Daily briefing: Fire and fury, gender memo sacking, horse clones

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US President Donald Trump issued a stern warning to North Korea, saying that if its threats to the US continue, the nation will be “met with the fire and the fury like the world has never seen”.

Trump comments came as North Korea spurned a new round of sanctions imposed by the UN Security Council and pledged to continue to press forward with development of nuclear weapons that could reach the US mainland.

The Washington Post reported on Tuesday that North Korea has successfully produced a miniaturised nuclear warhead that can fit inside its missiles, crossing a threshold on the path to becoming a fully fledged nuclear power, according to a confidential assessment by US intelligence officials. (WaPo)

In the news

India claims demonitisation boosted tax returns
Indian tax authorities say they have received 25 per cent more income tax returns for the past financial year, compared with the year before, amid a drive by Prime Minister Narendra Modi’s administration to boost notoriously weak tax compliance. Nearly 28m Indians have so far filed personal income tax returns for the fiscal year that ended March 31, compared with just 22m who had filed tax returns by this time in 2016, India’s finance ministry has said in a statement. (FT)

Another Wells Fargo scandal
The US bank is already bogged down in a fake accounts scandal that led to the ouster of its chief executive — now it faces new regulatory scrutiny for refunding insurance money owed to people who paid off car loans early — a practice that affected 800,000 customers. (NYT)

McDonald’s to double up in China
The fast-food chain has announced plans to double the number of its stores in China — from 2,500 to 4,500 within five years — as the company aims, under new management, to overtake rivals in the world’s fastest-growing consumer market. The expansion announcement comes just days after McDonald’s finalised a deal with Citic and Carlyle to sell a controlling interest in the fast-food company’s China and Hong Kong operations for 20 years. (FT)

Japan upgrades threat from N Korea
Japan has upgraded its official warning on North Korea, saying that the threat had entered a “new stage” and that the regime may have already acquired the ability to miniaturise nuclear weapons. Japan’s annual defence white paper — a hefty document that also highlights China’s “attempts at changing the status quo by coercion” — said the threat posed by Pyongyang had been reassessed after two nuclear tests and more than 20 test firings of ballistic missiles. (FT)

US climate report leaked
draft report by government scientists who say climate change is happening now and severely affecting the US has been leaked to the media — scientists fear the Trump administration may try to suppress it. Meanwhile, staff at another US department have been told to avoid using the term climate change in their work; they should use “weather extremes” instead. (NYT, Guardian)

Google fires memo writer 
Google has fired an employee who wrote an internal memo blasting the web company’s diversity policies. The memo, shared widely at the weekend, suggested fewer women worked at Google becuase of biological differences. The imbroglio is the latest incident concerning gender bias and diversity in the tech enclave. According to an FT analysis in April of 500 tech start-ups in the San Francisco Bay area with fewer than 100 employees, only 23 per cent were female. (Bloomberg, FT)

UK’s ‘super sewer’ The turbid waters of the Thames have been cleaned up dramatically since the river was declared “biologically dead” in 1957. But London’s Victorian-era sewer system still pours at least 40bn litres of water and raw sewage into the Thames each year. Now there may be a solution: a £4.2bn, 15-mile-long “super sewer”. (FT)

The day ahead

Eon reports
The German utility is basking in a German supreme court ruling that declared a nuclear fuel tax imposed on the energy companies in 2010 unconstitutional. The ruling allows operators Eon, RWE and EnBW to claim billions of euros in refunded taxes, with Eon entitled to €3.3bn. It was welcome news for a group of companies that have been battered by Germany’s radical shift away from nuclear power and fossil fuels to renewables, which left Eon and RWE with massive debts and crippled balance sheets. (FT)

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

Five things we learnt from earnings season
Earnings growth is being driven by tech, energy and financials; US consumers are cautious; companies are loath to talk about the benefits of the weaker dollar; the prospect of corporate tax reform is already affecting corporate decisions; and Donald Trump is not as popular as he used to be. Read the full breakdown here. (FT)

How America lost its mind
Kurt Andersen traces how the US arrived at the post-truth age, “the ultimate expression of mindsets that have made America exceptional throughout its history”, and the country’s age-old susceptibility to hucksters. (Atlantic)

Is Alexei Navalny a genuine alternative to Vladimir Putin?
Russia’s anti-corruption campaigner is struggling to present a convincing policy programme to the wider public. (FT)

Horse clones are off to the races
Clones are already a regular feature in the world of competitive polo — they’re likely to perform in the next Olympics too. What does the use of clones mean for the future of sport? (Bloomberg)

Rise of the racist robots There is a saying in computer science: garbage in, garbage out. When we feed machines data that reflect our prejudices, they mimic them — from anti-Semitic chatbots to racially biased software. Does a horrifying future await people forced to live at the mercy of algorithms? (Guardian)

Iraq and lessons for Brexit The comparison might sound provocative — a bloody war and a peaceful referendum differ hugely. Nevertheless, striking parallels exist between the way that the neoconservatives — the ones that persuaded George W Bush to invade Iraq — and the Brexiters think about the world. (Economist)

Video of the day

Rinehart bets on China’s demand for beef
Australia’s richest woman wants to export live cattle to China but the success of her business depends on changing China’s laws over the bluetongue disease. The FT’s Jamie Smyth reports. (FT)