To start off, we're looking into:
The planet is getting hotter
The backstory: The past year has been one for the history books, and unfortunately, not in a good way. Climate change brought about devastating effects around the globe in 2022, from heat waves across Europe, India, China and other regions to extreme rainfall resulting in devastating flooding in Pakistan. The melting of glaciers in the European Alps and the record-breaking melt of Greenland's ice sheet are just more examples of the consequences of human-induced climate change.
The development: According to a report from the EU's Copernicus Climate Change Service, 2022 was the fifth-warmest year on record. And it wasn't just hot last year; the last eight years have also been the warmest on record.
But it isn't all doom and gloom. Although there a major issues that we need to address as a planet, a recent report has shown that the use of things like chlorofluorocarbons, or CFCs, which have contributed to a hole in the ozone layer, has gone down. This means the ozone layer is on track to repair itself within decades. But scientists say we have to "stay vigilant" to ensure this stays on track.
Bankrupt BlockFi is paying an investor back
The backstory: Cryptocurrency lender BlockFi followed the collapse of crypto exchange giant FTX and filed for bankruptcy in November. It's not surprising that BlockFi had "significant exposure" to FTX and founder Sam Bankman-Fried's crypto empire. After a big crypto price drop last year, the company took a line of credit from FTX to get it out of shaky circumstances. So, after the meltdown of FTX, the blocks kept tumbling, meaning BlockFi was in trouble again since it was relying on FTX's support to stabilize itself.
The development: In a bold move to settle a threatened lawsuit, the company paid back a big sum of US$15 million to an investor to avoid being sued. The investor, named "Counterparty A," had bought some equity shares in BlockFi before the financial troubles. They threatened to sue, saying the company should have been more transparent about the contagion risks in the market.
How oil caps are affecting Russia
The backstory: Russia is a big oil exporter, and its oil sales have been an important source of funding for its "special military operation" in Ukraine. With that, toward the beginning of the Russia-Ukraine war last March, the EU planned an embargo on Russian oil, and the US followed with its own idea of capping prices on oil from the country as part of ongoing sanctions from the West.
More recently: The West started imposing oil sanctions on Russia late last year to weaken Russia's economy and military abilities in Ukraine. That cap is US$60 per barrel of seaborne crude.
The development: On Wednesday, Russia said it hasn't seen any cases of these price caps on Russian oil actually in practice. But, according to Finland's Centre for Research on Energy and Clean Air (CREA), the price cap is costing the Kremlin US$172 million every day. And, when refined products are added to the cap from February 5, that loss will rise to US$280 million a day.
To end, we'll look into:
Hong Kong’s crypto goals
The crypto market is kind of chaotic right now. But that hasn't stopped Hong Kong from having aims in the cryptosphere.
In late October, Hong Kong went public with its plan to become a major Asian crypto hub. The idea was to create a market with legal retail trading and digital-asset exchange-traded funds. It was working on creating some sort of virtual-asset licensing system and inviting global crypto exchanges to explore opportunities in the city. Hong Kong has long been a financial center, so this plan was a way to boost that reputation post-COVID when brain drain and lockdowns challenged its financial hub reputation.
Then, in November, FTX totally collapsed, triggering a meltdown in the crypto scene.
Still, Hong Kong is keeping up its crypto goals.
"As certain crypto exchanges collapsed one after another, Hong Kong became a quality standing point for digital asset corporates," said Paul Chan, Hong Kong's financial secretary since 2017, at a Web3 forum. Chan added that Hong Kong is still going to push regulations to match "international norms and standards."
Right now, crypto regulation is managed by a few different government sectors in Hong Kong. The Hong Kong Monetary Authority looks at stablecoins, and the Securities and Futures Commission (SFC) enforces regulations. And Financial Services and the Treasury of Hong Kong (FSTB) places crypto within financial regulation, starting the conversation on allowing retail investment in crypto, which was previously a no-go.
Now, the SFC has said it will propose a shortlist of crypto tokens to be used for retail trading. CEO Julia Leung explained: "Virtual assets have in the past year gone from peak to low levels. The good thing is that when the froth is taken out from the system as platforms and some tokens collapsed, it focuses investors and sellers' minds on investor protection."
The SFC will also start accepting applications for visual asset service provider (VSAP) licenses in 2024. All trading platforms and exchanges need a license, otherwise, they'd face fines and/or jail terms.
Now, it looks like many technology companies and tech start-ups are flocking to Hong Kong, looking to set up headquarters there.
In other news ...
📈Stocks: MSCI’s global gauge of stocks is up 1.11% at 2700.75 at the time of writing.
- Dow Jones is up 0.80% to 33,973.01.
- Nasdaq Composite rose 1.76% to 10,931.67.
- S&P 500 gained 1.28% to 3,969.61.
- Hang Seng Index is up 0.49% to 21,436.05.
🧠Some quick factors to bear in mind:
- US stocks rallied on Wednesday as investors eagerly await Thursday's consumer price index (CPI) inflation report. Many are hopeful that it will show a further cooling of inflation, giving the Fed the green light to slow its rate hikes down to 25 basis points.
- The tech-heavy Nasdaq Composite's first four-day rally since September added to the bullish mood.
- Meme stocks were also having a field day, with Bed Bath & Beyond skyrocketing over 68%, AMC surging over 21%, and GameStop gaining more than 7%.
