.

After ChatGPT’s debut, Zuckerberg and Cox joined Chief Technology Officer Andrew Bosworth in overseeing all of the company’s AI-related efforts. The three executives are now spending hours a week on AI, participating in meetings and approving AI projects.

The new generative AI group is focused exclusively on building usable products and tools instead of on scientific research. It received over 2,000 internal applications and has rapidly amassed hundreds of people from different teams. Hardware resources have shifted over from the AI research division and are being used to train new generative AI models, people familiar with the work said.

In March, Zuckerberg said that “advancing AI and building it into every one of our products” was the company’s single largest investment.
Speaking at Meta’s annual shareholder meeting in May, Zuckerberg said the company also hopes to extend the technology to the metaverse as well.

At a town hall meeting with employees earlier this month, Zuckerberg announced a number of generative AI products that the company is currently working on, the Meta spokesman said.
The initiatives include AI agents for Messenger and WhatsApp, AI stickers that users can generate from text prompts and share in their chats and a photo generation feature that will allow Instagram users to modify their own photos using text prompts and then share them in Instagram Stories.

Zuckerberg also shared some internal-only generative AI tools geared toward employees, including one called Metamate, a productivity assistant that pulls information from internal sources to perform tasks at employees’ request. Metamate was recently rolled out to a large group of employees as part of a trial run, the Meta spokesman said.

“In the last year, we’ve seen some really incredible breakthroughs—qualitative breakthroughs—on generative AI,” Zuckerberg said at the town hall.

Meta still faces broad challenges. The company’s increasingly low tolerance for risk following seven years of intense government and media scrutiny for its user-privacy practices has created friction about how and when to introduce AI products, people familiar with the matter said.

In the past, Meta has had to consider its public reputation when developing and releasing large language models, which can be prone to churning out incorrect answers or offensive remarks.

Several years ago, AI researchers were working on a chatbot code-named Tamagobot, based on an early version of a large-language-model system, according to people familiar with the matter. The team was impressed by its performance, but concluded that it wasn’t worth launching while the company was facing intense criticism for allowing misinformation to flourish on its platform during the 2016 presidential election, one of the people said.

The concern around public scrutiny was also on display when Meta released its BlenderBot 3 chatbot in August 2022. Within a week of launching, BlenderBot 3 was panned for making false statements, offensive remarks and racist comments. The system also called Zuckerberg “creepy and manipulative.”

The Meta spokesman said the project was still left up for over a year until the conclusion of the research, and the company maintained an open and transparent approach through its life cycle. Meta has released and seen through many other projects that demonstrate the company’s willingness to take risks, he added.

But the scenario played out again in November 2022 when the company released Galactica, a science-focused large language model. The system was shut down by Meta within three days of its release after it was hit with a wave of criticism by scientists due to its incorrect and biased answers.

Two weeks later, OpenAI released ChatGPT.

CrunchBAse : The Week’s 10 Biggest Funding Rounds: Madhive Tops In Very Slow Wee

The Week’s 10 Biggest Funding Rounds: Madhive Tops In Very Slow Week

This week in venture can be described in two simple words — slow and quiet. Only one company saw a nine-figure round — and that oddly was an advertising startup. Aside from that, rounds were on the smaller side, with it taking only $25 million to make this list. The “June Gloom” seemed to hit VC this week.

1. Madhive, $300M, adtech: Advertising software companies rarely make it this high on the list, but that fact didn’t stop Madhive. The New York-based firm raised $300 million from Goldman Sachs Asset Management, which valued the company at $1 billion, per Axios. The deal gives Goldman a minority stake in the company. Launched in 2015 at Otter TV, Madhive sells its CTV (connected TV) advertising software platform to local TV companies that sell CTV ads.
The company already has $100 million, per the Axios report.

2. Tomorrow.io, $87M, environmental consulting: Climate changes and weather-related issues continue to dominate the news. Tomorrow.io is hoping to let people know of those problems earlier, and locked up an $87 million Series E led by Activate Capital to that end. The company has built a weather intelligence and climate adaptation platform — which includes a weather and climate generative AI tool nicknamed “Gale” — and just launched its R2 weather satellite. The Boston-based startup is hoping to help businesses and governments solve their weather- and climate-related challenges.
Founded in 2016, the company has raised $271 million, per Crunchbase.

