Wednesday, 3 September 2025

Nuclear War Or Peace? That Rising SCO World. Will AI Ruin Our World?

 Baltic Dry Index. 1986 -38             Brent Crude 68.93

Spot Gold 3538                    US 2 Year Yield 3.66 +0.07

US Federal Debt. 37.312 trillion

US GDP 30.241 trillion.

September 3, 1939 - Britain, France, Australia and New Zealand declare war on Germany.

Little need for my input this morning.

Stocks largely down, AI bubble ending? Gold higher on US interest rate cut front running and rising international alarm on the rising US debt relative to the US GDP.

The Washington-London War Party facing a new reality after their failure in Ukraine.

Asia markets trade mixed as tariff concerns weigh

Published Tue, Sep 2 2025 7:40 PM EDT

Asia-Pacific markets traded mixed Wednesday as investors assessed rising global bond yields and the latest developments on the trade front.

Chinese markets were in focus following President Xi Jinping’s speech at a military parade to commemorate the 80th anniversary of the end of World War II. The event was graced by 26 world leaders, including Russian President Vladimir Putin and North Korea’s leader Kim Jong Un.

Hong Kong’s Hang Seng index increased by 0.86%, while mainland China’s CSI 300 ticked up 0.24% in early trade.

Over in Australia, the S&P/ASX 200 benchmark declined by 1.09%. The country’s second-quarter GDP grew 1.8% year over year, marking the fastest pace of growth since September 2023. The latest reading beat the 1.6% growth expected by economists polled by Reuters, and was higher than the 1.3% seen in the previous quarter.

Japan’s Nikkei 225 lost 0.41%, while the broader Topix index dropped by 0.53%.

Yields on Japanese Government Bonds (JGBs) rose, with the yield on 10-year JGBs up 2.6 basis points to 1.629% as of 10:45 a.m. local time (9:45 p.m. ET Tuesday).

Meanwhile, the yield on 30-year JGBs increased by nearly 7 basis point to 3.279%, surpassing its previous high in August, while yields on 20-year JGBs rose around 5.3 basis points to 2.684%, after hitting its highest level in 26 years earlier in the session.

Over in South Korea, the Kospi index ticked up 0.3% choppy trade, while the small-cap Kosdaq rose 0.19%.

U.S. equity futures mostly rose in early Asia hours, after a federal court ruling on an antitrust case on Google-parent Alphabet fueled optimism that tech majors will be able to navigate regulatory threats.

Overnight stateside, all three key benchmarks ended the day lower.

The Dow Jones Industrial Average ended down 249.07 points, or 0.55% to close at 45,295.81. The broad-based S&P 500 dropped 0.69% to settle at 6,415.54, while the Nasdaq Composite slid 0.82% to close at 21,279.63.

Asia markets trade mixed as tariff concerns weigh

China’s Xi says the world faces ‘peace or war’ as Trump claims Beijing conspiring against U.S.

Published Tue, Sep 2 2025 9:54 PM EDT

BEIJING — Chinese President Xi Jinping said Wednesday that the world was facing a choice of “peace or war” and “dialogues or confrontation” as the country hosts its largest military parade commemorating the 80th anniversary of the end of World War II.

The speech came as U.S. President Donald Trump in a post on Truth Social urged the Chinese leader to recognize U.S. contributions to helping secure China’s freedom, while alleging that Beijing was conspiring against Washington.

“Please give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States of America,” Trump said.

Russian President Vladimir Putin and North Korea’s Kim Jong Un are among the leaders from more than 20 countries attending the “Victory Day” military parade in Beijing at Tiananmen Square. China is hosting a reception following the parade, and an evening gala.

It is unlikely that the gathering of Putin and Kim in Beijing would derail the ongoing U.S.-China trade talks as both sides appeared to favor moving toward a deal in the coming months, said Neil Thomas, fellow for China politics at Asia Society.

That said, “the fact that China has this increased gravitational pull in regional diplomacy is telling about the progress that it [has] been able to make, especially when there’s increased uncertainty about whether Washington wants to do trade and investment deals with countries in Asia,” he added.