- Chinese stocks also closed higher for the day, with the Hang Seng index reaching its highest level in six months.
- Chinese e-commerce giant Alibaba Group's shares soared over 3% in Hong Kong following its agreement with the government of Hangzhou on more strategic cooperation.
👄Some comments and chatter:
- “As we get closer to the end of this interest rate hike campaign that the Fed is doing, tech stocks should rally. Let’s just face it: Last year they got creamed, so there are investors that want to pick up some bargains,” said Gina Bolvin, president of Bolvin Wealth Management Group, referring to the Nasdaq’s four-day rally.
- “I think 25 or 50 would be reasonable; I’d lean at this stage to 25, but it’s very data-dependent. Adjusting slowly gives more time to assess the incoming data before we make each decision, as we get close to where we’re going to hold. Smaller changes give us more flexibility,” said Boston Fed President Susan Collins to The New York Times, referring to the Fed’s next interest rate hikes.
🛢Oil: Oil prices rose on Wednesday, climbing to their highest point in a week, as investors take in an improved global outlook and potentially higher demand. With this, US crude climbed 3.1% to US$77.41, and Brent rose 3.2% to US$82.67 per barrel.
👛Bitcoin: At the time of writing, Bitcoin was up 0.76% at US$17,574.20.
🚂Paris railway station attack: At France’s Gare Du Nord train station in Paris early Wednesday morning, someone started attacking people but was disarmed by off-duty police officers and border police. Six people were injured. The attacker used a homemade weapon described as a sharpened metal hook.
🖼Brazilian artworks damaged: After rioters stormed Brazil’s federal government on Sunday, they destroyed many key pieces of art in those buildings. Much of the art on display was important to Brazil’s national history, and some of it was damaged beyond repair. Among the pieces damaged are the Balthazar Martinot clock, chairs designed by Polish architect and designer Jorge Zalszupin and the painting As mulatas by Emiliano Di Cavalcanti.
🤝The US and Japan upgrade military: Recently, the US and Japan have been developing and strengthening their security and intelligence ties. Now, they’re set to announce a few more joint-military measures, like a newly redesignated Marine unit with advanced intelligence, surveillance and the ability to fire anti-ship missiles. The two countries are showing off a little to deter Chinese aggression.
🗺Biden’s immigration policy: Last week, Mexico announced it would accept 30,000 migrants each month from Venezuela, Haiti, Nicaragua and Cuba who attempt to cross into the US illegally. At the end of the two-day North American Leadership Summit this week, Biden defended his border policies and thanked President López Obrador for accepting those asylum seekers. Republicans, Democrats and humanitarian groups have criticized Biden’s policy, which aims to increase legal arrival applications and expand restrictions on asylum.
💧Sinking land in India: After India had some major floods in 2021, residents of Joshimath town in Uttarakhand started noticing cracks in their houses and buildings. This is because the land had started sinking. After a temple collapsed last Friday, authorities have been evacuating residents to temporary shelters.
👩⚖️Executions in Iran: Iran has been executing some people linked to the ongoing anti-government protests. Now, the UN’s human rights chief says that these death sentences are “state sanctioned killing,” and that the executions are meant to strike fear into the population and stop dissent. He also added that they are a violation of international human rights law.
🔫Tigray forces begin handing over weapons: Last November, a ceasefire was set between the Ethiopian military and rebel Tigray forces after a two-year war. As a part of that agreement, Tigray had to give up their weapons. On Tuesday, the forces began handing over heavy weaponry to the national army.
💻Mac touch screens?: Bloomberg reports that Apple is working on adding touch screens to its Mac lineup, which is a pivot away from its longstanding opinion on the issue. Steve Jobs once said the idea would be “ergonomically terrible.” But plenty of Apple rivals have added the feature, so it's looking to jump on the bandwagon.
🎾Osaka hiatus: Famed tennis star Naomi Osaka announced her pregnancy on Instagram and confirmed that she would return to the sport in 2024 for the Australian Open. She said one of the things she’s looking forward to is her kid cheering her matches on from the sidelines.
☀US$2.5 billion solar plant investment: Last August, President Biden signed a climate and tax bill to boost green energy and to expand domestic manufacturing. On Wednesday, a Korean solar company, Hanwha Qcells, announced plans to spend US$2.5 billion to build a manufacturing complex in Georgia (the US state). This will draw some of the company’s supply chain, which is mainly based in China, to the US.
🚀Capsule leak in space: On Wednesday, Russia said it would send another spacecraft up to the International Space Station to bring home two cosmonauts and a US astronaut after their first capsule was hit by a micrometeoroid and started leaking. The new capsule will head up in February, and the crew’s mission will be extended by a few months.
🚄High-speed rail to resume: The Guangzhou-Shenzhen-Hong Kong Express Rail Link was only in service for about 16 months before being shut down in January 2020 because of the pandemic. Now that the Hong Kong and China border has been re-opened, the high-speed rail will again be transporting passengers starting Sunday.
🎞Michelle Yeoh wins Globe: Michelle Yeoh won for best actress in a motion picture, musical or comedy category for her role in "Everything Everywhere All at Once." She wasn't cutting the moment short, either. When producers tried to wrap up her speech with the orchestra, she jokingly told them to "shut up" and that she could beat them up.