3. FZ Sports, $74M, sports: Miami-based FZ Sports locked up a $74 million round from a handful of investors this week, including 777 Partners and MEP Capital.
The round is a mix of debt and equity capital; however, the exact makeup was not disclosed.
The sports media and technology startup — which operates 1190 Sports, Fanatiz and Nunchee – manages the international broadcasting rights for leagues in Latin America, including the Brasileirão, Liga Argentina de Futbol and recently added Liga1 Peru. Soccer is the world’s most popular game, and there is no doubt a rabid following for many of the top leagues in Latin America.

4. Primer Technologies, $69M, defense: Late last year we all saw the potential interest in defense tech as Costa Mesa, California-based Anduril locked up a Series E worth nearly $1.5 billion that values the company at $8.5 billion. This week, Primer locked up a round that is smaller but still significant. The San Francisco-based company specializing in AI-powered data analysis announced a $69 million “first close” of its Series D. The new cash will be used to accelerate the development of AI solutions for the government and commercial customers. Primer’s government offerings focus on software for intelligence gathering and analysis through natural language processing. The funding was led by Addition — which also was in the news this week.
Founded in 2015, Primer has raised $237 million, per Crunchbase.

5. Octave, $52M, health care: San Francisco-based behavioral health care startup Octave closed a $52 million Series C round led by Cigna Ventures, Novo Holdings and Avidity Partners as it looks to expand its in-network therapy services nationally. The company has both in-person and virtual clinics, and offers personalized care plans for individuals, couples and families that often is covered through insurance.
Founded in 2018, the company has raised $86 million, per Crunchbase.

6. CubicPV, $33M, solar: Bedford, Massachusetts-based solar manufacturing startup CubicPV announced it has received $33 million in the first tranche of a $100 million investment led by SCG Cleanergy. Founded in 2021, the company has raised $58 million.

7. CloudZero, $32M, cloud: Boston-based cloud cost intelligence platform CloudZero closed a $32 million Series B led by Innovius Capital and Threshold Ventures.
Founded in 2016, the company has now raised $48 million, per Crunchbase.

8. Theradaptive, $26M, biotech: Frederick, Maryland-based Theradaptive, a biopharmaceutical company focusing on targeted regenerative therapeutics, closed a $26 million Series A. The company did not release investors. Founded in 2016, this is the company’s first disclosed outside raise, per Crunchbase.

9. (tied) FIA Tech, $25M, financial services: New York-based FIA Tech, a provider of financial and legal agreements and brokerage services, closed a $25.4 million round led by six existing shareholders: Bank of America, Barclays, Citi, Goldman Sachs, JP Morgan and Wells Fargo. Founded in 2008, FIA Tech has raised almost $70 million, per the company.

9. (tied) Paro, $25M, fintech: Chicago-based Paro, which provides on-demand bookkeeping, raised a $25 million Series C led by Top Tier Capital Partners.
Founded in 2025, Paro has raised $67 million to date, per the company.

Big global deals
The biggest round of the week was Madhive’s, but another pretty large round occurred in Europe.

  • London-based Beacon Therapeutics, which is looking to treat blinding retinal illnesses and restore and enhance eyesight, raised a $123 million Series A.

FT : Italy set to limit shareholder rights of Chinese owner in Pirelli

Italy set to limit shareholder rights of Chinese owner in Pirelli
Data-collecting tech in tyres deemed of national security importance as governance dispute with Sinochem hots up

Italy has approved measures to limit the shareholder rights of the Chinese chemical group Sinochem in Pirelli, the Milan-listed tyremaker and set out a wider range of sectors that the government judges to be of national security importance.

The decision is a rare intervention in an eight-year-old Chinese investment that had, so far, not been considered a strategic national asset. In 2015, a previous Chinese state-owned chemicals group had bought a majority stake in Pirelli, considered a crown jewel of Italian industry, for $7.7bn.

Prime minister Giorgia Meloni’s office said in a statement on Friday that the latest measures, passed under the country’s “golden power” foreign investment screening mechanism, were “aimed at creating a network of measures to safeguard Pirelli’s independence and its management”.

The FT revealed this month that Pirelli chief executive Marco Tronchetti Provera had lobbied Rome to intervene in the company’s shareholding arrangements, warning of the greater control that the Chinese government was taking in Pirelli’s business and governance decisions.

