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The World
US and Germany are struggling to present united front on Nord Stream 2: President Biden said the Russian-built Nord Stream 2 natural-gas pipeline to Germany would be suspended if Russia invades Ukraine, with the German chancellor offering support but without explicitly saying the project would be killed. “If Russia invades, that means tanks and troops crossing the border of Ukraine, again, then there will be no longer a Nord Stream 2. We will put an end to it,” Biden said, in the appearance with German Chancellor Olaf Scholz. “I promise you, we will be able to do it.” However, Scholz repeatedly dodged questions on the fate of the pipeline, which has been built but is not yet pumping gas, and refused to even mention the project by name. (Wall Street Journal, Deutsche Welle, Financial Times)
UK: Boris Johnson is warning President Putin of Russia that invading Ukraine would only strengthen NATO as he prepares to deploy Royal Marines, RAF Typhoons and Royal Navy warships to eastern Europe. Writing in The Times, the prime minister says that Britain will not “flinch” and that its support to Europe and Nato will remain “unconditional and immovable.” Britain has announced that it will send 350 Royal Marines to Poland. Johnson says that he is prepared to go further and is considering sending Typhoons and warships to southeastern Europe. Plans have been drawn up to deploy jets to Romania and Bulgaria. (The Times)
France: Emmanuel Macron and Vladimir Putin did not appear to reach a breakthrough in marathon talks at the Kremlin on Monday evening aimed at fending off a Russian attack on Ukraine. After five hours of negotiations, Macron warned that the two sides needed to work quickly to avoid the risk of an escalation. Macron is due to travel to Kyiv on Tuesday, where he will hold talks with the president, Volodymyr Zelenskiy. He said he plans to brief Putin on the results of the discussions in a phone call. “I don’t think there are short-term victories,” Macron said. “I don’t believe in spontaneous miracles. There is lots of tensions, nervousness.” (The Guardian)
U.S.: 48% of U.S. voters support President Joe Biden’s deployment of 3,000 troops to bolster NATO allies in Eastern Europe as tensions with Russia escalate over a feared invasion of Ukraine. (Morning Consult)
Ottawa police Chief Peter Sloly said he needs 1,800 more cops and civilians to handle the ongoing convoy protests that began on Jan. 28, representing a massive increase in his police workforce, adding that his force can’t handle the demonstrators alone. Meanwhile, the Boston-based fundraising site GiveSendGo said that the “Freedom Convoy 2022” campaign has become its biggest campaign ever, raising more than $4.5 million US in less than 24 hours. And an Ontario Superior Court Justice granted a temporary 10-day injunction banning the horn honking and air horn blowing that has echoed through downtown Ottawa. The ongoing noisy protest has interfered with “citizens’ right to quiet,” he said. (Ottawa Citizen)
The U.S. approved a possible $100 million sale of equipment and services to Taiwan to "sustain, maintain, and improve" the Patriot missile defense system used by the self-ruled island claimed by China. Upgrades to the Patriot Air Defense System would "help improve the security of the recipient and assist in maintaining political stability, military balance, economic and progress in the region," the U.S. said. (Reuters)
The Supreme Court reinstated an Alabama congressional map that a lower court had said diluted the power of Black voters, suggesting that the court was poised to become more skeptical of challenges to voting maps based on claims of race discrimination. The vote was 5 to 4, with Chief Justice John G. Roberts Jr. joining the court’s three liberal members in dissent. The Supreme Court’s brief order, which included no reasoning, was provisional, staying a lower court’s decision while the case moves forward. The justices said they would hear Alabama’s appeal of the lower court’s ruling, but they did not say when. Both the stay and the decision to hear the case indicated that the court is open to weakening the role race may play in drawing voting districts for federal elections, setting up a major new test of the Voting Rights Act in a court that has gradually limited the reach of the law in other contexts. (New York Times)
The Democratic governors of New Jersey, Connecticut and Delaware will lift mask requirements for schools in the coming weeks, reflecting a nationwide shift away from restrictions as coronavirus caseload numbers fall and political pressures for a return to normalcy rise. Oregon will lift mask mandate by March 31, with the new timeline also applying to schools. (Washington Post, The Oregonian)
California will lift mask mandate for vaccinated residents in indoor public places. Masks will still be required for unvaccinated residents indoors and for everyone in select settings such as in hospitals and nursing homes or while aboard public transit. (Los Angeles Times)
Biden’s top science adviser, Eric Lander, resigned amid reports of bullying. The White House initially stood by him despite the president’s zero-tolerance policy and numerous credible reports of misconduct. (Politico)
Electronic implants have for the first time enabled people totally paralyzed by spinal cord injury to stand, walk and even swim and cycle. Swiss researchers at École Polytechnique Fédérale de Lausanne and Lausanne University Hospital announced in 2018 that their devices had restored movement to the legs of paraplegic patients with partial spinal injuries. Now they have improved the technology with new implants and artificial intelligence software to restore trunk and leg function to three patients whose lower limbs had been completely immobile. (Financial Times, Nature)
Economy
Spirit and Frontier Airlines announced a $6.6 billion merger, a combination of low-fare carriers that would create America's fifth-largest airline. The companies have yet to say what brand they'll fly under or who would lead management of the new airline. The combined company would offer more than 1,000 daily flights to over 145 destinations. The merged carrier would leapfrog JetBlue and Alaska Air in the number of miles flown by paying passengers, putting them behind the four major airlines that control about 80% of the nation's air traffic -- American, Delta, United and Southwest Airlines. (CNN)
