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The World
President Biden is considering deploying several thousand U.S. troops, as well as warships and aircraft, to NATO allies in the Baltics and Eastern Europe, an expansion of American military involvement amid mounting fears of a Russian incursion into Ukraine. The move would signal a major pivot for the Biden administration, which up until recently was taking a restrained stance on Ukraine, out of fear of provoking Russia into invading. But as President Vladimir V. Putin has ramped up his threatening actions toward Ukraine, and talks between American and Russian officials have failed to discourage him, the administration is now moving away from its do-not-provoke strategy. (New York Times)
Germany’s dependence on Russian gas has left Europe short of options to sanction Moscow if it invades Ukraine—and itself vulnerable should Russia stop gas exports to the West. A two-decade-old decision to phase out nuclear power and more recent moves to cut reliance on coal in an effort to bring down CO2 emissions mean Germany is now more reliant on Russian gas than most of its neighbors, not just for heating but also for power generation. This year, the country’s last three nuclear power plants will be closed, just as Germany faces some of the highest energy prices in the developed world. All German coal plants are due to be closed by 2038. (Wall Street Journal)
Fears mount Russia will weaponize gas supplies over Ukraine crisis, as UK ministers have been warned that they will have to contend with record-breaking gas and petrol prices in the event of a Russian invasion of Ukraine. (The Times)
The U.S. food supply is under pressure, from plants to store shelves, as weeks of workers calling in sick add to continuing supply and transportation disruptions, making store shelves harder to fill. In AZ, one in 10 processing plant and distribution workers at a major produce company were recently out sick. In MA, employee illnesses have slowed the flow of fish to supermarkets and restaurants. A grocery chain in the U.S. Southeast had to hire temporary workers after roughly one-third of employees at its distribution centers fell ill. Food-industry executives and analysts warn that the situation could persist for weeks or months. (Wall Street Journal)
Train robberies are a problem in Los Angeles, and a blame game has ensued: Union Pacific and law enforcement blame each other for heists involving thousands of packages. Union Pacific said it has seen a 160% jump in criminal rail theft in Los Angeles since December 2020, including sharper increases in the months leading up to Christmas, when trailers are loaded with inventory bound for stores or gifts shipped to homes. The total losses to Union Pacific, with a market capitalization of $155 billion, have come to $5 million over the past year. (Wall Street Journal)
A new study reveals a racial bias in how clinicians describe patients in their electronic health records, raising concerns about stigmatizing language that could contribute to ongoing racial and ethnic healthcare disparities. Black patients were 2.5 times more likely to have one or more negative descriptor in their EHR compared with White patients. Patients with government insurance and unmarried patients also had higher adjusted odds of negative descriptors compared with commercially insured and married patients. (Healthcare Dive)
America’s population size is standing still, according to new data from the U.S. Census Bureau. Population growth over the 12-month period from July 1, 2020 through July 1, 2021 stood at unprecedented low of just 0.12%. This is the lowest annual growth since the Bureau began collecting such statistics in 1900, and reflects how all components of population change—deaths, births, and immigration levels—were impacted during a period when the COVID-19 pandemic became most prevalent. The new estimates show that during this period, population growth declined from the previous year in 31 of 50 states as well as Washington, D.C., with 18 states sustaining absolute population losses. In some states, especially California and New York, population losses were exacerbated by inflated out-migration during the pandemic, just as other states such as Florida and Texas benefitted from greater population in-flows. (Brookings)
Economy
Goldman sees risk Fed will tighten more than forecast. (Bloomberg)
Four-day weeks and the freedom to move anywhere: Companies are rewriting the future of work (again). As omicron spreads, more companies are adopting creative approaches and using technology to help mitigate workplace inequity. (Washington Post)
Hong Kong’s financial sector faces talent crunch as expats head for the exit. (Reuters)
Less than 35% of the $800 billion in PPP loans actually went to workers, say economists. A study co-authored by MIT economists finds the bulk of loan money handed out through the Paycheck Protection Program (PPP) helped business owners and shareholders. They estimate that “somewhere between 23% and 34% of PPP dollars went to workers who would’ve otherwise lost their jobs." (Fast Company)
