Category: zerohedge

President Biden is about to introduce two separate components of what is expected to be a $3 trillion infrastructure plan, White House Press Secretary Jen Psaki told Fox News on Sunday.

The first part of the “Build Back Better” plan – which Biden will float on Wednesday – is expected to focus on rebuilding ‘roads and railways,’ while the second part which will be released “in just a couple of weeks” will focus on “social infrastructure” funding, including childcare and healthcare.

On Monday, the New York Times reported that Biden advisers recommended splitting the $3 trillion plan into two components, which may make it easier to gain much-needed GOP support given Democrats’ narrow majorities in both chambers of Congress. The Times also reports that $1 trillion may be devoted largely to ‘building and repairing physical infrastructure’ with an emphasis on climate change.

The second component of the $3 trillion plan would include proposals such as free community college and universal prekindergarten, and will “will address a lot of issues that American people are struggling with,” according to Psaki (via CNBC).

Talk of Biden’s next big push on the economy comes just weeks after the president signed a $1.9 trillion Covid-19 relief bill, which included funding for vaccine distribution as well as stimulus payments for most Americans.

The coronavirus legislation was passed without any Republican support via a special congressional mechanism known as budget reconciliation. The nearly-$2 trillion package was funded by federal borrowing.

The White House hasn’t said whether it will use reconciliation to pass legislation related to its infrastructure agenda, though it seems likely that separating the two parts of the plan is aimed at avoiding the streamlined process for at least one bill. -CNBC

Meanwhile, Psaki warned that Biden’s plan may require tax increases – though she declined to elaborate.

“The total package we’re still working out, but he’s going to introduce some ways to pay for that, and he’s eager to hear ideas from both parties as well,” she said.

And moderate Democrats aren’t so sure about that.

According to Axios, at least two moderate Democratic Senators required to pass a GOP-opposed tax hike, Joe Manchin (WV) and Kyrsten Sinema (AZ), are already pushing back against some of the tax hikes needed to pay for the infrastructure package and other measures. In the House, Speaker Nancy Pelosi (D-CA) can lose just three Democratic votes if Republicans are unified in their opposition.

More via Axios:

• Over the past week, Axios has been interviewing moderate Democratic House members. Several are skeptical about Biden’s tax-and-spend plans, and some were willing to say so on the record.

  What they’re saying: A leader of the House Democrats’ moderate faction, Rep. Josh Gottheimer of New Jersey, said he worries about tax increases that could slow economic recovery and drive residents out of his state.

• “We need to be careful not to do anything that’s too big or too much in the middle of a pandemic and an economic crisis,” he said.

• While he wants to see the overall package before commenting on specific tax rates, he said, “It’s got to be responsible and both parties need to be at the table. This can’t just be jammed through without input and consideration from the other side.”

• Gottheimer, who co-chairs the bipartisan Problem Solvers Caucus, said he won’t even consider Biden’s tax proposals unless the president agrees to reinstate the State and Local Tax (SALT) deduction capped under former President Trump worth tens of billions every year. “Simply put,” Gottheimer said, “no SALT, no dice.”

• Rep. Tom Suozzi (D-N.Y.) also told Axios: “I’m not voting for any changes in the tax code unless we reinstate SALT as part of the deal.”

Moderate House Democrat Scott Peters (CA) says he’s fine with a smaller corporate tax hike of less than Biden’s 28%, saying he thinks “Republicans overshot” when Trump lowered the corporate tax rate from 35% to 21%. “I think that 25% is fine,” said Peters, adding “It doesn’t disadvantage our companies, and in turn our employees, workers…I think 25% is the right spot.“

In a statement to Axios, Psaki said “We know there will be a range of views on how we get there, but we look forward to working with a broad coalition of members on the critical priorities of the president’s plan: creating good jobs and making America more competitive — paid for without any tax increase on people making less than $400,000 a year.”

Of course, for those paying attention – that’s $400,000 year combined, meaning individuals making over $200,000 per year could also be hit with increases.