More

Xi says world faces 'peace or war' as Trump claims Beijing conspiring against U.S.

China hails ‘strategic ace’ deterrence as nuclear missiles, weapons roll through Beijing

Overseeing his third major military parade, Xi Jinping speaks to the nation and assembled world leaders before inspecting the troops

Published: 8:37am, 3 Sep 2025 Updated: 12:09pm, 3 Sep 2025

China has hosted a massive military parade along Changan Avenue in central Beijing, showcasing the country’s latest and most advanced weapons to commemorate the 80th anniversary of China’s victory over Japan in World War II.

President Xi Jinping delivered a speech from the Tiananmen rostrum and then inspected the People’s Liberation Army (PLA) troops from a parade car. It was the third major military parade in Tiananmen Square that Xi is overseeing as president.

World leaders, including Russian President Vladimir Putin, North Korean leader Kim Jong-un, Belarusian President Alexander Lukashenko and Malaysian Prime Minister Anwar Ibrahim were seated on the rostrum, along with serving and former top officials and generals.

Nuclear ‘strategic ace’ missiles

The PLA’s first air-launched nuclear missile, the JL-1, has been unveiled atop a military truck. This model is significantly smaller than the JL-3 submarine-launched intercontinental ballistic missile, which is on show.

CCTV says that these two missiles, along with the DF-61 and DF-31, represent the “first concentrated display” of the PLA’s “land, sea and air triad strategic nuclear forces”, constituting a “strategic ace for safeguarding national sovereignty and defending national dignity”.

Deterrence ‘credible, reliable, sufficient’

Military blogger Ma Yan says the upgraded intercontinental ballistic missile DF-5C sends the message that “China’s strategic deterrence is credible, reliable and sufficient”.

The DF-5C can reportedly carry up to 10 multiple independently targetable re-entry vehicle warheads, “meaning that a single missile can target 10 different locations at the same time”, she says on Chinese social media.

The missile can target “the enemy’s military bases and critical facilities”, and adjust the order of strikes.

“The DF-5C, although launched from fixed silos, has a longer range and a single warhead yield reaching millions of tonnes, primarily designed to target underground facilities and missile silos,” Ma says.

“Its existence strengthens our nuclear deterrent strategy, ensuring effective retaliatory strikes, even under the harshest war conditions.”

CCTV narration said the strike range of this model “covers the entire globe”.

Carrier-based aircraft

Four types of carrier-based aircraft have been on show, including the J-35 and J-15T.

According to state news agency Xinhua, the J-15T can take off using either a catapult or ski-jump launch system. The J-15DT is an electronic warfare carrier-based aircraft that can also launch using either system.

The J-35, the latest stealth carrier-based fighter, “is a landmark piece of equipment for the navy’s transition from near-sea defence to far-sea defence”, Xinhua says.

The J-15DH, J-15DT and J-35 were all independently developed by China, Xinhua says.

CCTV’s live broadcast indicates that China’s carrier-based aircraft have achieved “multi-aircraft coordination”.

The carrier-based aircraft formation is operated by China’s first carrier-based aviation brigade, Xinhua says.

----Interest in China’s deep-sea drones

Chinese military commentator Bai Mengchen says China’s latest extra-large uncrewed underwater vehicles (XLUUVs) are ideal for the country to counter threats in the deep sea, given the lessons of the Nord Stream pipeline sabotage.

“There was considerable interest in the several XLUUVs showcased, as their size suggests their strong capabilities to operate in deep sea,” Bai said during Phoenix TV’s live coverage of the parade.

“The deep sea is a cutting-edge area of multi-domain operations, attracting considerable attention. Previous experiences like the Nord Stream sabotage reminds us to be vigilant in this domain.”

