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The World
How space became the next U.S.-China “Great Power” contest: Beijing’s rush for antisatellite arms began 15 years ago. Now, it can threaten the orbital fleets that give the United States military its technological edge. Advanced weapons at China’s military bases can fire warheads that smash satellites and can shoot laser beams that have a potential to blind arrays of delicate sensors. And China’s cyberattacks can, at least in theory, cut off the Pentagon from contact with fleets of satellites that track enemy movements, relay communications among troops and provide information for the precise targeting of smart weapons. (New York Times)
China’s surging private space industry is out to challenge the U.S. — and increasingly, the focus is on building a homegrown commercial space industry. The nation's private space business is focused on reducing the cost of spaceflight, increasing China’s international influence—and making money. And it’s moving fast. (MIT Technology Review)
The U.S. House of Representatives formally delivered an article of impeachment charging former president Trump with inciting the deadly insurrection at the Capitol. Janet Yellen gained Senate confirmation as first woman to lead the Treasury Department. Also in the Senate, McConnell dropped his demand that the new Democratic majority promise to preserve the filibuster. McConnell found a way out by pointing to statements by two centrist Democrats, Manchin and Sinema, that said they opposed getting rid of the procedural tool — a position they had held for months. (Washington Post, CNBC, New York Times)
Biden now hopes for 1.5 million vaccinations a day, a big jump from earlier comments, as the nation's first Brazil viral variant is found in Minnesota, and California ended its stay at home orders. In Israel, in the week after their 2nd Pfizer vaccine shot, only 20 of 128,000 Israelis got Covid. The figure represents 0.015% of people, indicating the vaccine is hitting 95% efficiency rate predicted by clinical trials. (Washington Post, Star Tribune, Los Angeles Times, Times of Israel)
Merck will stop developing current Covid-19 vaccines the company was working on, citing inadequate immune responses, while continuing to work on therapies. Separately, Moderna is launching a trial of a new vaccine to tackle the South Africa strain after warning that its existing jab was less effective at tackling the new variant. (STAT News, Financial Times)
Brexit meets Covid: The EU told Pfizer and other drug companies they must secure its permission before exporting vaccine doses to Britain amid concerns about the level of supply. The intervention will raise fears that Britain’s vaccine supplies, made in Belgium, could be disrupted. Germany suggested vaccine exports could be blocked to safeguard supplies within the EU. (The Times)
Dutch rioters who attacked police and destroyed property while protesting new coronavirus measures are “criminals,” Prime Minister Mark Rutte said, as law enforcement officials warned that the violence could last for weeks. Authorities imposed a new nighttime curfew — the first in the Netherlands since World War II. (Washington Post)
President Putin disputed claims that he is the secret owner of a £1 billion palace on the coast of the Black Sea as he tries to quell the rising public anger that has fueled nationwide protests. (The Times)
Italian prime minister Giuseppe Conte will resign today in an escalation of the political instability that has enveloped the country as it battles the pandemic and a brutal recession. Conte is then expected to attempt to form a new government within the existing parliament. (Financial Times)
Chinese and Indian troops clashed again in a disputed border area, with injuries on both sides. India's army said there had been a "minor" incident that had been “resolved.” Meanwhile, China’s military is preparing “for war’ with joint operations and cross-training, as after five years of modernization and restructuring command chains, the People’s Liberation Army is focusing on cross-service combat to maximize its fighting powering the most likely combat scenarios, such as a campaign against Taiwan. Germany is considering sending a naval frigate to Japan as part of its new focus on the Indo-Pacific. (BBC News, South China Morning Post, Nikkei Asian Review)
The U.S. rejected Hong Kong’s request for a dispute settlement panel at the WTO over Washington’s decision to label goods made in Hong Kong as “Made in China.” Hong Kong made a request at a meeting of the WTO’s dispute settlement body in Geneva. The Hong Kong government had confirmed earlier in January that it would file the request, after U.S. authorities “failed to offer a substantive response” to a complaint filed to the WTO on October 30. (South China Morning Post)
Chinese President Xi Jinping called for greater global efforts in the fight against an unprecedented public health crisis and a renewed commitment to multilateral cooperation at the World Economic Forum’s virtual event. (World Economic Forum)
Female physicians and those specializing in critical care and infectious diseases reported the highest rates of burnout during the pandemic. While the rate of physicians reporting burnout overall held steady from 2019 to 2020 at 42%, it rose from 48% to 51% for women, and remained unchanged at 36% for men. Critical care, rheumatology and infectious disease specialists ranked among the highest reporting burnout for the first time since the survey started in 2013. In 2019, urology, neurology and nephrology specialists ranked the highest. (Healthcare Dive)
Earth’s ice is melting faster today than in the mid-1990s, as climate change nudges global temperatures ever higher. Annually, the melt rate is now about 57 percent faster than it was three decades ago. (Reuters, The Cryosphere)
Economy
The end of 2020 brought the sharpest rise in the U.S. poverty rate since the 1960s.
