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The World
Western intelligence shows Russia is amassing aircraft close to the border with Ukraine, an indication that Moscow is preparing to throw its jets and helicopters into the war to support a stuttering land offensive. The fear of a looming air war in Ukraine has prompted allies to prioritize rapid shipments of air defense assets and artillery ammunition to Kyiv, western officials said, to respond to the shift in approach by Moscow as the almost year-long war enters a new phase. Intelligence shared among Nato allies shows Russia is amassing fixed-wing and rotary aircraft close to the border with Ukraine, according to two officials briefed on its contents. (Financial Times)
U.S.-backed report says Russia held at least 6,000 Ukrainian children for 're-education': Russia has held at least 6,000 Ukrainian children - likely many more - in sites in Russian-held Crimea and Russia whose primary purpose appears to be political re-education, according to a U.S.-backed report published on Tuesday. The report said Yale University researchers had identified at least 43 camps and other facilities where Ukrainian children have been held that were part of a "large-scale systematic network" operated by Moscow since its February 2022 invasion of Ukraine. (Reuters)
Read the Yale report.
NATO boss: It’s more important that Sweden, Finland join soon than together. (Reuters)
The U.S. military said it intercepted four Russian warplanes near Alaska on Monday. North American Aerospace Defense Command (NORAD) said it detected four Russian aircraft, including TU-95 BEAR-H bombers and SU-35 fighter aircraft, entering and operating within the Alaska Air Defense Identification Zone (ADIZ), according to a Tuesday statement from the command. (The Hill)
The International Monetary Fund has started negotiating with Ukrainian officials to put together what could be its largest loan package for the country since Russia’s invasion as the prolonged war deepens its economic woes. The Ukrainian government is seeking a loan that is far larger than the $2.7 billion the multilateral lender has provided through two emergency loans since last March, according to people familiar with the situation. Ukraine has argued that IMF involvement is crucial to reassure other foreign backers that its economic policies and its financial data are sound. (Wall Street Journal)
Former Brazilian President Jair Bolsonaro said he plans to return to Brazil in March to lead the political opposition to leftist President Luiz Inácio Lula da Silva and defend himself against accusations he incited attacks by protesters on government buildings last month. “The right-wing movement is not dead and will live on,” Mr. Bolsonaro said in his first interview since leaving Brazil for Florida late last year after a narrow election loss to Mr. da Silva. He said he would work with backers in Congress and state governments to push what he called pro-business policies and to fight abortion, gun control and other policies he says run counter to family values. (Wall Street Journal)
Canada Clamps Down on Military Research as China Concerns Grow: Canadian Prime Minister Justin Trudeau’s government will stop funding projects affiliated with universities, institutes or labs connected to foreign military, national defense or state security entities. Tuesday’s announcement seeks to close the loop on so-called sensitive research areas that pose risks to national security. (Bloomberg)
As Japan and Philippines seek closer defense ties, could trilateral pact with US be next? Manila and Tokyo have signed a proposed agreement to cooperate on disaster relief, a measure widely seen as a step towards a defense pact. The Philippines is a ‘perfect ally’ for Japan as it plays an important geopolitical role in the South China Sea, analysts said. (South China Morning Post)
American oil major Chevron has agreed to sell its stake in Myanmar's Yadana offshore natural gas field project to a Canadian company, sealing a long-planned withdrawal after criticism of facilitating human rights abuses by the military government. "Throughout this sale process we will continue to meet our commitments to protect our employees [and] manage an orderly and safe transition," a company spokesperson said. (Nikkei Asia)
Economy
Inflation eased slightly at the start of 2023, advancing 6.4% in January from a year earlier, as consumer prices increased for energy, housing, food and many other items. The increase in the consumer-price index, edged down from 6.5% in December. That marked the seventh straight month of easing inflation since peaking at 9.1% in June, the highest reading since 1981. But the cooling trend is moderating. On a monthly basis, CPI rose 0.5% in January from December, compared with a previous 0.1% increase. The inflation report is likely to keep Fed officials on track to raise interest rates at their meeting in March and to signal further increases will be likely after that. (Wall Street Journal)
President Biden is remaking his economic team as his administration seeks to tamp down inflation, choosing officials who signal stability and continuity on the policy front ahead of his expected re-election campaign. Mr. Biden named Federal Reserve Vice Chair Lael Brainard to serve as the director of the National Economic Council, turning to a veteran economic policy maker as the administration is preparing for contentious talks with Republicans over raising the federal debt ceiling, and as the U.S. economy has sought to emerge from high inflation, rising interest rates and slowing growth. (Wall Street Journal)
El-Erian, Rogoff Say It’s Too Late to Fix Too-Low Inflation Target: They both see higher US interest rates for some time to come. ‘Higher real rates mean lower asset prices,’ says Rogoff.