More

China hails ‘strategic ace’ deterrence as nuclear missiles, weapons roll through Beijing | South China Morning Post

Trump says US strike on vessel in Caribbean targeted Venezuela’s Tren de Aragua gang, killed 11

Updated 1:56 AM GMT+1, September 3, 2025

WASHINGTON (AP) — President Donald Trump said Tuesday the U.S. has carried out a strike in the southern Caribbean against a drug-carrying vessel that departed from Venezuela and was operated by the Tren de Aragua gang.

The president said in a social media posting that 11 people were killed in the rare U.S. military operation in the Americas, a dramatic escalation in the Republican administration’s effort to stem the flow of narcotics from Latin America. Trump also posted a short video clip of a small vessel appearing to explode in flames.

“The strike occurred while the terrorists were at sea in International waters transporting illegal narcotics, heading to the United States,” Trump said on Truth Social. “No U.S. Forces were harmed in this strike. Please let this serve as notice to anybody even thinking about bringing drugs into the United States of America.”

The video appears to show a long, multi-engine speedboat traveling at sea when a bright flash of light bursts over the craft. The boat is then briefly seen covered in flames.

The video, which is largely in black and white, is not clear enough to see if the craft is carrying as many as 11 people. The video also did not show any large or clear stashes of drugs inside the boat.

Tren de Aragua originated more than a decade ago at an infamously lawless prison with hardened criminals in Venezuela’s central state of Aragua. The gang has expanded in recent years as more than 7.7 million Venezuelans fled economic turmoil and migrated to other Latin American countries or the U.S.

Trump and administration officials have repeatedly blamed the gang for being at the root of the violence and illicit drug dealing that plague some cities. And the president on Tuesday repeated his claim — contradicted by a declassified U.S. intelligence assessment — that Tren de Aragua is operating under Venezuelan President Nicolás Maduro’s control.

The White House did not immediately explain how the military determined that those aboard the vessel were Tren de Aragua members. The size of the gang is unclear, as is the extent to which its actions are coordinated across state lines and national borders.

What Maduro had to say

After Trump announced the strike, Venezuelan state television showed Maduro and first lady Cilia Flores walking the streets of his childhood neighborhood. A television presenter said Maduro was “bathing in patriotic love” as he interacted with supporters.

“In the face of imperialist threats, God (is) with us,” Maduro told supporters.

Maduro did not address the strike directly, but charged that the U.S. is “coming for Venezuela’s riches,” including oil and gas. The South American country has the world’s largest proven oil reserves.

“From the neighborhoods of Caracas ... I tell you, there will be peace in Venezuela, with sovereignty,” he said.

Communications Minister Freddy Ñáñez questioned the veracity of the video. “Based on the video provided, it is very likely that it was created using Artificial Intelligence,” he said on his Telegram account. He couldn’t say what tools would have been used to create the video, but said it showed an “almost cartoonish animation, rather than a realistic depiction of an explosion.”

More

Trump says US struck Venezuelan gang's vessel, killing 11 | AP News

Up next, a rest of the world (ROW) fast getting less USA centric, with or without President Trump’s chaotic tariffs.

Forging growth together: China-SCO economic and trade partnership gains momentum

By Li Yingqi, Huan Xiang (People's Daily) 21:39, September 01, 2025

According to statistics recently released by China's General Administration of Customs, in the first seven months of this year, China's total imports and exports with other Shanghai Cooperation Organization (SCO) members reached 2.11 trillion yuan ($295.04 billion), marking a 3 percent increase year on year, a record high for the period.

As cooperation deepens across trade, investment, connectivity, and other fields, the SCO is charting a path of mutual benefit and shared prosperity, injecting strong momentum into regional development.

On the shores of Jiaozhou Bay in Qingdao, east China's Shandong province, the China-SCO Local Economic and Trade Cooperation Demonstration Area (SCODA) bustles with activity. Recent examples include a truck laden with fresh fruits and vegetables departing Qingdao's international road transport assembly center for Moscow (reaching its destination in under a week), and 388 new energy vehicles clearing customs at the SCO International Hub Port Automobile Trading Center before shipment to Dubai.