Economists Bruce Meyer, from the University of Chicago, and James Sullivan of the University of Notre Dame found that the poverty rate increased by 2.4 percentage points during the latter half of 2020 as the U.S. continued to suffer the economic impacts from Covid-19. That percentage-point rise is nearly double the largest annual increase in poverty since the 1960s. This means an additional 8 million people nationwide are now considered poor. Moreover, the poverty rate for Black Americans is estimated to have jumped by 5.4 percentage points, or by 2.4 million individuals. (Bloomberg)
U.S. credit card delinquencies reached record-low levels in 2020, as Americans took advantage of stimulus checks and adjusted their spending habits. Delinquencies on bank-issued cards stood at 1.53% in 3Q20, virtually unchanged from the previous quarter, after rising to 2.62% at the onset of the pandemic. (Bloomberg)
Some 2.7 million homeowners are still pausing their monthly mortgage bills, and more might need help in the coming months. (Wall Street Journal)
How WallStreetBets Pushed GameStop Shares to the Moon: Tens of thousands of average Joe day-traders whose fervor for a left-for-dead retailer has become a self-fulfilling prophecy in its 245% rally this year. GameStop has become a money geyser for the options-obsessed crowd that gathers in Reddit’s WallStreetBets forum. For those wagering on a decline, it’s been a catastrophe. In their frenzy, WSB’s cocky hordes have managed to turn the tables in a game short sellers invented, spinning gold from the complacency of others. Before this year, GameStop was a cash register for bearish traders, who borrowed and sold more shares than the company issued. Hedge funds had been winning so long that they overlooked the tinderbox they were creating should sentiment turn. Now it has, violently. GameStop, which isn’t expected to turn a profit before 2023, has seen its market value triple to $4.5 billion in three weeks, burning the skeptics whose any attempt to cover is likely to further propel its ascent. (Bloomberg, WallStreetBets)
Mass transit may never be the same, due to the vast changes the outbreak is triggering in the way Americans live and work. Transit ridership had been falling for years, and it's likely that the virus will only accelerate some of the trends behind that decline. Those include hastening the migration of jobs and people away from dense cities, where transit works best, as well as a newfound enthusiasm for letting employees work from home. Transit leaders are exploring ways to reshape their systems, as the ongoing shock to the system could wipe out the main justifications for transit's existence — rush hour congestion and pricey downtown parking — even after ridership on buses, subways and commuter trains rises from its current abyss. (Ridership was down 62% from pre-pandemic levels as of 3Q20). (Politico)
A new MIT study uncovers the kinds of infrastructure improvements that would make the biggest difference in increasing the number of electric cars on the road. The researchers found that installing charging stations on residential streets, rather than just in central locations such as shopping malls, could have an outsized benefit. They also found that adding on high-speed charging stations along highways and making supplementary vehicles more easily available to people who need to travel beyond the single-charge range of their electric vehicles could greatly increase the vehicle electrification potential. (MIT News, Nature Energy)
For the first time since 1983, when Anheuser-Busch used all of its ad time to introduce a beer called Bud Light, the beer giant is joining the Coke and Pepsi brands and isn't advertising its iconic Budweiser brand during the Super Bowl. Instead, it’s donating the money it would have spent on the ad to coronavirus vaccination awareness efforts. Anheuser-Busch still has four minutes of advertising during the game for its other brands. (Associated Press)
At least five companies announced plans to go public via reverse mergers with SPACs yesterday. More SPAC merger announcements are anticipated shortly, including deals in the EV, ed-tech and aerospace sectors. (Axios)
The SPAC boom could finally provide an exit ramp for digital publishers like Buzzfeed and Vice Media. (CNBC)
SPACS explainer: ‘Blank check’ firms known as SPACs are in pursuit of America’s hottest startups. Is the invasion a sign of a market euphoria that can’t last? These deals are generating a lot of interest because they produce big paydays for their creators, make it easier for startups in hot industries such as electric vehicles to capitalize on a frothy run-up in the stock market and offer everyday investors a new path to a hot stock. When a SPAC buys a firm, it merges with it in a sort of accelerated IPO process—a so-called “reverse merger”—while bypassing the normal scrutiny an IPO receives. But even some of the people getting rich off the blank-check boom caution that the euphoria could be part of a bubble that overvalues nascent companies. If it bursts, it could leave a few insiders as winners while saddling individual investors who got in late with big losses. (Wall Street Journal)