Via SchiffGold.com,

Jerome Powell and Janet Yellen testified jointly before the US Senate last week. Inflation was a big topic of conversation. The Fed chair continued to insist that the central can fight inflation if necessary, but that it really isn’t a problem we need to worry about right now. In his podcast, Peter Schiff said the truth is inflation is a problem. And when it comes to dealing with that problem, the Fed is in a box. It will never pick a fight that it can’t win.

The Federal Reserve balance sheet has swelled to a new record of over $7.72 trillion. It was up another $26.1 billion on the week last week. Peter said he expects this number to continue increasing at an even faster rate in the near future.

I would not be surprised to see the balance sheet hit $10 trillion by the end of 2021 because we have a lot of deficit spending in the pipeline and there is no way to pay for it other than the Federal Reserve.”

One of the questions directed toward Powell was about the Federal Reserve’s independence. Powell talked about how important it is. But Peter said the actions of the Fed chair show there’s really no independence at all.

There’s independence in form only, but not in substance. We pretend we have an independent Fed, but in reality, the Fed acts as if it’s just a branch of the US Treasury Department. The fact that both the secretary of the Treasury and the Fed chairman are testifying together shows a degree of cooperation. They’re working together and it seems that they are trying to coordinate their policies.”

The reason the Fed is keeping interest rates so low and expanding its balance sheet is to accommodate the US government as it spends more and more money.

So clearly, the Federal Reserve is acting in concert with the Treasury to advance the Biden agenda, which is exactly what they were doing when Trump was there.”

Ron Paul made a similar point in a recent article, sounding a chilling warning. “Unless the government changes course, America will experience a crisis greater than the Great Depression.”

Peter said this notion of Fed independence is “laughable.”

When you get down to it, none of them really act as if the Fed is independent and none of them are willing to deliver the bitter-tasting medicine that will actually cure the economy of what truly ails it.”

Inflation was also a topic of the Q&A with Powell and Yellen. One senator asked the Fed chair what tools the central bank has if inflation turns out not to be transitory. Powell gave the standard answer, saying the Fed can raise interest rates and shrink the balance sheet by selling Treasuries in the open market.

Yes, those are the tools. The problem is there’s no way they’re going to use the tools.”

It’s a shame nobody asked what would happen to the economy if the Fed did use these tools to fight inflation. Keep in mind, the Fed is currently supporting the US economy and its trillions in deficit spending by keeping interest rates at zero and buying billions in US government bonds. Peter said if the Fed was to reverse this policy to fight inflation, it would spark a massive recession.

In fact, we’d be in a worse recession than the Great Recession of 2008.”

That raises the key question: would the Fed really put the economy in a recession to fight inflation? Peter said he doesn’t think Powell would actually admit that he would do that.

And in fact, I actually think the next recession is going to be caused by inflation. The reason we’re going to slip into recession is because of inflation. Because rising costs are going to put a lot of pressure on businesses to reduce those costs by laying off workers. And rising prices are going to put a lot of pressure on consumers to cut back on their total spending. I mean, they may spend more money because prices are higher, but they’re going to buy less stuff. So, some of those businesses that are selling less stuff are going to have to lay off workers. So, I think inflation can be the reason the economy goes into recession. So, it’s not that, ‘oh, we have this booming economy and we have inflation, and so the economy is so strong and the Fed could raise rates to fight the inflation without interfering with the strong economy.’ It’s my thesis that we’re going to go into recession because of inflation. So, we’re going to have inflation and recession simultaneously — stagflation.”

If the Fed actually does the right thing and uses its tools, it would quite possibly turn that inflationary recession into a full-blown depression.

And what is the Fed and government playbook for an economic downturn? Stimulus! That means more borrowing and spending. How would they pull that off if the Fed is trying to tighten monetary policy to fight inflation? And if they were willing to do the right thing – why not do it now? The longer the Fed waits to normalize monetary policy, the bigger the bubble gets and the more debt the government piles up.