Goldman and Citigroup see winning bets against a super-sized Fed hike in March. (Bloomberg)
The debate over the creation of a digital dollar will likely focus on issues other than whether it’s “doable,” including “whether or how to adopt a central bank payment system for the U.S.," Neha Narula, director of MIT’s Digital Currency Initiative, said. The most contentious issue is privacy. The Fed has stressed its importance in designing a digital dollar, but it also noted the importance of complying with rules “designed to combat money laundering and the financing of terrorism.” This has sparked fears that the Fed will create a digital dollar that gives the central bank the ability to track each and every digital dollar — a scenario that led Minnesota Rep. Tom Emmer to warn against “digital authoritarianism.” (Protocol Fintech)
The U.S. Treasury says NFTs can be used for money laundering schemes, adding to an existing problem in the art world. (U.S. Treasury, Protocol Fintech)
The U.S. reached a deal with Japan that will lift a portion of the additional 25% tariff imposed on steel imports under former President Donald Trump in 2018. A 10% tariff on aluminium will remain in place. (Nikkei Asia Review)
The tech talent shortage is helping drive M&A deals: The pandemic sparked a 10% increase in IT and business-services deals in 2021 as companies boosted budgets and tech staffing. (Wall Street Journal)
KPMG: UK-based fintech companies raised $37.3B in 2021 across 601 deals, up from $5.2B in 2020; global fintech investment rose 70% to $210B+ in 2021. (Bloomberg)
In Covid-19 housing market, the middle class is getting priced out. The surge in home prices and sharp decline in the number of homes for sale have made home buying more difficult for many Americans compared with two years ago. At the end of last year, there were about 411,000 fewer homes on the market that were considered affordable for households earning between $75,000 and $100,000 than before the pandemic. At the end of 2019, there was one available listing that was affordable for every 24 households in this income bracket. By December 2021, the figure was one listing for every 65 households. (Wall Street Journal)
Technology
SoftBank’s $66bn sale of UK-based chip business Arm to Nvidia collapsed after regulators in the US, UK and EU raised serious concerns about its effects on competition in the global semiconductor industry. The deal, the largest ever in the chip sector, would have given California-based Nvidia control of a company that makes technology at the heart of most of the world’s mobile devices. A handful of Big Tech companies that rely on Arm’s chip designs, including Qualcomm and Microsoft, had objected to the purchase. SoftBank will receive a break-up fee of up to $1.25bn and is seeking to unload Arm through an initial public offering before the end of the year. (Financial Times)
Peter Thiel, one of the longest-serving board members of Meta, the parent of Facebook, plans to step down. Thiel, 54, wants to focus on influencing November’s midterm elections. Thiel sees the midterms as crucial to changing the direction of the country, this person said, and he is backing candidates who support the agenda of former President Trump. Over the last year, Thiel, who has a net worth estimated at $2.6 billion by Forbes, has become one of the Republican’s Party’s largest donors. (New York Times)
In its annual SEC report, Meta repeats its warning that it may be forced to shut down “significant” services in Europe if the EU adopts new data transfer rules. (City A.M.)
Amazon will boost its maximum base pay to $350,000 for corporate and tech employees, from $160,000 previously, as part of an overall increase in total compensation intended to help recruit top talent and retain existing employees. The move promises to bring Amazon’s base pay more in line with other big tech companies, including Google, Facebook, Apple and Microsoft. Historically, Amazon has kept its base pay lower than many of its peers have, making up the difference with restricted stock units and cash compensation such as a sign-on bonus, paid over two years. Those additional components of compensation will remain in place. (GeekWire)
When Amazon reported its latest quarterly earnings last week, the company also announced a price increase for Prime membership. Amazon’s logistics costs have skyrocketed over the past decade, with shipping and fulfillment costs growing almost 40-fold between 2009 and 2021. Last year alone, the company’s shipping costs, which include sortation and delivery centers and transportation costs, amounted to $76.7 billion, with fulfillment costs (e.g. costs of operating and staffing fulfillment centers) adding another $75.1 billion to a hefty logistics bill. While Amazon’s revenue also grew more almost 20-fold since 2009, that wasn’t enough to offset the surge in logistics costs. In 2009, shipping and fulfillment costs amounted to 15.6% of net sales. By 2021, that share had risen to 32.9%. (Statista)
Tesla cut a steering component from some cars to deal with chip shortage, sources say. Tesla excluded one of two electronic control units in the steering racks of Shanghai-built Model 3 and Model Y cars to deal with chip shortages, CNBC has learned. Sources say that tens of thousands of cars with the tweaked power steering system are already shipping to customers in China, Australia, and Europe. (CNBC)
Industry Dive, which publishes 53 business newsletters, says it is on pace to generate $105M to $110M in 2022 revenue, up from $29M in 2019 and $85M in 2021. (Adweek)
Smart Links
Wall Street learns to relax about returning to office; banks more tolerant of hybrid working as they compete for talent. (Finanical Times)
Bitcoin rises to its highest level in a month, bouncing from January lows. (CNBC)
Survey: Staffing overtakes financial challenges as top concern among hospital CEOs. (Healthcare Dive)
IRS retreats from facial recognition to verify taxpayers’ identities. (Wall Street Journal)
Peloton stock price surges following reports of possible acquisition. (Axios)