Such scenes vividly illustrate the SCODA's role as a dynamic hub where people, goods, and commerce converge.

The demonstration area traces its origins to Chinese President Xi Jinping's address at the 2018 SCO Qingdao Summit, where he announced that the Chinese government supports building a demonstration area in Qingdao for China-SCO local economic and trade cooperation. Since its inception, the area has been exploring innovative models of local cooperation.

For Li Zhenye, deputy general manager of Qingdao Hongzhu Agricultural Machinery Co., Ltd., the platform has delivered tangible results. "We have participated in the SCO International Investment and Trade Expo for four consecutive years. It has helped us build lasting connections with customers from many SCO countries. In 2024, we hosted nearly 50 business delegations from SCO members, and exports to other SCO and Belt and Road partner countries now account for more than 80 percent of our total," Li said.

According to Irfan Shahzad Takalvi, founder of the Eurasian Century Institute, a think tank in Islamabad, Pakistan, China has launched a series of cooperation platforms in recent years, facilitating the movement of goods, technology, and talent. These platforms have enabled SCO countries to share development experience, adopt mature technologies, and train professionals, promoting economic growth across the region," he noted.

A recent demonstration of enhanced connectivity occurred on May 20, when a China-Central Asia freight train departed Tianjin Port for Xinjiang's Horgo crossing. Carrying 50 containers from South Korea, it completed the journey in two weeks, reducing transit distance by 800 kilometers compared to the traditional route.

Today, Tianjin Port connects with over 500 ports in more than 180 countries and regions and has also expanded rail cooperation with SCO member states such as Russia, Kazakhstan, Uzbekistan, and Belarus, making it a vital bridge between the SCO and global markets.

By opening more efficient regional logistics corridors, strengthening resilient industrial and supply chains, and enhancing trade and investment cooperation, China and other SCO countries are steadily reaching new heights of practical economic engagement. In 2024, trade between China and SCO member states, observer states, and dialogue partners reached a record high of $890 billion, underscoring the dynamism and promising outlook of regional commerce.

The vibrancy of SCO economic and trade cooperation is equally evident at the Horgos International Border Cooperation Center on the China-Kazakhstan border. From Kazakh camel milk and Kyrgyz honey to Uzbek cherries and Tajik dried fruit, thousands of products from more than 40 countries fill the stalls of over 5,000 shops and 1,200 merchants. As the largest cross-border tourism and shopping zone in northwest China, it offers a vivid window into the flourishing economic cooperation between China and its SCO partners.

In the first seven months of this year, Horgos customs supervised 35,500 tons of goods with a total value of 3.65 billion yuan, representing year-on-year increases of 50.1 percent and 37.7 percent year on year, respectively. The center also handled 5.69 million cross-border travelers, a 66 percent increase over the same period last year.

Behind this vitality are streamlined and efficient customs services. At the road port of Horgos, 24-hour customs clearance ensures the daily departure of over 1,000 trucks bound for Central Asia and Europe. Simplified procedures have reduced clearance steps by 60 percent, boosted vehicle throughput by 80 percent, and cut overall business costs by 50 percent. The city of Horgos is accelerating the development of a national land port logistics hub, continuously improving port functionality and clearance efficiency.

"The one-stop inspection model and round-the-clock appointment-based clearance have further enhanced cross-border trade efficiency, creating a fast track for deeper economic cooperation between China and other SCO countries," said Guo Ying, head of customs at the Horgos International Border Cooperation Center.

Forging growth together: China-SCO economic and trade partnership gains momentum - People's Daily Online

In other news, there will now be photographic trouble ahead.

Masterful photo edits now just take a few words. Are we ready for this?

For better or worse, Google’s Gemini chatbot just got an image manipulating upgrade.

September 1, 2025

Using artificial intelligence to create images out of whole cloth is nothing new. Using AI to strategically or even surgically manipulate genuine photos has always been trickier — until Google DeepMind leapfrogged the pack with a new tool.