Because the Fed is not willing to do the right thing now, I don’t believe it’s ever going to be willing to do the right thing. So, no matter how high inflation gets, they’re going to make an excuse as to why it’s transitory, or as to why it’s not important, or maybe they’ll find a way to recalculate the numbers so they can pretend that inflation isn’t there. But the one thing they can’t do about inflation is fight it. And when the markets finally figure out the box that the Fed is in — then that’s it.”

President Biden and the Democrats are selling all of this stimulus by claiming the rich will pay for it.

The reality is all of the Biden spending is going to be paid for by the middle class and the poor through inflation. The inflation tax is going to hit every American hard, in particular, the Americans that don’t have a lot of financial assets that will rise with inflation, and that simply have their paychecks and their savings. They are going to get decimated. This is a huge tax. The government is not for free. This government is going to cost a lot of money, and the people who can least afford to pay for it, they’re going to be the ones who are stuck with the bill.”

Last June, long before anyone had heard of SoftBank’s public stock trading group, had seen the unbelievable and perhaps illegal gamma meltup in Tesla, and before even retail traders became experts in sparking gamma squeezes across illiquid names, we published what was arguably the best primers on gamma, op-ex and option-driven equity flows, straight from Goldman’s derivatives strategy team.

Those who missed it can read it here, although there is certainly a bit of a learning curve.

Still since the topic of Greeks, Gamma, and option-driven flows will become increasingly important, we urge everyone to at least watch the hour-long video below courtesy of our friends at SpotGamma, which provides an introductory overview of Gamma and it’s application to stock and options investing.

The video starts with a clear distillation of how hedging works, why large market participants become forced to trade at certain times, and how to use this knowledge to your advantage.

Submitted by Thomas Kirchner of Camelot Portfolios

Summary

• Today’s tech market shares similarities with prior bubbles.

• Investors should reduce tech allocations.

• Limited risk to broader market

March 10, 2000 marked the peak of the dot-com bubble. Almost to the day 21 years later, a new tech bubble is in the process of bursting. The peak of the current NASDAQ-bubble occurred on February 9, while the 2020 Corona-trough had its one-year anniversary on March 23rd. If we want to know whether we are in a bubble yet again, we need to examine its characteristics.

Analogies abound

While the specifics vary, there are many similarities between the tech bubble over 20 years ago and the one that we may be in today.

• Unproven business models
  One of the reasons why SPACs have been so active in the M&A space is because they take public companies without profits that would find going public to be be quite difficult otherwise. For example, helicopter ride sharing may be cool. But it’s far from clear that it will ever be a viable business, if only due to the energy inefficiency of rotor-based levitation compared to the highly efficient lift of fixed-wing aircraft, whose efficiency beats even that of land-based transportation for longer distances.

• Overly optimistic market size projections
  The top 5 car manufacturers (Toyota, Volkswagen, Ford, Honda, Nissan) have a combined market share of about 1/3 of the worldwide car market. Their combined market capitalization is around $200bn. We find it hard to imagine a scenario for market share and margins in which a valuation of Tesla of over $800 bn could be justified. There simply aren’t enough car buyers in the world, even when you account for additional business lines that Tesla may have. A similar calculation can be made for the market size and pricing power of Covid-vaccines, as we wrote in January.

• Ignoring margin compression and commoditization
  Fiber optic cables used to be very profitable; until everyone laid them everywhere and the price of bandwidth crashed. The same phenomenon occurred with solar cells – their prices remained elevated until Chinese manufacturers decided to build not just one, but several giga factories. In today’s boom, Uber and Lyft are going after the legacy taxi and livery market and struggle to make a profit despite charging exorbitant commissions. As a result of their competition, taxi fares have dropped significantly, which in turn has depressed the pricing power of ride share apps. We can think of several me-too rideshare apps that disappeared as quickly as they popped up.

• Winner-takes-it-all risk
  Facebook is a great business, yet not the first one of its kind. Just like Netscape was the first internet browser whose business died when Microsoft bundled its browser for free with Windows, MySpace became irrelevant when Facebook induced many kids to switch. We have been invited to join quite a few me-too social networks since then, but none has been able to steal substantial market share from Facebook. Of course, that can change any day when someone comes up with a better mouse trap, at which point we would not want to have bought Facebook shares at a market cap of $800bn .