Tronchetti Provera, who has a minority stake in Pirelli, has been fighting with his Chinese partners over day-to-day management for the past few years. He has unsuccessfully tried to persuade them to sell part of their stake. Frictions within the company have also emerged over his pay, which in 2022 was €20.5mn.

Rome’s restrictions, which involve limits to accessing and sharing information between Pirelli and Sinochem and a four-fifths majority for some “strategic” board decisions, were aimed at protecting “strategically relevant information and the company’s knowhow”, Meloni’s office said.

The decision comes as the Italian government attempts the difficult balance of aligning itself more closely with the EU and US on foreign policy and re-evaluating its relationship with China, while at the same time not antagonising Beijing.

Meloni’s government is also considering an exit from Beijing’s flagship overseas investment project, the Belt and Road Initiative. Italy was the only European nation to join the BRI in 2019.

Last month, leaders from the US, EU and Japan united behind the idea of “de-risking” from China, speaking of a need to protect “certain advanced technologies that could be used to threaten our national security”.

The scope of what counts as assets of national security importance has been expanded in Italy and the EU since 2019, leading to an increase in applications filed under Italy’s screening mechanism, from 8 in 2014 to 496 in 2021.

Meloni’s office said a specific technology that allowed for the geolocation and collection of drivers’ information through a microchip installed on the tyres was critical and of national strategic importance.

“The misuse of such technology can cause a variety of risks for customers and national security,” the office said.

FT : Climate graphic of the week: first days of June bring record heat

Climate graphic of the week: first days of June bring record heat
Oceans remain at record levels for the second month


Global surface air temperatures crossed the key 1.5C warming threshold temporarily at the start of June, as the world’s oceans hit record-high temperatures for two months running. 

If the trend continues, the level of global warming since the pre-industrial era presents a stark indicator of worsening climate change.

Scientists at the Copernicus Climate Change Service said the first 11 days of June had been the hottest on record for this time of year, and that the 1.5C warming threshold had been temporarily crossed.

The threshold was first exceeded during December 2015, and crossed “repeatedly” in 2016 and 2020. This year is the first time it has been breached in June.

The findings “should be a stern warning sign that we are heading into very warm uncharted territory”, said Melissa Lazenby, a lecturer in climate change at the University of Sussex in the UK.

The Paris Agreement commits countries to limiting long-term warming to 1.5C above pre-industrial levels, ideally.
Long-term warming is already at least at 1.1C. 

Global ocean temperatures, meanwhile, reached their highest levels on record for April and May, according to the US National Oceanic and Atmospheric Administration. Above normal sea-surface temperatures had “recently expanded across the central and eastern equatorial Pacific”, it said


Thomas Smith, a professor in environmental geography at the London School of Economics, noted that the top few metres of the ocean stored enormous amounts of energy, and warned that hotter water temperatures meant a very large amount would be transferred to the atmosphere.

Scientists this month declared the return of El Niño, the weather phenomenon that is associated with warming across the Pacific Ocean. But they said the recent record heat was not necessarily a direct result, since its effects were typically felt after it had been active for some time.

“There tends to be a lag,” said Rocky Bilotta, a climatologist at NOAA.
El Niño was likely to have “more influence on the 2024 season of global temperatures rather than currently in 2023.
But that doesn't necessarily mean that we’re not already seeing an effect,” he said.


The LSE’s Smith said the unusually warm Atlantic and Indian oceans meant that “this El Niño may not be like others” as the warming effect takes hold over the Pacific Ocean.

“The unprecedented situation presents a challenge for those forecasting weather conditions in the months that lie ahead,” he said.

NOAA said there was a more than 90 per cent chance that El Niño would persist into 2024.

That has fuelled concerns about unprecedented heat this year and next.
2022 was the fifth warmest year on record despite the cooling effects of the La Niña weather phenomenon — El Niño’s opposite — that was present for three consecutive years.
“With the emerging El Niño there is a possibility that the average surface global temperature for the whole of this year or next could exceed 1.5C for a single year,” said Albert Klein Tank, director of the UK Met Office Hadley Centre for Climate Science and Services.

Global land and ocean temperatures were the third warmest on record for the March to May period, and there was a 99.5 per cent chance that 2023 would be a “top 10” hottest-ever year, said NOAA. 