Technology
Twitter unveiled a feature meant to bolster its efforts to combat misinformation and disinformation by tapping users in a fashion similar to Wikipedia to flag potentially misleading tweets. The new system allows users to discuss and provide context to tweets they believe are misleading or false. The project, titled Birdwatch, is a standalone section of Twitter that will at first only be available to a small set of users, largely on a first-come, first-served basis. Priority will not be provided to high-profile people or traditional fact-checkers, but users will have to use an account tied to a real phone number and email address. (NBC News)
The US IPO market is expected to remain active this week with eight IPOs slated to raise $4.6 billion. The diverse group features three billion-dollar deals, with issuers from diagnostics, software, solar equipment, and more. Meanwhile, Kuaishou Technology is eyeing the world’s biggest IPO in more than a year, seeking to raise about $5 billion from a Hong Kong share sale as short-video and live-streaming apps surge in popularity in China. Kuaishou — which competes with ByteDance and started taking orders yesterday — could gain a value of more than $60 billion. (Renaissance Capital, Wall Street Journal)
Google is pushing forward with its plan to remove a widely used tracking technology from its Chrome web browser, despite complaints from rivals that rely on it to target ads at individuals. Google said it is making progress on what it said are privacy-friendly alternatives that could replace third-party cookies, which many advertisers and other companies use to track individuals’ browsing habits across multiple websites. (Wall Street Journal)
Amazon is expanding its secretive trucking program: In a little over a year, more than 130 small trucking companies around the globe have agreed to transport freight exclusively for Amazon. Those companies have leased over 1,100 Amazon-branded tractors, the cab units at the front of semitrucks. In comparison, Walmart has roughly 7,400 Walmart-branded tractors on the roads in the U.S. currently — but the retailer has spent decades building its fleet to that size. (The Information)
Amazon is asking the National Labor Relations Board to consider having workers vote in person — rather than by mail — on a proposal to form a union at an Alabama warehouse. Under the current plan, workers will have most of the next two months to vote by mail. (Bloomberg)
How will Clubhouse uses the money raised in its new round of funding led by A16z? "Creators are the lifeblood of Clubhouse," the team wrote, and it's looking into features like tickets and subscriptions to help those users make money. Also, here come the algorithms: "With this new round of funding we'll be investing heavily in discovery so that we can show you people, clubs, and rooms that are perfectly tailored to your interests — and help you discover new rooms you never would have thought to look for," the team wrote. Another priority: Servers. Axios says: This is a very high-risk/high-reward bet. The risk is that the audio boom is being artificially inflated by the stay-at-home pandemic, and that Andreessen Horowitz's confidence is colored by some of its partners' own addictions to using Clubhouse. The reward is that this is the next evolution of social networking, and that Andreessen Horowitz just preempted other investors like Sequoia Capital once did with WhatsApp. (Source Code, Axios)
The chipmaking industry is being redesigned, and the effects will be far-reaching. It is filled with exceptional innovation, but simultaneously sees production dominated by just three companies. (Economist)
Smart Links
Going digital quickly is a priority for private equity. (Financial Times)
Apple has a new head of hardware engineering in latest executive shuffle. (The Verge)
Intel reveals ‘hacked’ earnings release was on guessable URL. (Financial Times)
Warren Buffett’s investments in Japan struggle to keep up with the market. (Wall Street Journal)
Disneyland to update Jungle Cruise after racism complaints. (Los Angeles Times)
Highly efficient grid-scale electricity storage at fifth of cost. (Science Daily)
Learn More (Today, 9 a.m ET): The European Green Deal — Reform or Regulatory Tsunami? Professor Ottmar Edenhofer, Director, Potsdam Institute for Climate Impact Research. (Harvard Belfer Center)