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The World
The U.S. will send nearly 3,000 extra troops to Poland and Romania to shield Eastern Europe from a potential spillover from the crisis over the massing of Russian troops near Ukraine. (Reuters)
Vladimir Putin spoke with Boris Johnson by phone, with the Russian leader decrying NATO’s “unwillingness to adequately respond” to Moscow’s security concerns and the transatlantic alliance’s historic eastward expansion. Downing Street said Johnson warned Putin during the call that any further Russian incursion into Ukraine would be a “tragic miscalculation.” (Financial Times)
Iraq has become one of the biggest beneficiaries of Xi Jinping’s Belt and Road Initiative as China deepens its economic ties across the Middle East through billion-dollar construction and energy contracts. Beijing struck $10.5bn in new construction deals in Iraq last year, part of a “strong shift” in its engagement towards the Middle East despite a broader downturn in Chinese outbound investment. Beijing’s efforts to foster deeper economic ties with Iraq, Opec’s second-largest oil producer, coincides with a growing perception among Arab leaders that the US is disengaging from the Middle East. (Financial Times, Fudan University report)
The FBI advised athletes traveling to the Beijing Olympics this month, as well as those competing in the Paralympics in March, to bring a temporary cellphone — a “burner phone” — with them in lieu of their regular device in preparation for the risk of cyberattacks. (NPR)
German Chancellor Olaf Scholz announced he has no plans to attend the Beijing Winter Olympics. (Deutsche Welle)
Polls:
The Supreme Court enters this pivotal period with its public image as negative as it has been in many years, as Democrats – especially liberal Democrats – increasingly express unfavorable opinions of the court. 54% of U.S. adults say they have a favorable opinion of the Supreme Court while 44% have an unfavorable view. The survey was conducted before Justice Stephen Breyer announced his retirement. (Pew Research Center)
The share of adults saying the court is conservative has increased since 2020, from 30% to 38%. Still, more say the court is “middle of the road” (48%), while 9% say it is liberal. A majority of Democrats (57%) say the court is conservative, compared with 18% of Republicans.
84% say Supreme Court justices should not bring their own political views into the cases they decide, but just 16% say they do an excellent or good job in keeping their views out of their decisions.
Americans offer gloomy state of the nation report: Americans' satisfaction with a variety of aspects of U.S. society and the state of policy in key issue areas remains subdued in 2022 after falling in 2021. In fact, in only one area -- acceptance of gays and lesbians -- are more Americans satisfied now than were in 2020, before the COVID-19 pandemic. Over the past year, there have been further meaningful declines in 10 areas, most notably in satisfaction with energy policy, the nation's military strength, the state of the economy, and abortion policy. (Gallup)
The Biden administration is moving to revise federal rules to address potential security risks from TikTok and other foreign-owned apps, eight months after opting not to pursue a forced shutdown of the Chinese-owned video-sharing platform. The Commerce Department recently concluded a public-comment period on the proposed rule change, which would expand federal oversight to explicitly include apps that could be used by “foreign adversaries to steal or otherwise obtain data.” (Wall Street Journal)
Researchers at Johns Hopkins University have concluded that lockdowns have done little to reduce COVID deaths — reducing them by 0.2% — but have had “devastating effects” on economies and numerous social ills. Shelter-in-place orders were also ineffective, reducing COVID-19 mortality by 2.9%, the study said. (WUSF)
U.S. Army begins discharging soldiers who refuse COVID-19 vaccine. (Reuters)
The Swiss government said it is looking at ending all pandemic-related restrictions on public life, including checks on vaccination status and masks, on February 16. (Financial Times)
Former Dolphins coach Brian Flores said his refusal to throw games cost him his job. Now the Cleveland Browns are the latest NFL team to be accused of offering bonuses for losing games. Former head coach Hue Jackson and one of his associates said the team offered the bonuses during the 2016 and 2017 seasons when the Browns won just one of their 32 games. The poor run allowed the team to secure the No 1 overall pick in the 2017 and 2018 drafts, which they used to select star players Myles Garrett and Baker Mayfield. (Reuters, ESPN, The Guardian)
Dry January: Reno went a month with no rain for the first time in nearly 130 years. After experiencing its wettest October on record when close to 3in of rain fell in two days, the area is now facing the other extreme. (The Guardian)
Economy
Americans responded to the pandemic with a dramatic shift in spending to goods from services. That now appears to be reversing and should gather steam as the Omicron wave of Covid-19 ebbs, economists say. After bingeing on goods earlier in the pandemic, consumers are taking a breather. As warmer springtime weather comes to much of the country and falling infection rates help people feel more comfortable socializing in-person, pent-up demand for services such as travel and dining should recover, said Robert Frick, corporate economist with Navy Federal Credit Union. (Wall Street Journal)
Eurozone inflation hits a record 5.1% in January from a year ago as energy prices soar, keeping inflation higher than expected and heightening pressure on the European Central Bank to respond with tighter monetary policy. (Financial Times)