Just ask, and its new Gemini Flash 2.5 Image model, available to play with inside Google’s Gemini chatbot can plop pets into new localesconvincingly colorize monochrome photos and even mark up points of interest in a cityscape.

We all have our share of photos that didn’t turn out quite right. Now editing them artfully no longer requires expertise — just a Google account and the willingness to play supervisor to an AI photo assistant. But how well do Gemini’s new image manipulation skills actually work? We put them to the test.

What it can do

Google’s new AI model — formerly known as “Nano Banana” — is especially interesting for a few reasons.

First, it’s fast. The updated Gemini often churns out edited images in under 30 seconds, while OpenAI’s ChatGPT 5 sometimes took more than three times as long to handle the same requests. (The Washington Post has a content partnership with OpenAI.)

It’s also really good at maintaining a consistent context — ask it to make changes to one part of an image, and it will keep the rest mostly untouched.

Consider this photo my wife took of me in a phone booth in Japan.

After receiving my simple prompt (“replace this man’s outfit with a bright orange tuxedo and a big showgirl’s headdress”), Gemini spit out this image where I am the only thing that has noticeably changed.

Look carefully enough and you’ll notice that the numbers on the phone’s keypad — along with some of the Japanese text littered throughout the scene — have been transmuted into AI gibberish. But all of the important scene-setting elements remain, even if you ask the AI to tweak the lighting and replace me with, say, a water buffalo:

Gemini is also notable for the way it treats the people in the images it edits: They're (mostly) recognizable as themselves in the results, even if you try to fine-tune those results with even more requests.

Here’s a photo I took of The Washington Post’s future of work reporter, Danielle Abril, before and after I asked Gemini to “surround the subject with neon lights and change the lighting of her face accordingly.”

----- And sometimes, the tool just doesn’t know how to deal with a request.

In the example below, I asked Gemini to colorize and sharpen this old, blurry photo of my grandfather — one of just a few my mom still has left after all these years.

Gemini’s first draft looked great in color, but according to my mom, it left my grandfather looking a little too young (middle photo). When I asked Gemini to make his face a little older and a touch more wrinkly, it spit out someone, who to me, looks completely different (right image).

Faux photo fallout

Gemini’s new model clearly isn’t perfect, but it’s fast, effective and accessible enough that people are cooking up ambitious ways to use it. Even so, facets of Google DeepMind’s approach to manipulating images have come as a surprise — and not necessarily a good one — to some AI researchers.

When Vincent Conitzer took Gemini’s new image skills for a spin, the first thing he asked it was to add Kim Kardashian to a photo of Travis Kelce and Taylor Swift at a football game.

“My first reaction was, ‘Wow, that was fast and easy,” the Carnegie Mellon University professor of computer science told The Post. But then the surprise kicked in: Unlike other AI tools, Gemini offered “no pushback whatsoever” when asked to add the likeness of a real person to an otherwise genuine image, Contizer said.

More, plus photos.

How Gemini’s impressive ‘Nano Banana’ AI photo editor works - The Washington Post

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

US Manufacturing Shrinks for Sixth Straight Month

September 2, 2025 at 11:25 PM GMT+1

US factory activity shrank in August for a sixth straight month, driven by a pullback in production that shows manufacturing remains bogged down by higher import duties tied to President Donald Trump’s trade war.

At the same time, there were a few positive signs. Orders expanded for the first time since the start of the year, with the ISM gauge of new bookings jumping 4.3 points, the largest increase since the beginning of 2024, to 51.4. A measure of prices paid for raw materials declined to 63.7—still elevated but the lowest since February. 


Still, the mixed report highlights the number of cross-currents facing the nation’s producers. While still experiencing higher costs as a result of levy hikes, manufacturers appear to be benefiting from solid business investment and resilient household demand.

