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The World
The Fed set the stage for a series of interest rate increases beginning next spring — likely three in 2022 — completing a major policy pivot that showed much greater concern about the potential for inflation to stay high. For months, Fed leaders had stuck to a view that higher price pressures this year were caused primarily by supply-chain bottlenecks and would ease on their own. But Chairman Jerome Powell had in recent weeks signaled much less conviction about that forecast, and the projections Wednesday suggest most of his colleagues share his concern. (Wall Street Journal)
Why Jerome Powell pivoted on inflation: A surge in wages and benefits got his attention. Other data soon confirmed his concern. (The Upshot)
Putin and Xi discuss closer co-operation amid worsening relations with the west: Russian President Putin sought to present a united front with Xi Jinping as the Kremlin said the Chinese leader supported Moscow’s demand for security guarantees that would limit western influence in its backyard. Putin told his “dear friend” Xi that “a new model of co-operation between our countries has formed on principles such as non-interference in internal affairs and respecting each other’s interests”. Xi, who called Putin an “old friend”, told him that he “highly appreciated” Russia’s “strong support of China’s efforts to protect its key international interests. (Financial Times)
Xi Jinping’s leadership style: Micromanagement that leaves underlings scrambling: Xi is a micromanager who intervenes often, unpredictably and sometimes vaguely in policy matters big and small. People inside the government say that sows confusion among bureaucrats, stifles policy debate and sometimes leads to policies that aren’t carefully thought-out. Some bureaucrats, unsure how far to push Mr. Xi’s priorities, err on the side of aggressive interpretation, and this sometimes means reversing policies later. “When loyalty is the critical measure for officials, no one dares to say anything, even if the instructions from the great leader are vague and confusing about what to do,” one official said. Publicly, Chinese officials credit Mr. Xi with providing decisive leadership as he cracks down on technology, real estate and other industries to rein in what he sees as excesses of Western-style capitalism. Behind the scenes, many officials question some of Mr. Xi’s decisions. (Wall Street Journal)
The Biden administration plans to ban American investment in the world’s largest drone-maker and seven other Chinese companies for what the U.S. says are their roles in China’s mass surveillance of Muslim ethnic groups. The Treasury Department is set to announce the blacklisting of the eight firms today, adding them to a list of companies that support China’s military. (Wall Street Journal)
A sharp rise in Covid-19 cases on several campuses is prompting some colleges and universities to reinstate remote learning and require booster shots, upending the last days of the fall term and casting doubt over whether schools will remain in-person heading into next year. Princeton, Cornell, Middlebury and some others shifted to remote exams, while still others, such as Tulane, gave students the option of finishing the semester online. George Washington University announced that all in-person social gatherings and events were canceled effective immediately, and remaining exams for the semester would be held online starting Friday. UCLA’s game against Alabama State canceled because of COVID-19 protocols. (Wall Street Journal, Washington Post, Los Angeles Times)
Apple closes three more retail stores as infections rise. (The Verge)
England’s chief medical officer urged people to scale back their Christmas plans as he warned that a big rise in hospital admissions from Omicron was “nailed on,” after Britain recorded its highest number of Covid cases in a single day. (The Times)
Record COVID surge forces South Korea to reverse reopening. Amid growing criticism before election, government renews social distancing rules. (Nikkei Asia Review)
Stanford Medicine researchers found that after the March 2020 COVID-19 shutdown, non-urgent surgery rates dropped, but within months they bounced back and remained at pre-pandemic levels, even as coronavirus infections peaked during the fall and winter of 2020. The study, published online Dec. 8 in JAMA Network Open, contradicts the assumption that the COVID-19 pandemic has continually curtailed nonessential surgeries across the country. “It’s an untold story,” said Sherry Wren, MD, professor of general surgery and senior author on the paper. “It’s the opposite of what all the headlines say.” (Stanford Medical School)
Bruce Springsteen has sold his music rights to Sony Music Entertainment in what may well be the biggest transaction ever struck for a single artist’s body of work. Its value may exceed $500 million. The arrangement, which has been gossiped about in music industry circles for weeks, includes both Springsteen’s recorded music catalog and his body of work as a songwriter. It will give Sony ownership of Springsteen’s complete collection of classic songs like “Born to Run,” “Born in the U.S.A.” and “Blinded by the Light.” (New York Times, Billboard)
Economy
