Know someone who would like this newsletter? Forward it to them.
The World
President Biden strengthened his warning to Russia about a potential attack on Ukraine, saying that any movement of Russian units across the Ukrainian border would be taken as an invasion, a day after the president triggered alarm in European capitals with his suggestion of divisions among allies. Speaking to reporters at the White House after hours of efforts by his administration to walk back his Wednesday comments, Biden insisted that he had been “absolutely clear” with President Putin that a new incursion in Ukraine would be met by a “severe and coordinated economic response.” (New York Times)
Antony Blinken says Russia risks a crisis 'with global consequences': Washington's top diplomat, in Germany as part of a whistlestop tour of Europe, warned that Russia risked reviving Cold War-era divisions in Europe as it threatens Ukraine. (Deutsche Welle)
French President Emmanuel Macron called on EU countries to launch new security negotiations with Russia to defuse ever-increasing military tensions on the Continent. Speaking at the European Parliament in Strasbourg, Macron pitched his idea as a vital need for Europe to affirm its sovereignty. (Politico EU)
NATO Secretary General Jens Stoltenberg said Biden's "minor incursion" comment was not a green light to a potential Russian invasion of Ukraine. British Prime Minister Boris Johnson said: "Be in no doubt that if Russia were to make any kind of incursion into Ukraine, or on any scale, whatever, I think that that would be a disaster, not just for Ukraine, but for Russia." (Reuters)
Lithuania’s exports to China suffered a near-total collapse in December, amid a blazing row over the Baltic state’s support for Taiwan. Chinese government customs data released on Thursday showed shipments from Lithuania to China dropped by 91.4% last month from a year earlier. Compared to November 2021, the drop was 91.1%, offering factual evidence to support Lithuanian exporters’ complaints that they have been frozen out of the Chinese market in recent weeks. (South China Morning Post)
David McCormick, the former chief executive of hedge fund giant Bridgewater Associates who is running for the open Senate seat in Pennsylvania, has the backing of some of Wall Street’s biggest names. Stephen Schwarzman and Ken Griffin are among those hosting a fundraiser in March for Mr. McCormick at Paul Tudor Jones’s home in Palm Beach, Fla., according to an invitation viewed by The Wall Street Journal. Co-hosts include Gary Cohn, the former Goldman Sachs Group Inc. president and economic counselor to President Donald Trump ; hedge-fund billionaire Stanley Druckenmiller ; Bob Steel, a longtime banking executive and former Treasury Department official; and Bill Ford, the chief of investment firm General Atlantic. (Wall Street Journal)
Texas pipeline company walks back threat to cut off gas to power plants: The new development ends the immediate threat that up to 400,000 customers could lose power, but the underlying financial dispute between two energy giants stemming from last February's winter storm remains unresolved. (Texas Tribune)
1-in-10 Black people living in the U.S. are immigrants: Roughly 4.6 million, or 1-in-10, Black people in the U.S. were born in a different country as of 2019, up from 3% in 1980. By 2060, the U.S. Census Bureau projects that this number will increase to 9.5 million, or more than double the current level. Between 1980 and 2019, the nation’s Black population as a whole grew by 20 million, with the Black foreign-born population accounting for 19% of this growth. In future years, the Black immigrant population will account for roughly a third of the U.S. Black population’s growth through 2060. The Black immigrant population is also projected to outpace the U.S.-born Black population in growth. (Pew Research Center)
Economy
Wall Street’s leading banks increased pay by nearly 15% last year as they fought a war for talent that is expected to drag on as long as dealmaking remains buoyant. JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America disclosed in recent days that they had handed out $142bn in pay and benefits in 2021, up from $124bn in 2020, in an effort to keep their top bankers satisfied and cope with a global rise in wage inflation. (Financial Times)
On Wall Street, bonuses are up, but the mood is not. Meanwhile, JPMorgan pays chief Dimon $34.5m after record profits in 2021 — his biggest pay packet since 2008. (Wall Street Journal, Financial Times)
‘No amount of money' can lure bankers to Hong Kong, recruiters say. (Bloomberg)
Treasury Secretary Janet Yellen defended the Biden administration’s economic achievements over the president’s first year in office and said that she hopes to see inflation closer to 2% by the end of 2022. She highlighted robust gains in the U.S. labor market over the last 12 months, including the addition of over 6 million jobs and an unemployment rate under 4%. (CNBC)
Home sales reached a 15-year high in 2021: Existing-home sales rose 8.5% last year to 6.12 million, fueled by low interest rates and remote work. However, housing economists expect the market frenzy to subside in 2022 as mortgage rates rise. (Wall Street Journal)
A year’s worth of Nasdaq tumult has been jammed into three weeks, entering correction territory as tech stocks resume their slide. (Bloomberg)