But factories also are wrestling with supply chain disruptions related to Trump’s scattershot tariff orders and retreats—and now a court ruling deeming most of his levies illegal. The ISM supplier delivery gauge showed delivery times lengthened last month. Also, the group’s import index indicated a faster pace of contraction. Investors on Tuesday didn’t like the look of things, and stocks and bonds took a dive. Here’s your markets wrap

US Manufacturing Shrinks for Sixth Straight Month: Evening Briefing Americas - Bloomberg

Euro zone inflation rises to hotter-than-expected 2.1% in August

Published Tue, Sep 2 2025 5:06 AM EDT

Euro zone inflation edged higher to 2.1% in August, according to the latest flash data from statistics agency Eurostat on Tuesday.

Economists polled by Reuters had expected the rate to remain unchanged from July, at 2%.

Core inflation, which strips out more volatile food, energy, alcohol and tobacco prices, was unchanged from 2.3% in July. The closely watched services print meanwhile was slightly lower in August, at 3.1% compared to 3.2% in July.

At 2.1%, the euro zone’s latest inflation rate is just slightly higher than the European Central Bank’s target of 2%.

The euro was down 0.6% against the dollar, at $1.1640. The pan-European Stoxx 600 was trading 0.7% lower Tuesday morning.

The central bank held its key interest rate at 2% in July and is expected to maintain that stance when it next meets in September, according to a majority of economists polled by Reuters.

The EU’s trade deal with the U.S., signed in late July, has removed uncertainty over tariffs although there are some concerns that the blanket 15% duty of EU exports to the States could still weigh on economic activity.

The euro zone eked out 0.1% growth in the second quarter, compared to the previous quarter, Eurostat data showed in late July.

ECB rate pause likely

The slight uptick in headline inflation in August is unlikely to make much difference for policymakers at the ECB when they next meet, Andrew Kenningham, chief Europe economist at Capital Economics, noted Tuesday.

ECB policymakers “look certain to leave interest rates unchanged at next week’s meeting and probably for several months beyond that,” he said in emailed analysis.

“Most importantly for the ECB, services inflation also came down a touch, from 3.2% in July to 3.1% in August. This is the lowest rate of services inflation since March 2022 and should provide some reassurance for policymakers that domestic prices pressures are continuing to subside,” he said, predicting the services inflation would fall further in coming months as labor market conditions ease.

“We will preview the ECB’s forthcoming meeting later in the week but in short the Bank is likely to leave rates on hold for some time,” he said.

Irene Lauro, euro zone economist at Schroders, agreed that the ECB would take its time when considering the trajectory for interest rates.

“With trade uncertainty easing, the Eurozone recovery is set to gain momentum as firms ramp up borrowing and investment. In this environment, the ECB is likely to hold rates cautiously steady in September. The resilience in core inflation supports our view that policy normalisation has ended, and the ECB will closely monitor growth dynamics before making its next move,” she said in emailed comments.

Euro zone inflation for August 2025

UK manufacturing downturn worsens amid slump in new orders

1 September 2025

The downturn in UK factory production worsened last month due to a fall in new orders and export business due to trade tensions, according to new figures.

The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 47.0 in August, slowing from 48.0 in July.

Any reading above 50 indicates that activity is growing while any score below means it is contracting.

It was marginally worse than expected, with economists having predicted a reading of 47.3.

The figures were the worst for three months and represented a setback for the sector after signs of recovering activity earlier in the summer.

Rob Dobson, director at S&P Global Market Intelligence, said firms witnessed a “steep drop” in new orders over August.

He said: “Weak market conditions, US tariffs and downbeat client confidence all contributed to the dearth of new contract wins.

“Job cuts were also reported for a tenth successive month, with factory headcounts dropping to one of the greatest extents post-pandemic.”

The research showed new orders contracted “at the fastest pace in four months”, with manufacturers linking the decline to subdued client confidence and caution regarding costs following recent minimum wage and national insurance contribution increases.

New export business also decreased for the 43rd consecutive month as concerns over tariffs and wider trade tension impacted demand.

Nevertheless, surveyed companies indicated that business optimism was at its strongest level for six months, with firms predicting stronger production over the coming year.

Firms indicated that uncertainty led to further cutbacks in employment last month, with a reduction in jobs for the tenth month in a row.