Top US bank executives more upbeat about ‘soft landing’ for economy: Executives at some of Wall Street’s biggest banks said the US economy was holding up better than corporate leaders had anticipated and that the mood was more optimistic than it was a few months ago. The comments from top brass at Goldman Sachs, Bank of America and Wells Fargo reflect the growing belief that the Federal Reserve may achieve a so-called “soft landing” for the US economy in its battle to tame inflation while avoiding a recession. (Financial Times)
Nearly three-quarters of London’s workers would rather quit their jobs than return to the office full-time, a survey revealed, with many demanding inflation-busting pay hikes to give up their right to flexible working. The research by Bloomberg Intelligence found that employees in the capital are confident in their bargaining power amid a tight labor market and widespread working-from-home following the pandemic. (Bloomberg)
Turning offices into condos: New York after the pandemic: A growing roster of the city’s towers are being rendered obsolete by remote working. Developers spot a chance to meet demand for homes. (Financial Times)
Airbnb earnings surge as foreign travel rebounds: The number of tourists seeking a foreign city break is rising, said Airbnb, which has recorded its first full year of profitability thanks to higher prices and a global travel rebound. Cross-border trips in the 4Q22 were up 49% year on year, the company said, with stays in “high-density urban areas” up 22% versus the same period in 2021. (Financial Times)
TripAdvisor reports bumper revenues on strong tour bookings. (Financial Times)
New Cars Are Only for the Rich Now as Automakers Rake In Profits. With pandemic-era chip shortages fading, manufacturers are keeping inventories low — and prices high. The shift to EVs will make things worse. (Bloomberg)
Technology
Senators from both parties blasted Big Tech and called for the passage of federal legislation to regulate tech platforms in the midst of a mental health crisis among young Americans. Opening a hearing of the Senate Judiciary Committee, Sen Dick Durbin, the panel’s chair, accused tech companies including Facebook and Snapchat of “doing everything they can to keep our kids eyes glued to the screens.” Tuesday’s hearing, which featured testimony from civil society groups and mental health advocates, did not involve witnesses from the tech industry. But Durbin hinted at a possible future hearing involving Big Tech representatives, saying “don’t worry, they’ll have their chance” as the committee invites them to weigh in on legislative proposals. (CNN)
Why you shouldn’t trust AI search engines: Last week was the week chatbot-powered search engines were supposed to arrive. The idea is for AI bots to generate chatty answers to our questions, instead of just returning lists of links. But things… are not going according to plan. Straight after Microsoft let people poke around with its new ChatGPT-powered Bing search engine, people found that it responded to some questions with incorrect answers. Google had an embarrassing moment when scientists spotted a factual error in its own advertisement for its chatbot Bard, which wiped $100 billion off its share price. The problem is that AI language models are simply not ready to be used like this at this scale. They have no knowledge of what the sentences they spew actually mean—making it incredibly dangerous to combine them with search. (MIT Technology Review)
Vice Media has secured more than $30 million in debt financing from Fortress Investment Group, as the new-media company faces a financial crunch. Vice, which is trying to sell itself, owes millions of dollars to vendors and advisers, some of whom haven’t been paid for more than six months, according to people familiar with the matter. Some vendors have resorted to collections agencies to retrieve payments, some of the people said. (Wall Street Journal)
Social media company Reddit is far from profitability but has its sights set on finally going public later this year—likely in the second half, people familiar with the matter said. Reddit and other firms including Instacart are keeping their initial public offering paperwork up to date, priming them for potential debuts when market conditions improve. But other IPO contenders—including software firm ServiceTitan, e-commerce startup StockX and data security company Cohesity—have stopped updating their filings, people familiar with the matter said, essentially putting their plans on the shelf for now. Payments giant Stripe, which said last month it would either go public or raise money privately within a year, is taking the latter path. (The Information)
Sandbox AQ, a startup spun off from Alphabet Inc last year, said it raised $500 million as it helps customers prepare for a quantum computing future. Former Google Chief Executive Eric Schmidt is the startup's chairman as well as an investor. Other investors include Breyer Capital, T. Rowe Price funds and Salesforce.com Inc founder Marc Benioff's TIME Ventures. (Reuters)
Smart Links
Live Event, Today 12:30 pm ET: An Assessment of Russia’s 2022 Invasion of Ukraine: One Year On. (Harvard Kennedy School)
America's Priciest Neighborhoods Are Changing as the Ultra-Rich Move to Florida. (Bloomberg)
TikTok’s Talks With U.S. Have an Unofficial Player: China (Wall Street Journal)
Neiman Marcus to lay off about 5% of workforce. (Reuters)
Louis Vuitton taps Pharrell Williams as next men’s creative director. (Washington Post)