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The World
The tone of the Ukraine crisis shifted as Russia’s top diplomat endorsed more talks to resolve its standoff with the West, and Ukrainian officials hinted at offering concessions to avert war. Still, U.S. officials said that Russian forces near Ukraine had grown to 105 battalion tactical groups, up from 83 groups earlier this month. Russia has also moved about 500 combat aircraft within range of Ukraine and has 40 combat ships in the Black Sea, said U.S. officials familiar with intelligence reports. However, in a carefully choreographed scene broadcast on Russian television, Foreign Minister Sergei Lavrov told President Vladimir Putin that the West was ignoring the Kremlin’s core security demands, but that Moscow should continue negotiations. “I believe that our possibilities are far from exhausted,” Lavrov said, referring to Russia’s negotiations with the West. “I would propose continuing and intensifying them.” Putin responded ambiguously: “Good.” (New York Times, Wall Street Journal)
German Chancellor Olaf Scholz stressed German support for Ukraine after meeting for several hours with the country's President Vodolymyr Zelenskyy in Kyiv. "Germany stands close by your side," Scholz said. Scholz has held firm on Germany's opposition to sending lethal weaponry to Ukraine amid a massive Russian troop buildup. Scholz also announced new loan of €150 million ($170 million) to Kyiv. Today Scholz is heading to Moscow for talks with Putin. (Deutsche Welle)
Diplomacy with Russia can still save Ukraine, insists UK Prime Minister Boris Johnson. Meanwhile, Canada will send lethal weapons, $500-million loan to Ukraine as it girds for possible war. (The Times, Globe and Mail)
US closing embassy in Kyiv and moving remaining diplomats to western Ukraine amid fears of Russian invasion. (CNN)
The U.S. issued a blanket warning on potential of destructive Russian hacks. The defense agency said it was not responding to any specific threats but acting as a general precaution that conflict with Russia could lead to cyberattacks. Meanwhile, students, academics and electronics hobbyists are using homemade drones and motion-sensing cameras to patrol the Ukrainian border for signs of Russian military build-up and aggression. They say they have also struck at Russian targets with adapted Soviet missiles. The intelligence this group gathers is fed into a custom software package that it helped develop for the country’s military. (NBC News, New Scientist)
Prime Minister Justin Trudeau became the first Canadian leader to invoke the federal Emergencies Act, to try to bring an end to the ongoing trucker convoy protests paralyzing Ottawa and border blockades. Once a declaration of a public order emergency is issued, it is considered in effect, and unless the declaration is revoked by Parliament or extended, it will expire after 30 days. (CTV News)
Looking to Latin America, China is building a $8 billion nuclear power plant in Argentina. Located near Lima, the Atucha III plant will use China’s proprietary Hualong One design. There has been opposition raised in both American concerns about ties with Beijng and from environmentalists. It will be Argentina’s fourth nuclear facility and will have an initial life of 60 years. (South China Morning Post)
French spirits maker Pernod Ricard has asked top executives from its Hong Kong office to relocate temporarily outside the city as Beijing prepares to play a greater role in the Asian financial hub’s response to its Omicron coronavirus wave. Pernod Ricard’s move comes as global businesses review the operational risk of staying in Hong Kong, with the city increasingly shut off from the outside world to battle a surge in cases. The company’s senior staff based in Hong Kong have been asked by management to work elsewhere in order to continue to serve the Asian markets they operate in and be able to visit its Paris headquarters. (Financial Times)
New Zealand’s prime minister warned that the country is entering a new phase of its pandemic response that is “like nothing we’ve experienced to date”, as case numbers begin to explode. Virus-free for much of the pandemic, New Zealand is now reporting near-daily record case numbers. (The Guardian)
California school mask mandate will remain in place through Feb. 28. (Los Angeles Times)
The drought in the western U.S. could last until 2030: After a brutally hot and dry 2021, the region is now in the worst "megadrought" in 1,200 years. Climate change is to blame. A new study in Nature Climate Change shows that Earth’s warming climate has made the western drought about 40 percent more severe, making it the region’s driest stretch since A.D. 800. (National Geographic, Nature)
Economy
People are going out again, but not to the office: Only a third of U.S. employees have returned to the office, as workers prefer remote and companies fear ordering them back. An average of 33% of the workforce returned to the office during the first week of February in the 10 major cities monitored by Kastle Systems, which records building-access-card swipes. Meanwhile, the return rate to movie theaters in the first week of February was 58% of what it was before the pandemic, according to a Kastle analysis of industry statistics. Restaurants were nearly three-quarters as full as they were before Covid-19, and air travel had recovered to about 80%. Attendance at National Basketball Association games was 93% of what it was in February 2020, Kastle said. “There’s a huge divergence between the ways that people are coming together in the other parts of their lives and the way they aren’t in the office,” said Mark Ein, Kastle Systems chairman. (Wall Street Journal)
