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The World
The US is concerned China’s runaway Covid-19 outbreak might spawn new mutations of the virus, as the world’s most populous country continues to grapple with the impact of loosening “Covid Zero” protocols that had kept the pandemic at bay. (Bloomberg)
EU energy ministers have reached an agreement to cap gas prices in the bloc when they hit €180 per megawatt hour for three days despite fears that such an intervention will fail to calm markets and could threaten Europe’s gas supplies. The cap, which should come into force on February 15, is the latest attempt to curb soaring energy prices in the bloc and help consumers after Russia reduced much of its gas exports to Europe. (Financial Times)
The prospect of growing military threats from both China and Russia is driving bipartisan support for a surge in Pentagon spending, setting up another potential boom for weapons makers that is likely to extend beyond the war in Ukraine. Congress is on track in the coming week to give final approval to a national military budget for the current fiscal year that is expected to reach approximately $858 billion — or $45 billion above what President Biden had requested. If approved at this level, the Pentagon budget will have grown at 4.3 percent per year over the last two years — even after inflation — compared with an average of less than 1 percent a year in real dollars between 2015 and 2021. (New York Times)
Fresh clashes in a culturally and strategically important area in the Himalayas between the world’s two largest militaries are triggering questions about India’s capacity to confront China. Now, the latest clashes have rung three alarms. First, the front has shifted to the east, near Tibet, which means that the tensions are spreading. Second, India hasn’t matched China’s massive buildup of military and civilian infrastructure in the remote area, which means it has to play catch-up. Third, and most importantly, none of India’s moves to counter China since 2020 — to punish Beijing economically by banning certain imports and apps, to align its diplomacy with the Western-led anti-China bloc, or balancing with China’s friend Russia – have worked. (GZERO Media)
U.S. Scores $4 Billion Windfall on Oil-Reserve Sales: Washington emerges as unlikely winner after releases from Strategic Petroleum Reserve. (Wall Street Journal)
Texas Medical Association heads to court again in second challenge to surprise billing ban: The association is challenging the implementation of the surprise billing ban, arguing it unfairly benefits insurers. The group will argue before the same judge who previously sided with the association in a separate but similar case. (Healthcare Dive)
Early flu season in U.S. may be peaking early, too. This year’s abnormally early flu season is showing signs it may be peaking in parts of the country, CDC data suggested. The percentage of outpatient visits to health care providers that were for respiratory illnesses declined for a second week in a row, CDC’s weekly influenza report, FluView, showed. And the number of people hospitalized for influenza declined in the week ending Dec. 10, as compared to the previous week. (STAT News)
Pharmacy chains CVS Health and Walgreens limited purchase of children's pain drugs as they face supply constraints and high demand with the U.S. experiencing one of the worst flu season in a decade. (Reuters)
Economy
Wall Street closed lower for a fourth straight session with Nasdaq leading declines as investors shied away from riskier bets, worried the Fed’s tightening campaign could push the U.S. economy into a recession. The three major U.S. stock indexes have been under pressure since Wednesday, when Fed Chair Jerome Powell took a hawkish tone while the central bank raised interest rates. (Reuters)
There were 374 worker strikes started in 2022 — a 39% increase over 2021, according to a database run by Cornell. Fueled partly by anger over working conditions in the pandemic and spurred on by other labor wins, all sorts of workers — warehouse employees, teachers, nurses, graduate students, journalists — walked off the job. Many others voted to unionize — including at more than 260 Starbucks stores in the past year — demanding better pay and working conditions. The low unemployment rate and worker shortage gave workers more leverage. "But that's not the whole story," said Johnnie Kallas, project director of Cornell-ILR Labor Action Tracker. Many workers' concerns centered around health and safety and understaffing — a major point of contention for nurses who walked out in 2022, he said. (Axios Markets)
Strikes galore in the UK: So much for keeping calm and carrying on ... Hundreds of thousands of transport providers, ambulance operators, immigration officials, postal workers, and even Britain’s revered nurses are striking at different dates across the country this holiday season. But the British government has refused to blink, despite there being a strike every day in December — from teachers to civil servants to solicitors. Indeed, PM Rishi Sunak remains dug in. (GZERO Media)
UK manufacturing output is falling at its fastest pace since the start of the pandemic. The fall was mainly driven by a decline in production of food, drink, tobacco, paper and the mechanical engineering sectors. (The Times)
Binance says Deloitte, E&Y, KPMG, and PwC are “currently unwilling” to conduct audits on private crypto companies, after Mazars stopped providing such audits. (Blockworks)
For the first time, women in Asia now hold more combined wealth than any other region except North America, and the total is growing faster than anywhere else. Women in Asia (ex-Japan) will hold $27tn in wealth by 2026, $6tn more than women in western Europe, according to analysis done by Boston Consulting Group for Nikkei Asia. It found that women’s combined wealth in Asia overtook that of western Europe at the end of 2021. (Nikkei Asia Review)
Technology
The Backstory of ChatGPT Creator OpenAI: ChatGPT, the artificial-intelligence program captivating Silicon Valley with its sophisticated prose, had its origin three years ago, when technology investor Sam Altman became chief executive of the chatbot’s developer, OpenAI. Mr. Altman decided at that time to move the OpenAI research lab away from its nonprofit roots and turn to a new strategy, as it raced to build software that could fully mirror the intelligence and capabilities of humans—what AI researchers call “artificial general intelligence.” Mr. Altman, who had built a name as president of famed startup accelerator Y Combinator, would oversee the creation of a new for-profit arm, believing OpenAI needed to become an aggressive fundraiser. Shortly after he became CEO, Mr. Altman received $1 billion in funding after flying to Seattle to demonstrate an artificial intelligence model to Microsoft CEO Satya Nadella. (Wall Street Journal)
Epic Games agreed to pay $520 million to resolve FTC allegations that the “Fortnite” videogame developer violated online privacy protections for children and tricked players into making unintended purchases. The FTC said the agreement consisted of two record-breaking settlements that resolve a pair of civil complaints it was filing against Epic. One, filed in federal court, alleged the company violated the federal Children’s Online Privacy Protection Act by collecting personal information from “Fortnite” players under the age of 13 without notifying their parents or obtaining verifiable parental consent. That lawsuit also accused the company of illegally enabling real-time voice and text chat communications for children and teens in the game by default. Further, the FTC said Epic put those users at risk by connecting them with strangers. (Wall Street Journal)
Meta will continue to devote about 20% of its overall costs and expenses to Reality Labs in 2023, despite questions about the business division focused on augmented and virtual reality and the so-called metaverse. The projection is little changed from the 18% of spending Meta devoted to Reality Labs in 3Q. That means the bulk of the company’s investments will continue to go toward what Meta calls its “family of apps” - Facebook, Instagram, WhatsApp, and Messenger. (Bloomberg)
Louisiana and West Virginia became the latest to ban the use of the popular social media service TikTok on government-managed devices over concern that China could use it to track Americans and censor content. Some 19 of the 50 U.S. states have now at least partially blocked access on government computers to TikTok. Most of the restrictions came within the past two weeks. (Reuters)
Smart Links
India overtakes China in M&A fees for western banks for first time. (Financial Times)
Christie’s Sold Record $8.4 Billion in Art in 2022. (Wall Street Journal)
After Tuition, Books, and Room and Board, Colleges’ Rising Health Fees Hit a Nerve. (Kaiser Health News)
Electric vehicle production set to surge in 2023 despite low sales. (Reuters)