Mike Thornton, head of industrials at RSM UK, said: “The latest fall in the manufacturing PMI reversed a three-month upward trend with a sharp fall in new orders dragging down the headline figure.

“We tend to see a slight drop-off in new orders seasonally as the summer holidays hit, but the fall this year was sharper than previous years.

“Hopefully it’s a seasonal blip and we will see further signs of a recovery later in the year.”

UK manufacturing downturn worsens amid slump in new orders

Covid-19 Corner

This section will continue only occasionally when something of interest occurs.

 

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

'Vibe hacking' puts chatbots to work for cybercriminals

Paris (AFP) – The potential abuse of consumer AI tools is raising concerns, with budding cybercriminals apparently able to trick coding chatbots into giving them a leg-up in producing malicious programmes.

Issued on: 02/09/2025 - 08:01

So-called "vibe hacking" -- a twist on the more positive "vibe coding" that generative AI tools supposedly enable those without extensive expertise to achieve -- marks "a concerning evolution in AI-assisted cybercrime" according to American company Anthropic.

The lab -- whose Claude product competes with the biggest-name chatbot, ChatGPT from OpenAI -- highlighted in a report published Wednesday the case of "a cybercriminal (who) used Claude Code to conduct a scaled data extortion operation across multiple international targets in a short timeframe".

Anthropic said the programming chatbot was exploited to help carry out attacks that "potentially" hit "at least 17 distinct organizations in just the last month across government, healthcare, emergency services, and religious institutions".

The attacker has since been banned by Anthropic.

Before then, they were able to use Claude Code to create tools that gathered personal data, medical records and login details, and helped send out ransom demands as stiff as $500,000.

Anthropic's "sophisticated safety and security measures" were unable to prevent the misuse, it acknowledged.

Such identified cases confirm the fears that have troubled the cybersecurity industry since the emergence of widespread generative AI tools, and are far from limited to Anthropic.

"Today, cybercriminals have taken AI on board just as much as the wider body of users," said Rodrigue Le Bayon, who heads the Computer Emergency Response Team (CERT) at Orange Cyberdefense.

Dodging safeguards

Like Anthropic, OpenAI in June revealed a case of ChatGPT assisting a user in developing malicious software, often referred to as malware.

The models powering AI chatbots contain safeguards that are supposed to prevent users from roping them into illegal activities.

But there are strategies that allow "zero-knowledge threat actors" to extract what they need to attack systems from the tools, said Vitaly Simonovich of Israeli cybersecurity firm Cato Networks.

He announced in March that he had found a technique to get chatbots to produce code that would normally infringe on their built-in limits.

The approach involved convincing generative AI that it is taking part in a "detailed fictional world" in which creating malware is seen as an art form -- asking the chatbot to play the role of one of the characters and create tools able to steal people's passwords.

"I have 10 years of experience in cybersecurity, but I'm not a malware developer. This was my way to test the boundaries of current LLMs," Simonovich said.

His attempts were rebuffed by Google's Gemini and Anthropic's Claude, but got around safeguards built into ChatGPT, Chinese chatbot Deepseek and Microsoft's Copilot.

In future, such workarounds mean even non-coders "will pose a greater threat to organisations, because now they can... without skills, develop malware," Simonovich said.

Orange's Le Bayon predicted that the tools were likely to "increase the number of victims" of cybercrime by helping attackers to get more done, rather than creating a whole new population of hackers.

"We're not going to see very sophisticated code created directly by chatbots," he said.

Le Bayon added that as generative AI tools are used more and more, "their creators are working on analysing usage data" -- allowing them in future to "better detect malicious use" of the chatbots.

'Vibe hacking' puts chatbots to work for cybercriminals

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

The stock market is but a mirror which provides an image of the underlying or fundamental economic situation. Cause and effect run from the economy to the stock market, never the reverse. In 1929 the economy was headed for trouble. Eventually that trouble was violently reflected in Wall Street.

John Kenneth Galbraith

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