Americans' impressions of the nation's economy remain gloomy and broad majorities think the federal government has done too little to try to solve problems with the nation's supply chain and rising inflation. 75% say they are worried about the state of the economy in their own community and 63% say the nation's economy is in poor shape. 57% say that the economic news they've heard lately has been mostly bad, with just 19% saying they are hearing mostly good news about the economy right now. Asked to rate the severity of seven issues affecting the economy recently, about 80% say the rising cost of food and other everyday items, the disruption in the nation's supply chain (79%), and the rising cost of housing (77%) are major problems for the nation's economy. (CNN Poll)
The vast majority of small-business owners say they finally see the light at the end of the Covid-19 tunnel, economically speaking. Other CEOs aren’t so sure. According to a new survey from the U.S. Chamber of Commerce Small Business Index and insurance giant MetLife, 77% of small-business owners say they’re optimistic about the future of their business, and 62% say their business is in good health. Nearly half say they plan to spend more money next year than they did this year. For many, that includes ramping up their hiring plans — even despite a nationwide labor shortage — alongside the official “end” of the pandemic, which medical experts expect sometime in 2022. (CNBC)
Investors' outlook for the U.S. investing climate has worsened in 2H21 as their levels of optimism about economic growth, unemployment and inflation all have dimmed. At the same time, their levels of optimism about the stock market and reaching their investing goals remain steady at fairly positive levels. The overall effect is a decline in the Gallup Investor Optimism Index from +39 in the prior survey (conducted in the second quarter) to +10 in the fourth. (Gallup)
Linklaters has become the latest corporate law firm to water down its traditional “lockstep” pay model for partners, adapting to fierce competition to attract and retain top talent by offering larger pay cheques to outstanding performers. In an email to staff, Aedamar Comiskey, senior partner, and Paul Lewis, managing partner, said the “magic circle” firm was modifying its pay structure globally to increase the amount it can offer “partners who make an exceptional contribution”. (Financial Times)
Katie Haun, one of the world's most influential crypto venture capitalists, is leaving Andreessen Horowitz to form her own firm. Haun has helped turn Andreessen Horowitz into the VC world's largest crypto investor, including a $2.2 billion fund raised earlier this year that's already been deployed. Her deals have included OpenSea, Celo, Arweave and Royal. She also led the firm's investment in Coinbase, where she serves as an independent director. Haun isn't saying too much about her new firm, except that she plans to be the only general partner and that it will focus on crypto and Web3 startups. (Axios)
Reddit confidentially files its S-1 with the SEC for an IPO; the number of shares to be offered and the price range have yet to be determined. (Reddit)
Japan's exports sped up in November, as supply constraints eased slightly for the country's big automakers, although imports hit a record on soaring materials costs, which could hurt household consumption. (Reuters)
Technology
Momentum appears to be building for federal regulations of social media in 2022, with the public supportive of efforts and lawmakers optimistic about progress. 56% of U.S. adults said they supported government regulation of social media companies – an uptick of 4 percentage points from an October survey. About 3 in 5 respondents said the platforms do not do enough to keep users safe. (Morning Consult)
Hackers linked to China and other governments are among a growing assortment of cyberattackers seeking to exploit a widespread and severe vulnerability in computer server software, according to cybersecurity firms and Microsoft. The involvement of hackers whom analysts have linked to nation-states underscored the increasing gravity of the flaw in Log4j software, a free bit of code that logs activity in computer networks and applications. Cybersecurity researchers say it is one of the most dire cybersecurity threats to emerge in years and could enable devastating attacks, including ransomware, in both the immediate and distant future. (Wall Street Journal)
A tech talent shortage looms behind many return-to-office delays: The stubborn persistence of the pandemic is prompting tech companies like Intuit, Stripe and Google to keep postponing their plans to return to the office. One reason some are treading so carefully: a fear of losing workers in a hypercompetitive job market. (The Information)
TikTok is testing TikTok Live Studio, a Windows app that lets users stream directly to TikTok Live from their computer. (TechCrunch)
Cost of advertising on big podcasts soars. (The Verge)
Smart Links
Intel thinks the metaverse will need a thousand-fold increase in computing capability. (The Verge)
Qantas to switch domestic fleet to Airbus in blow to Boeing. (Reuters)
Italian birth rates at lowest since 1861. (The Times)
Turkey's lira nears record low ahead of cenbank meetings. (Reuters)
Amazon says it will reduce its Alexa skills commission from 30% to 20% for developers who earn less than $1M per year, starting in 2Q22. (TechCruch)
Swimply, a marketplace for renting private swimming pools, raises $40M seven months after raising $10M. (TechCrunch)
Las Vegas to host Super Bowl in 2024. (ESPN)
Sports betting at Chicago stadiums gets the go-ahead. (Chicago Tribune)