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The World
The U.S. economy shrank in 2020 for the first time since the financial crisis, but grew rapidly in 4Q20 and is forecast to continue recovering following its worst year since the 1940s. Measured year-over-year, the economy contracted 3.5% last year, the largest decline since just after WWII and the first since 2009 in the wake of the financial crisis. Measured from the fourth quarter to the same quarter a year earlier the economy shrank 2.5%. (Wall Street Journal)
Open hostility broke out among Republicans and Democrats in Congress amid growing fears of physical violence and looming domestic terrorism threats from supporters of former president Trump, with House Speaker Pelosi leveling an extraordinary allegation that dangers lurk among the membership itself: “The enemy is within the House of Representatives, a threat that members are concerned about, in addition to what is happening outside,” Pelosi said. Hours after Pelosi’s remarks, House Minority Leader McCarthy met with Trump in Florida. In a statement, the pair vowed to work together to take back the House. On Thursday afternoon, Rep. Matt Gaetz traveled to the district of Rep. Liz Cheney to hold a rally criticizing her vote to impeach Trump earlier this month. (Washington Post)
General Motors set a 2035 target date for phasing out gasoline- and diesel-powered vehicles from its showrooms globally, among the first major auto makers to put a timeline on transitioning to a fully electric lineup. The move, one of the most ambitious in the auto industry, is a piece of a broader plan by the company to become carbon neutral by 2040. Vehicles that run on fossil fuels and emit pollution account for roughly 98% of GM’s sales today and all of its profit. (Wall Street Journal, New York Times)
Aircraft could cut emissions by better surfing the wind: Researchers found flights between London and New York could have used up to 16% less fuel by more accurately following jet stream tailwinds or avoiding headwinds, at a fraction of the cost of other emissions-cutting technologies. (Science Daily)
New Zealand, Vietnam and Taiwan rank the top three in a COVID Performance Index of almost 100 countries for their successful handling of the coronavirus pandemic, with Britain and America near the bottom of the pile. Meanwhile, just 0.04% of Israelis caught COVID-19 after two shots of Pfizer vaccine, as Maccabi health fund releases preliminary results of a study and said the vaccine is 92% effective. (Reuters, Jerusalem Post)
A W.H.O. team has come out of quarantine and will start on-the-ground investigations into the origins of the coronavirus in Wuhan. The scientists will begin interviewing people from research institutes, hospitals and the seafood market linked to the initial outbreak. Their research will rely upon evidence provided by Chinese officials. (BBC News)
The Oklahoma attorney general's office is attempting to return $2 million worth of the malaria drug hydroxychloroquine once touted by former President Trump as an effective Covid treatment. On-location filming in the L.A. region has dropped to the lowest level in over 25 years because of the pandemic. (ABC News, Los Angeles Times)
Beijing gave a stern warning to the Biden administration and Taiwan that the pursuit of independence for the self-ruled island “means war.” Chinese defence ministry spokesman Wu Qian said that the People’s Liberation Army was carrying out military activities in the Taiwan Strait as a necessary “stern response to the interference by external forces and the provocations of the Taiwan independence forces… We are seriously telling those Taiwan independence forces: those who play with fire will burn themselves, and Taiwan independence means war.” (South China Morning Post)
Alexei Navalny issued a defiant message as he appeared in court via video link from jail, warning the Kremlin that it may now have the power to put him in chains, “but this is not going to last forever.” Wearing a blue hoodie and sitting in a small, bare room with pink walls, the opposition leader delivered a biting indictment of President Putin’s Russia, saying that the criminal proceedings against him were absurd. (The Times)
The UK will formally open a new route to citizenship for up to 3m Hong Kong residents from Sunday as the Home Office revealed it had already allowed 7,000 people from the former British colony to settle ahead of the scheme’s launch. (Financial Times, South China Morning Post)
Marine Le Pen, champion of the French far right, has come within reach for the first time of beating President Macron in next year’s election, according to a Harris poll. If the May 2022 run-off were staged now, Ms Le Pen would have 48% of the vote, with Mr Macron on 52%, according to a poll carried out online on January 19. (The Times)