• Underestimating obsolescence
  If you were invested in Amazon many years ago, you’d be doing quite well today. But Amazon is an outlier. Survivorship has otherwise been very low and obsolescence is high. Palm Pilot and Motorola’s Razr are history. Similarly, many companies that are tech leaders today and that have driven most tech returns more recently didn’t even exist in 2000 – think Facebook and Twitter. Remember Angry Birds? Its maker Rovio went public in 2017 in the midst of the craze for €11.50 per share and now trades at half that, despite growing earnings.

• Margin debt at new highs
  Charts showing record levels of margin debt circulate on the internet. The growth looks exponential and commentators claim that levels are unsustainable and represent bubble levels. However, by our calculation, margin debt is not particularly elevated when expressed as a percentage of S&P 500 market capitalization. In fact, when you look at past extremes in the market and the subsequent pullbacks, margin debt has tracked very closely the pullback in the market. Similarly, in strong rallies, margin debt expands at roughly the same speed as the market. This phenomenon has been persistent in the current expansion, irrespective of whether you put its starting point at the 2009 trough or the 2016 beginning of the latest move higher.

• Novice investors lured by message boards
  Silicon Investor and the Yahoo message board seemed to be driving a lot of the stock market mania during the late 1990s. Today it seems to be the WallStreetBets forum on Reddit. We have learned from Congressional testimony that stock promoters in these forums have made millions, while reporters of the Wall Street Journal have found novice investors who paid $300 for GameStop with money borrowed on credit cards.

• Regulatory risk
  Often overlooked is the risk of regulatory action, because the dot-com bubble was not followed by a major regulatory clampdown on technology companies. Yet, if we look back at the investment boom in radio stations in the 1920 and 1930s, which was state-of-the-art communications technology at the time, the government created the Federal Communications Commission (rather, its predecessor) in response to the growing might of radio monopolies. Along with the commission came a byzantine web of ownership rules that survive to this day. Social media companies are already under threat from regulation of hate speech (penalties of up to $50 million per violation in Europe) and it is not hard to foresee a scenario where even stronger regulatory requirements could regulate away the profits of these companies.

But tech works?

Sure, tech has worked very well indeed in recent years. It depends, however, on the time period you look at. Over the last 10 years, the NASDAQ has outperformed the S&P 500 by 263 percentage points. This strong performance helps it offset much of its underperformance of the 2000-2010 period. Since the peak of equity markets on March 10, 2000, the NASDAQ underperformed the S&P 500 by 46 percentage points over the next decade.

In other words: technology outperforms, but, like any other asset class only in the right environment. Since environments tend to change, outperformance can be mean-reverting. After a decade of technology-sector dominance the risks favor future technology-sector underperformance for an extended period. The trillion dollar question is: when does the tide turn?

Not many or possibly no one has the market timing skill to answer that question, but we can go back and look at the last turning of the tide.

After its 2000 peak, it took the NASDAQ about a year to give back its outperformance that had started in late 1996 and fall back to the level of the S&P 500. However, losses did not end there but continued until the S&P 500 started turning around in 2004. Overall, the bubble was a 5-year roundtrip. For comparison, we are now in at least year 10 of a technology rally (we won’t start debating where we should set the starting point). The quick pullback that started in 2000 suggests that once mean-reversion starts, investors will have little time to adjust their allocations. Therefore, investors with a slow reaction time, in particular those whose allocation decisions need to be sanctioned by a process that involves consultants, investment committees and boards, would be well advised to trim their technology sooner rather than later.

The broader market is, in our view, not as overvalued as it was in 2000 because valuations look less stretched than they did back then. However, passive index investors could still suffer due to the high allocation of market-weighted indices to highly valued tech companies. The S&P 500 in particular looks vulnerable from a tech pullback as more than 25% of its top holdings are tech companies.