The Bank of England will be forced to revise up its forecasts for inflation for the fourth consecutive time, when it updates it outlook today. Futures markets have bet that the central bank is certain to lift interest rates by 0.25 percentage points to 0.5 per cent in its first back-to-back rate rise since 2004. (The Times)
OPEC and its allies agreed to boost the group’s production quota for the eighth consecutive month, even as data showed that some countries were struggling to keep up with the monthly increases in output. Large oil consumers including the US, India and Japan have regularly called on Opec+ to increase production at a more rapid rate, fearful that energy cost inflation could derail their economic recovery. But Saudi Arabia and other large members of the group have consistently stuck with the plan to increase output more slowly. (Financial Times)
A record-breaking year for PE deal activity in Europe supported a surge in leveraged loan and high yield bond issuance for buyouts in 2021, and points to a busy year ahead. PE deal value in Western Europe in 2021 surpassed record annual highs posted more than a decade ago. Buyout deal value in 2021 totaled US$441.2 billion, more than double the total recorded in 2020. Deal value soared, as PE firms pursued transactions to put deployment timetables that were delayed due to COVID-19 back on track and invest the €185 billion mountain of dry powder available for European deals alone. (White & Case)
Melinda French Gates is no longer pledging to give the bulk of her wealth to the Bill & Melinda Gates Foundation and instead plans to spread it among philanthropic endeavors, according to people familiar with the matter. The billionaire made the change official in late 2021 following her divorce from Bill Gates, when she published her first individual Giving Pledge letter. (Wall Street Journal)
Technology
Facebook parent Meta Platforms Inc. posted rising revenues but a modest decline in profit as it increased spending to execute the pivot to the metaverse that Chief Executive Mark Zuckerberg outlined late last year. Facebook shares plunged after the results were announced, dropping more than 20%. The company said it expected revenue growth to slow in the coming quarter partly because users were spending less time on its more lucrative services. Facebook also cited inflation as a weight on advertiser spending. The user base in the U.S. and Canada—two of the company’s most profitable markets—has stagnated in recent years. (Wall Street Journal)
PayPal shares headed toward their worst one-day performance on record after the payments company lowered its 2022 profit outlook and scrapped an ambitious growth strategy it put in place last year. PayPal shares fell more than 26% midday Wednesday, erasing tens of billions of dollars in market value. (Wall Street Journal)
The New York Times Company reached its goal of 10 million subscriptions ahead of schedule, aided substantially by the 1.2 million it gained by buying the sports news website The Athletic, which closed on Tuesday. In the final three months of 2021, before the Athletic acquisition, The Times added 375,000 digital subscriptions. Those additions included 171,000 to its core news product, meaning the majority were for The Times’s other digital offerings: Games, which includes crosswords; Cooking, its recipes app; Wirecutter, its product-recommendation site; and Audm, which produces audio versions of text-based journalism. The Times also announced a new goal: It will aim, it said, to have at least 15 million subscribers by the end of 2027. (New York Times)
Spotify added more users and saw a surge in advertising revenue in 4Q21 as its podcast strategy took hold despite backlash to its star host. For the quarter, Spotify reported 406 million monthly active users, up 18% from a year earlier and at the high end of the company’s guidance. Paying subscribers, its most lucrative type of customer, rose 16% to 180 million, also at the top of the company’s expectations. However, Spotify shares—down 44% over the past year to $191.92—fell another 16% in after-hours trading as the company said it wouldn’t provide annual guidance. (Wall Street Journal)
DeepMind has created an AI system named AlphaCode that it says “writes computer programs at a competitive level.” The Alphabet subsidiary tested its system against coding challenges used in human competitions and found that its program achieved an “estimated rank” placing it within the top 54 percent of human coders. The result is a significant step forward for autonomous coding, says DeepMind, though AlphaCode’s skills are not necessarily representative of the sort of programming tasks faced by the average coder. (The Verge)
The Florida teenager demanding Elon Musk hand over $50,000 to stop him tweeting the location of the billionaire’s private jet has said he is creating dozens more accounts tracking the movements of other rich and famous people. Jack Sweeney, a 19-year-old college student and aviation enthusiast, said he had created 16 automated Twitter accounts, or bots, similar to @ElonJet to follow jets owned by Microsoft co-founder Bill Gates (@GatesJet), Amazon’s Jeff Bezos, the billionaire entrepreneur Mark Cuban and the rapper Drake. Sweeney said he had also created a website, Ground Control, to “monetize” the service by offering bespoke tracking services to celebrities’ superfans and to host web versions of the Twitter bots if the microblogging site closes his accounts because of privacy concerns raised by the subjects. (The Guardian)
Smart Links
Tesla drivers report a surge in ‘phantom braking.’ (Washington Post)
Growth hedge funds suffer worst rout in years; January troubles add to 2021 losses for many funds. (Wall Street Journal)
New York City’s property taxes are crushing homeowners. (City Lab)
Lunar New Year looks lucrative for Singapore restaurants, as places reported a 10% increase over pre-pandemic holiday sales. (Bloomberg)
Is it still cheaper to invest VC in European vs US startups? (Crunchbase)
DoorDash adds an antitrust lobbyist. (Politico)