Watch California: First there was the Governor Newsrom recall, gaining steam because of donations from prominent tech execs. Then there was the Clubhouse conversation, led by Michelle Tandler and Mike Solana, which began as a discussion about the future of SF and quickly devolved into an argument about how to fix the city's crime problem. And The Intercept reported that Jason Calacanis wants to fund a journalist to investigate the criminal justice reforms of SF District Attorney Chesa Boudin. Then, Chamath Palihapitiya got involved, announcing that he would be running for governor to replace Newsom as part of the statewide recall effort. The Newsom recall campaign needs 1.5 million signatures by mid-March to make it on to the ballot. That was once thought nearly impossible, but the campaign may have more than 1.2 million signatures already. (Source Code)
Climate change puts hundreds of coastal airports at risk of flooding: Scientists have found that 269 airports are at risk of coastal flooding now. A temperature rise of 2C - consistent with the Paris Agreement - would lead to 100 airports being below mean sea level and 364 airports at risk of flooding. If global mean temperature rise exceeds this then as many as 572 airports will be at risk by 2100, leading to major disruptions without appropriate adaptation. (Newcastle University)
The economy is getting even worse for Americans with a high school diploma or less education. The trend among all Americans age 25 or older: In December 2019, 53% of these Americans with a high school education or less were employed. By December 2020, that dropped to 48%. That means that one out of every 20 has lost employment in the past year. A fifth of those losses occurred in November and December. (Washington Post)
Economy
What changes to industry and society will 2021 bring? “ESG is good for business,” writes Vindi Banga, Senior Partner, Clayton Dubilier & Rice: We enter 2021 at a time of great – perhaps systemic – challenges, but more importantly, extraordinary opportunity. Businesses have seen enterprise risk associated with environmental and social performance take center stage in the board room. Being responsible means you cannot deplete the planet’s resources for your own business purpose or wealth. In fact, if you shift the debate, you see clearly why ESG is good for business. It’s not something to do because people want you to do it. It’s creating value by doing more with less. It’s enabling productivity by building more equitable and satisfied communities and workplaces. I grew up in India in a house where everything was reused. When you think about the value chain that recycling can offer, you see value in waste. So, there’s going to be threat on one side, but huge opportunity on the other. We live in the same society in which we do business. You can’t separate those two. And that’s how we deliver responsible industry transformation and growth.” (World Economic Forum)
Robinhood drew down at least several hundred million dollars via a credit facility with banks led by JPMorgan and including Goldman Sachs, Morgan Stanley, Barclays and Wells Fargo. The drawdown came after Robinhood and other retail brokers restricted trading in a number of companies whose share prices had risen sharply over the past week. After the cash injection, the company said it would allow trading in those securities to resume on a limited basis today. Meanwhile, the "GameStop effect" could ripple further as Wall Street eyes “short squeeze” candidates. (Financial Times, Reuters)
Robinhood has a stacked policy team — and it's going to need it. (Axios)
Google deleted ~100K reviews for the Robinhood app on the Play Store, bringing its rating back to 4 stars, after users dropped its rating to 1-star. (9to5Google)
Dogecoin, a digital coin originally founded as a joke, has soared over 800% after a Reddit board talked about making it the cryptocurrency equivalent of GameStop. The price of dogecoin stood at $0.070755 at around 12.01 p.m. Singapore, up over 800% from 24 hours before, according to Coingecko. It was not far off of its 24-hour high of $0.072330 earlier in the day. (CNBC)
NBA owners have agreed on a framework allowing investment funds to own parts of franchises, according to two people with knowledge of the decision. The NBA’s Board of Governors has agreed that private equity and other types of institutional investors may own up to 20% equity in a single franchise, and funds may own stakes in a maximum of five teams. No franchise can have more than 30% of its equity held by investment funds, no matter how many funds own a stake in the team, according to the people familiar with the owners’ decision. (Sportico)