While the biggest COVID-19 story on Monday was the new CDC director’s unhinged warning about her feelings of “impending doom” during a virtual house briefing, it’s worth noting that the pace of new COVID cases globally has been accelerating for five weeks as a new wave.

First off, the CDC has extended the pandemic eviction moratorium, set to expire Wednesday, until June 30. The news follows reports that Moderna has now shipped another 100MM COVID jabs to the US government. The news coincides with the CDC’s report that the pace of US vaccinations has exceeded 3MM doses per day for the past three days. The US is nearing 145MM COVID vaccinations, nearly 5x the number of confirmed COVID cases in the US (just shy of 30.3MM).

Outside the US and Europe, India and Brazil (the new global leader in new virus cases and virus-linked deaths) have drawn attention for their resurgent outbreaks, though the state of the two country’s responses is very, very different.

On Monday, India reported its has reported its worst single-day increase in COVID-19 cases since October, taking the tally to more than 12MM for the first time ever.

A total of 68,020 new coronavirus cases were reported in the last 24 hours, the health ministry said. It was the highest daily rise since Oct. 11. Daily deaths rose by 291 on Monday and the virus has so far killed 161,843 people in the country.

India has been reporting a spike in cases – above the 60,000 mark – for three consecutive days, though Monday’s rise was still below September’s peak of more than 90,000 cases a day. Sunday’s numbers also marked the sixth consecutive day that the country has reported a new record high for 2021.

India’s worst affected state, Maharashtra, is considering imposing a strict lockdown this week and has already tightened travel restrictions and imposed night curfew in a bid to put a lid on rising cases of infections.

Threatening to make matters worse, Hindus across India are celebrating Holi, even as states in the country have tried to restrict gatherings, citing concerns that they could stoke even more viral spread.

In Europe, as German Chancellor Angela Merkel threatens to impose new restrictions like a curfew, the Slovenian government moved to reinstate coronavirus restrictions as infections and hospitalizations rise.

“We’re in a race against time,” said Prime Minister Janez Jansa during a press conference on Sunday, announcing that public life in the country will essentially be suspended between April 1 and 12.

The UK has of course presided over a much more successful vaccine-rollout program than Europe, and as a result, people in England are now allowed to meet outdoors in groups of up to six or two households (with social distancing), as the country officially started easing COVID-related restrictions on Monday. The country has been in full national lockdown since Jan. 4, after a mutant COVID strain believed to be more infectious was isolated in the southeastern part of the country.

Outdoor sports facilities such as tennis courts, swimming pools and golf course will reopen.

While weddings can now continue, they are still only allowed to a maximum of six attendees.

As the ‘stay at home’ level restrictions expires, UK Prime Minister Boris Johnson is urging caution as cases elsewhere in Europe continue to grow.

“I know how much people have missed the camaraderie and competition of organized sport, and how difficult it has been to restrict physical activities — especially for children,” Johnson said.

“I know many will welcome the increased social contact, with groups of 6 or two households now also able to meet outdoors,” he added.

While it is the most significant easing in England since schools returned on March 8, many businesses remain shuttered.

Authored by Isabel van Brugen via The Epoch Times,

Sen. Lindsey Graham (R-S.C.) on Sunday accused President Joe Biden of playing “the race card” on a newly enacted law that seeks to improve the integrity of elections in Georgia.

“You know what’s sick is [to] have the president of the United States play the race card continuously in such a hypocritical way,” Graham told Fox News Sunday.

“He said the filibuster was a relic of the Jim Crow era. Well, he made an hour speech when he was a senator suggesting the filibuster was the best thing for the Senate to make it different [to] the House.”

Graham made the remarks in response to a question from host Chris Wallace on the 95-page Georgia law (pdf) passed on March 25 by the Republican majority House and Senate.

The bill passed the state House by a 100-75 vote and the state Senate by a 34-20 vote, with no Democrats backing the reform measures.