About a quarter of the contiguous US is in a state of drought, while ferocious wildfires have ripped across vast tracts of Canada and unusually hot conditions are also being felt in countries including the UK and China.

A warmer atmosphere can hold more moisture, making heavier storms more likely.

But hotter conditions can also pull more moisture out of the ground into the atmosphere, increasing the risk of droughts and wildfires.

Barron's : Buy This Copper Stock. Shares Could Soar 50%.

Buy This Copper Stock. Shares Could Soar 50%.

Copper prices are getting ready to run—and Freeport-McMoRan FCX –0.47% stock is the way to play it.

The industrial metal got off to a slow start in 2023, and so did Freeport (ticker: FCX). With the possibility of a U.S. recession dominating the conversation in the U.S. and China’s reopening running out of steam, copper prices fell 4% through the first five months of the year. That weighed on Freeport, which gets three-quarters of its sales from copper, dragging shares down 9.6% over the same period.

But things are starting to look up for Freeport.
The Phoenix-based company already has the strongest balance sheet of any copper miner, a strong management team, and the ability to return capital to shareholders.
And it will benefit from the
long-term adoption of electric vehicles
and other forms of alternative energy.
Now, copper prices are starting to tick higher amid signs of economic resilience, and if they continue to, so will Freeport stock.
“You could be in the early innings of a long-term copper cycle,” says Vertical Research Partners analyst Mike Dudas, who has a $57 price target on Freeport, up 42% from Wednesday’s $40.06 close. “In that environment, the stock should have some upside.”

Let’s get one thing straight: As copper goes, so goes Freeport stock.
The metal more than doubled from the $2.11-per-pound low in the early days of Covid-19 to its record high of $4.93, hit in March 2022, when sanctions imposed on Russia after its invasion of Ukraine restricted its supply.

Freeport’s stock rose more than 800% during the same period because miners have a lot of fixed costs that remain the same no matter how much copper is sold. Of course, the reverse is also true, so when copper prices fall, as they have since early last year, Freeport stock falls, too.

Copper, though, looks resilient.
That starts with China, the world’s largest copper consumer.
While the country’s reopening has been disappointing thus far—its real gross domestic product is expected to grow 5.6% this year from 3% last year—its policy makers are taking steps to boost demand, with the People’s Bank of China cutting its seven-day reverse repurchase rate, its equivalent of the federal-funds rate, to 1.9%, from 2%, this past Tuesday. If China’s economy responds, copper should get a boost.

There are also signs that U.S. demand could be on the verge of a recovery.
After peaking in March 2021 and declining for the better part of two years, the Institute for Supply Management’s manufacturing purchasing managers’ index is finally starting to improve, though it remains below 50, the level that indicates a contraction. Seaport Global Securities macro strategist Victor Cossel notes that the manufacturing PMI PM +0.17% ’s order-to-inventories ratio has started to improve, as well, a sign that the overall index should continue to rise. Historically, improvements in that metric coincide with a bottoming in copper prices.

Copper prices are behaving as if that is the case. They have found support near $3.60 a metric ton several times in the past year and have rallied to $3.83. That’s still 22% below their record high. If the U.S. and China economies continue to improve, copper should make a run at that level—and carry Freeport with it.

“We continue to expect cyclical copper demand recoveries aided by early [economic] cycle expansion,” writes Dudas.

There are long-term drivers for copper, as well.
Electric vehicles, for instance, require at least three times more copper than internal-combustion vehicles.
As consumers continue to adopt electric vehicles, that factor alone could help push global copper demand to just over 28 million metric tons by 2030, according to the International Energy Agency. Supply could have trouble catching up to that demand, with a potential shortfall of six million metric tons by that year, according to McKinsey.

If everything goes right, copper could hit $5 by next year, says Matthew Tuttle, chief investment officer at Tuttle Capital Management, which owns Freeport stock. If copper only gets back to its 2023 peak, shares would hit $47, Tuttle says.

Freeport’s profits would get a big boost if copper prices continue to rise.
Right now, analysts expect earnings per share to come in at about $1.92 in 2023, from $2.44 last year, even as sales rise to $23.5 billion from $22.8 billion last year.
Don’t expect earnings estimates to go much lower—the consensus has already dropped 39% from its peak in July 2022—but they could go higher. Copper at $5 would bring earnings before interest, tax, depreciation, and amortization, or Ebitda, to over $12 billion, the company said on its latest earnings call, more than 11% above analyst estimates for $10.8 billion in 2024.