Oil slipped as investors took profits after a recent price rally, but strong demand and short-term supply disruptions continue to support prices close to their highest since 2014. “The voices of those forecasting $100 per barrel oil are getting louder by the day,” said Tamas Varga at oil brokerage PVM. (Reuters)
Why oil prices are surging but investment is drying up: Even as oil prices climb higher, the flow of money into new oil and gas projects has stalled as investors increasingly avoid industries that produce fossil fuels and heavy carbon emissions. That breakdown between energy prices and capital expenditures is likely to prop up the cost of a barrel of oil, but it could also help support the transition to low-carbon energy. Michele Della Vigna, head of natural resources research in EMEA at Goldman Sachs, explained the firm’s outlook for commodity prices as investors increase their focus on climate change. (Goldman Sachs)
The Fed released its long-awaited study of a digital dollar, exploring the pros and cons of the much-debated issue and soliciting public comment. Billed as “the first step in a public discussion between the Federal Reserve and stakeholders about central bank digital currencies,” the 40-page paper shied away from any conclusions about a central bank digital currency, or CBDC. Instead, it provides an exhaustive look at benefits such as speeding up the electronic payments system at a time when financial transactions around the world already are highly digitized. Some of the downside issues the report discusses are financial stability risks and privacy protection while guarding against fraud and other illegal issues. (CNBC, Federal Reserve)
Technology
Peloton is temporarily halting production of its connected fitness products as consumer demand wanes and the company looks to control costs, according to internal documents obtained by CNBC. Peloton plans to pause Bike production for two months, from February to March, the documents show. It already halted production of its more expensive Bike+ in December and will do so until June. It won’t manufacture its Tread treadmill machine for six weeks, beginning next month. And it doesn’t anticipate producing any Tread+ machines in FY22. $2.5 billion was wiped from Peloton’s market value as shares tumbled below its IPO price. (CNBC)
Netflix quietly admitted that streaming competition is eating into growth. Shares fell more than 18% after hours after forecasting just 2.5 million new net global subscribers for its first quarter. Netflix last week announced it was raising prices in the U.S. and Canada, potentially exacerbating competitive pressures. (CNBC)
Meta is working on plans to allow users to create and sell non-fungible tokens as Facebook’s parent company seeks to join the rush of companies trying to capitalize on the digital collectible craze. Teams at Facebook and Instagram are readying a feature that will allow users to display their NFTs on their social media profiles, as well as working on a prototype to help users create — or mint — the collectible tokens, according to several people familiar with the matter. (Financial Times)
General Catalyst's Secret CEO: Hemant Taneja somehow finds time to be an idealist and an operator. “The right way to spend your time as an investor is the right mix of intentionality and serendipity,” Taneja told me in a recent hour-long conversation. That might not sound like earth-shattering advice, but that understated maxim has helped Taneja generate billions of dollars in returns and ascend to the upper echelons of the venture capital industry. Since moving to Silicon Valley in 2010 and opening General Catalyst’s California office, Taneja has proved he can follow the herd, buck conventional wisdom, and play the inside game at General Catalyst — all at the same time. Now, thanks to Taneja, General Catalyst holds a substantial stake in Silicon Valley’s largest private unicorn. In another deal, Taneja generated a multi-billion dollar return from a single investment — seemingly the largest ever in digital health. And I’d heard whispers that he was quietly leading venture capital firm General Catalyst, which is in the process of raising another suite of funds. (Eric Newcomer)
Amazon Style is a new kind of physical store from the online shopping giant that will focus on clothing, footwear, and other fashion accessories, the company announced. In line with Amazon’s existing retail locations, the new Amazon Style store is packed to the gills with shopping tech. Amazon says clothes racks will feature QR codes, which customers can scan to see available sizes, colors, customer ratings, and product details. Then, with a tap of a button, selected items will be sent to a fitting room to try on without having to first rummage through racks. Amazon will also send additional items its algorithms think you might like. (The Verge)
Smart Links
Andreessen Horowitz seeks $4.5bn for new crypto investments. (Financial Times)
Twitter expands offices at S.F. headquarters despite remote work trends. (San Francisco Chronicle)
DeepMind co-founder leaves Google for venture capital firm. (Financial Times)
Robot umpires to be used in Triple-A in 2022. (ESPN)
The biggest travel trend of 2022: Go big, spend big. (CNBC)
Global music subscribers hit 523.9M in Q2 2021, up 26.4% YoY. (Midia)