Microsoft will fully reopen its offices on Feb. 28. And a month later, those employees who’ve elected to work more than half the time in the office will be expected to show up. The 30-day interim period is designed to give people a chance to prepare for the office return by doing things such as finding walkers for their dogs. Other tech companies are sure to follow Microsoft’s decision with similar moves. And that in turn will trigger hand-wringing by advocates of remote work. Many people have become used to working from home during the past two years and don’t want to give up the flexibility. (The Information, Microsoft blog)
UK petrol prices have hit record highs, putting further strain on families as the cost-of-living crisis worsens. The average cost of petrol rose to 148.02p a litre on Sunday, surpassing the previous high of 147.72p last November. Motorists face paying £81.41 to fill a 55-litre petrol car, compared with £66 a year ago. (The Times)
Nearly $5 a gallon: Record gas prices in Los Angeles, Orange counties. (Los Angeles Times)
Bond markets are signaling increasing concern that the US central bank will derail the recovery from the pandemic by overreacting to severe inflation that is sweeping across the world’s biggest economy. Short-term US government bonds have declined sharply this year, in a sell-off that gained momentum after the release of data last week showing consumer prices surged in January at the swiftest clip in four decades. The price fall has sent the yield on two-year Treasury notes, which are highly sensitive to monetary policy expectations, soaring to 1.6% on Monday from 0.5% three months ago. (Financial Times)
U.S. banking regulators warn of risks in leveraged loan market: The Federal Reserve Board, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency flagged mounting vulnerabilities across a number of sectors hardest hit by the coronavirus pandemic, including commercial real estate. Most of the riskiest loans, they warn, are held by non-bank financial entities. (Financial Times)
Amidst controversy over Spotify, Amazon could be a player to watch in the wars over the $36 billion audio ad industry. Stock in Audioboom, a London-based podcasting group, surged as both Amazon and Spotify are reportedly considering takeover bids. (The Street)
Crypto apps soar in popularity after Super Bowl splurge. Data tracked by The Block Research shows that Coinbase's app surged from 186th place to second on the App Store. (The Block)
Metaverse ETFs are popping up in South Korea and retail investors are piling in. (CNBC)
Technology
Intel is nearing a roughly $6 billion deal to buy Israel’s Tower Semiconductor, as the U.S. semiconductor giant continues ambitious push to expand its manufacturing operations. Tower is similar to GlobalFoundries Inc., a much larger manufacturer that Intel explored a deal for over the summer. Intel in January said it plans to invest at least $20 billion in new chip-making capacity in Ohio, bolstering the company’s production ambitions as greater demand for digital products and a global chip shortage have amplified the need for more semiconductor manufacturing. (Wall Street Journal)
Peloton’s new chief executive dismissed the idea that the home fitness group could be put up for sale, pledging instead to pursue growth by doubling down on content, expanding to new countries and increasing its product portfolio. Barry McCarthy, the former finance chief of Netflix and Spotify who was appointed Peloton’s chief executive last week, told the Financial Times that he was moving from California to New York to seize a long-term growth opportunity, not to oversee a sale. (Financial Times)
Peloton’s supply-chain and business chiefs exit in shake-up: A sweeping overhaul brought new management and layoffs to the fitness company. (Bloomberg)
Texas Attorney General Ken Paxton filed a lawsuit against Meta, alleging the Facebook parent illegally collected biometric data on users without their consent. The suit makes claims similar to those made in a class action case Facebook settled for $650 million last year. That case alleged Facebook violated Illinois’ Biometric Information Privacy Act by storing data about people’s faces without their consent for its photo-tag suggestion tool. (CNBC)
VCs back a new generation of dating apps: A decade after apps like Tinder and Hinge ushered in the popularity of mobile-first online dating, venture investors are now starting to back a new crop of startups that aim to help people find romantic connections in new mediums—from audio-based platforms to meme-based datings apps. (Crunchbase)
Japan is home to the world’s first autonomous container ships. The first test of their autonomous container ship Mikage, a 313-foot (95 m) vessel owned by Mitsui Lines, occurred between Jan. 24-25 along coastal waters. The unmanned ship departed Tsuruga Port on the Sea of Japan and traveled 161 nautical miles to Sakai Port near Osaka, using a system of radar and lidar sensors, cameras, and a satellite compass to navigate. The Mikage even pulled itself into a berth at the end of its journey, using flying drones to drop ropes down to dock workers waiting below to secure the ship. (Quartz)
Smart Links
Warren Buffett bought $1bn stake in Activision weeks before Microsoft deal. (Financial Times)
68% of investment execs think clients shouldn’t own cryptocurrency. (CNBC)
16% of men invest in the $1.7 trillion crypto market, compared to 7% of women. (Broadsheet)
UC Berkeley may be forced by court to cut 3,000 undergraduate seats, freeze enrollment. (Los Angeles Times)
HSBC trims private bank staff and reduces office space in Switzerland. (Financial Times)
Here’s how much money athletes at the Beijing Olympics earn for winning medals. (CNBC)