The incentives that drive PE firms have an interesting by-product: a reduction in income inequalities, such as the gender wage gap. According to INSEAD preliminary research, a by-product of PE firms’ focus on efficiency is a reduction in wage gaps within their target companies. Looking at French data, we found that post-buyout, target firms separate from expensive employees in high-pay categories (men, managers, older employees) and replace them with cheaper ones. This reduces the wage difference between men and women by 6.5%, that between managers and non-managers by 3.3% and that between young employees and older ones (older than 50 years old) by 18.1%. This shrinking of wage gaps becomes visible one year after the deal closing and remains significant three years thereafter. Importantly, men, managers and young employees who stay at the firm experience small pay increases between 1.5 and 2.8%. This means that the reduction in pay gaps isn’t due to pay cuts across the board. However, on average, highly paid men, managers and older employees leave and are replaced with less expensive staff. (INSEAD)
Three-quarters of institutional investors say they may divest from companies with poor environmental track records. 90% say they now pay more attention to companies’ ESG performance when making investment decisions, but admit they’ve been slow to take concrete action. Meanwhile, a rising number of investors worry about the quality and clarity of information from companies. (EY)
In a culture that still largely views gender on binary terms, transgender people in America face unique challenges in the job-application process. Half of transgender respondents to a recent McKinsey survey indicated they couldn’t be their full selves when applying for jobs. Only 33 percent of cisgender applicants indicated the same. (McKinsey)
Technology
An activist investor wants Peloton to fire its chief executive and explore a sale after the stationary-bike maker’s stock plummeted more than 80% from its high, as growth slowed. Blackwells Capital LLC has a significant stake of less than 5% in Peloton and is preparing to push the company’s board to fire CEO John Foley and pursue a sale. (Wall Street Journal)
What to expect at Apple’s first major launch event of the year, likely in March or April: It’s a shoo-in that you’ll see a new iPhone SE, which will probably have a similar design to the current model but a faster processor and 5G support. Given that the iPad Air hasn’t been updated since the end of 2020, I’d say a new version of that product also is possible. Look for that device to get the A15 chip from the iPhone 13, matching the iPad mini from last year. This spring will mark a year since the last iPad Pro upgrade, and that model launched about a year after the 2020 version. But I don’t expect the new model to arrive that quickly this time around. (Bloomberg)
Netflix faces a dystopian future in which hits do not guarantee growth: Investors appear to be waking up to the high cost of the streaming business — and the often short shelf life of content on the services. After the Netflix report, analysts at MoffettNathanson noted that the “decay rate” of streaming content was “incredibly rapid”, especially when popular programming could be binged in a single night. This means that “streamers have to continuously spend on new content to grab and hold new members, with any slowdown in that spend resulting in a softer quarter” for subscriber growth, the firm said in a research note. “We question whether or not streaming is a good business,” said Michael Nathanson, an analyst at the firm. “It requires a tonne of fresh content.” (Financial Times)
American Airlines has filed a lawsuit against travel tips site The Points Guy, claiming the site has violated the terms of use of its frequent flyer program by offering an app that lets users track airline miles from multiple airlines in one place. It’s seeking an order blocking The Points Guy from accessing or using American Airlines customer data and from allowing its users to access their own accounts through the TPG app or site. American is also seeking to block The Points Guy from displaying the American Airlines logo and other trademarks. (The Verge)
TikTok for business:
Advertisers love TikTok. Now they’re looking to double their spending on it. (The Information)
The best company TikToks are unhinged — and it's working. Companies looking to get on TikTok should learn to be part of the TikTok community, not a brand advertising on it. One day in November, Duolingo’s social media team convened to film a TikTok. TikTok may be one of the few corners of the internet where companies can find success by acting completely unhinged. In order to accomplish that, Parvez and social media managers at companies like Microsoft and AT&T said they’ve learned to establish themselves as a persona, not a brand. That makes users see them as part of the TikTok community and want to engage. (Protocol)
Smart Links
New Zealand PM Jacinda Ardern cancels wedding as Asia-Pacific countries battle Omicron. (Financial Times)
Hundreds of Minnesotans take advantage of state's tuition-free nursing assistant training. (Minneapolis Star Tribune)
Winter Olympics are two weeks away, but sponsors are keeping a low profile. (Wall Street Journal)
Your hotel concierge is probably a texting robot. Srsly. (Wall Street Journal)
Disney tops 2021 box office, thanks to Marvel. (Axios)