“If copper is moving higher, generally that pushes estimates higher,” says RBC Capital Markets analyst Sam Crittenden, who has a $50 price target on the stock, reflecting a 25% upside.

Freeport also has the balance sheet to weather lower copper prices, if it comes to that.
It has $2.7 billion in net debt versus $9.6 billion in Ebitda this year, for a net-debt-to-Ebitda ratio of 0.28, better than rival
Southern Copper SCCO +0.38% ’s (SCCO) 0.78. It also has a variable dividend yield of 1.5%, with the payments rising or falling based on earnings, cash needs, and other factors.

“Investors continue to debate the near-term trajectory for copper prices, but those more positively inclined and looking for medium-/longer-term copper exposure continue to favor Freeport, given the balance sheet strength, consistent operational execution track record, and favorable capital returns policy,” writes Goldman Sachs analyst Emily Chieng.

Buy Freeport for higher copper prices today—and tomorrow.

Barron's : How a Trade Deal With Europe Could Help Save Brazil’s Amazon Rainfore

How a Trade Deal With Europe Could Help Save Brazil’s Amazon Rainforest

There’s one good reason the rest of the world should care about Brazil, aside from it being the giant of Latin America with 215 million citizens. That would be the Amazon rainforest, whose role as a carbon sink makes a critical check on global warming.

Brazilian President Luiz Inácio Lula da Silva cut Amazon deforestation by 80% during previous terms, 2004-12.
Jair Bolsonaro reversed this progress with a vengeance from 2018-22.
Four-fifths of the (mostly illegally) cleared land is used for cattle ranching, says Erika Berenguer, a Brazilian researcher at Oxford’s Ecosystems Lab.
The returning Lula, as the 77-year-old leader is known, lately unveiled a new plan for stopping Amazon deforestation by 2030. That could pay off by unsticking a stalled trade agreement between the European Union and Mercosur, a five-nation South American bloc dominated by Brazil. Resistance within Brazil looks much stronger than in the 2000s, though.

Environmentalists give high marks to Lula’s blueprint, which leans heavily on improved satellite monitoring and updated digital land registries. “The plan is very robust, with instruments that didn’t exist in 2004” says Carlos Rittl, former head of Brazil’s Climate Observatory.

Lula also faces opposition that did not exist then. The nine states of the Amazon region voted solidly for Bolsonaro, whom Lula beat by less than two percentage points last October. Their 28 million residents favor development and jobs over conservation, says Creomar de Souza, founder of Dharma Political Risk and Strategy in Brasília. “The right has successfully painted environmentalism as the enemy of the people,” he says.

A bigger threat may come from the national Congress, where Lula’s leftist PT party is heavily outnumbered. “This is the most conservative Congress we have ever had,” Berenguer says.

Deputies passed two laws on the eve of Lula’s Amazon announcement, removing the environment ministry’s oversight of land registration, and raising the bar for carving out protected indigenous territories.

Lula has weapons to fight back, aside from a formidable federal police force. The most potent is a rich subsidized credit stream flowing to farmers through state banks. His earlier administrations cut off this largess from areas with uncontrolled deforestation. This one could too. “The federal government has lots of instruments to convince states to be more positive on the Amazon package,” de Souza comments.

Lula could still use backup from abroad. European Commission President Ursula von der Leyen offered just that on a visit to Brazil this week. With Brasilia’s Amazon policy back on track, the EU-Mercosur deal could be wrapped up this year, she predicted.

That would boost Lula’s political capital, not least among the agricultural interests who oppose him in the Amazon but would benefit most from much lower EU tariffs.

Von der Leyen’s word is hardly law, however, for the 27 EU member states who have to ratify any trade pact. France and Austria are leading the foot-draggers on a Mercosur accord, ostensibly on environmental grounds. Their domestic beef industries may not be coincidental, says Eoin Drea, senior researcher at the Wilfried Martens Centre for European Studies. “There’s a lot of rhetoric on the Amazon, but also big doses of protectionism,” he says.

Lula flies to Paris on June 22, with a good shot at nudging French President Emmanuel Macron toward Yes on EU-Mercosur, Drea thinks. Politics on both sides of the Atlantic still leave the campaign to save the Amazon all too fragile, like the great forest itself.