American, Southwest posted record losses, as U.S. airlines lost nearly $35 billion last year. (Wall Street Journal)
Japan's youth is the worst hit by country's Covid job losses in 2020, as the unemployment rate stands at 2.9% in December, up 0.7 point a year. (Nikkei Asian Review)
Developing economies borrowed at a blistering pace at the start of the year after a record 2020, prompting questions among investors about whether they are building up debt problems for the future. Governments and companies in developing countries have sold close to $100 billion of bonds so far in January, using the cash to plug budget deficits and shield themselves from the pandemic’s economic impact. In all of 2020, they borrowed $847 billion. JP Morgan: “We’ve never seen a busier start, in terms of issuance year to date—by a large margin.” (Wall Street Journal)
2020 was a remarkable year of performance for environmental leaders in equity markets, and more broadly for ESG champions. In terms of flows, more than USD30 trillion is already invested globally in sustainable assets, according to KPMG (a 34 per cent increase in two years), but USD90 trillion in investments is required to meet the goal of limiting global temperature increase to 1,5°C by 2030. Therefore, the investment opportunities should be as significant as the challenges facing us. Indosuez Wealth Management predicts this trend will continue, extending into private assets as a key contributor. (Wealth Adviser)
Technology
Apple CEO Tim Cook launched a stinging attack on ad-based social networks such as Facebook, arguing that such platforms were responsible for real-world violence and dehumanizing consumers. The comments came a day after Facebook CEO Mark Zuckerberg accused Apple of “regularly” using its dominance to preference its own products. Cook said that “at a moment of rampant disinformation and conspiracy theories juiced by algorithms, we can no longer turn a blind eye to a theory of technology that says all engagement is good engagement… It is long past time to stop pretending that this approach doesn’t come with a cost — of polarization, of lost trust and, yes, of violence.” (Financial Times)
With the aid of outside legal counsel, Facebook for months has been preparing an antitrust lawsuit against Apple that would allege the iPhone-maker abused its power in the smartphone market by forcing app developers to abide by App Store rules that Apple’s own apps don’t have to follow. The legal preparations by Facebook signal that the feud between the companies could further escalate, though ultimately Facebook may decide not to file a suit. (The Information)
Americans now subscribe to four streaming services on average, up from three at the outset of the pandemic. And they’re shelling out 24% more to get their on-demand fix: U.S. consumers spent an average of $47 per month in December 2020 on video subscription services, up from $38 in April. Some good news for cord-cutters: CBS will stream the Super Bowl for free, without authentication. Meanwhile, ESPN is looking to sell X Games as it deals with streaming pressure. (Variety, Fierce Video, The Information)
Funding to Atlanta hit a 5-year high in 2020 as the city produces unicorns at an unprecedented pace lately, positioning the metro area as the leading tech hub in the Southeastern U.S. (Crunchbase)
Bilibili, China's third-largest game-streaming company, is beloved by just about every member of China's Gen Z. And yet it's on the cusp of a massive conflict with one of its investors, Tencent, because it's about to become a real competitor. (Protocol)
The new transit system: Lime introduced mopeds to its fleet, as the third mode of transportation — after scooters and bikes — in its arsenal. Meanwhile, Starship raised $17 million and is taking its delivery robots to two new college campuses. It also announced that its robots have completed one million deliveries. The key to these new systems is flexibility. (Source Code)
Smart Links
50 best Liberal Arts colleges: new ranking. (Forbes, Academic Influence)
Squarespace files privately to go public. (TechCrunch)
Robert Downey Jr. is raising two VC funds focused on startups in the sustainability sector. (Axios)
Hospitals lost $20B by pausing electives last year. (Healthcare Dive)
Beyond Meat shares soar as company teams with PepsiCo to make plant-based snacks and drinks. (CNBC)
The 10 greatest predictions in physics. (Physics World)
Highest price ever for a Botticelli painting, $92.2m, paid at auction. (The Guardian)