The Republican-led reforms were to ensure accessible but fair voting, including requiring photo or state-approved identification to vote absentee by mail. The law also mandates that secure drop boxes be placed inside early voting locations, with constant surveillance, and it expands early voting across the state to address a key Democrat concern.

The law, the Election Integrity Act of 2021, also shortens the election cycle for runoffs to four weeks from nine and requires a minimum of one week of early voting before Election Day.

On March 26, during his first solo press conference, Biden criticized the law as “a blatant attack on the Constitution and good conscience.”

“It adds rigid restrictions on casting absentee ballots that will effectively deny the right to vote to countless voters. And it makes it a crime to provide water to voters while they wait in line—lines Republican officials themselves have created by reducing the number of polling sites across the state, disproportionately in Black neighborhoods.”

He labeled the law as a “Jim Crow in the 21st century,” referring to Jim Crow laws that enforced racial segregation in the south.

“It must end. We have a moral and constitutional obligation to act,” Biden said.

 “What I’m worried about is how un-American this whole initiative is. It’s sick, it’s sick.”

Graham told Fox News in response, “Every time a Republican does anything, we’re racist.

“They [Democrats] use the racism card to advance a liberal agenda, and we’re tired of it. H.R. 1 is sick, not what we’re doing in Georgia,” Graham said of the divergent Democrat-led election reform bill.

Biden has called on Congress to pass the Democrat-led H.R.1—For the People Act—a bill that seeks to federalize and make permanent many of the election reforms adopted as temporary measures in 2020 by a handful of states in response to the CCP Virus pandemic.

Democrats say the provision will shed light on “dark money,” while Republicans say the legislation’s transparency requirements would violate free speech rights, opening political donors to cancel culture.

The president has said he would sign the bill into law if it reaches his desk.

The Epoch Times has reached out to the White House for comment.

One would have hoped that if the global financial community had learned one lesson from the covid crisis, it would be that companies would be far less reckless when repurchasing billions in shares – all with the express purpose of making shareholders and management richer – while levering up and exposing themselves to catastrophic risk, usually culminating in taxpayer bailout requests as the following headline from just over a year ago summarized so well.

Alas, we are dealing with Wall Street, and if there is one lesson above all to be learned, it is that any secondary lessons that leads to less revenue are quickly forgotten. Which brings us to the latest Client Flow report, where we learned that despite a very modest slowdown vs the prior week, the recent resurgence in stock repurchases means that the four-week average buybacks are now at a record high in BofA’s data going back to June 2009…

… driven by Tech as usual, although helped by a pick-ups in Cons Disc., Financials, and Health Care as well.

More amazing yet is that YTD, buybacks – most of which remain debt funded (by the very same companies that will demand a bailout once the market tumbles and they again face bankruptcy) are now on-pace with levels at this time last year.

In short: not only is everything back to abnormal, but we now have full-blown buyback mania back coupled with the Fed injecting $120BN in liquidity every month until at least 2022. For those who somehow think that this makes for a prudent shorting combination, our condolences.

Authored by Steve Watson via Summit News,

White House health adviser Dr. Anthony Fauci declared Sunday that children either need to be vaccinated or must wear face masks if they want to play together.

“When the children go out into the community, you want them to continue to wear masks when they’re interacting with groups or multiple households,” Fauci proclaimed during an appearance on CBS News.

Fauci added that “children can clearly wind up getting infected” even if other kids they play with have been vaccinated against coronavirus.

Watch:

Fauci added that children may ‘conceivably’ be able to engage in Summer camps, but only if mass vaccinations continue.

“We now have 3 to 3.5 million vaccinations each day. If we keep up with that pace, invariably, that’s going to drive the rate and the level of infections per day to a much much lower level,” Fauci said, adding that this may provide a “good degree of flexibility during the summer… with things like camps.”

Fauci warned that removing restrictions before vaccinations have been completed is “premature”, adding that an increase in cases of COVID “is because of things like spring break and pulling back on the mitigation methods that you’ve seen.”

Last week Fauci claimed that in order for herd immunity against coronavirus to be reached in the US, children and even babies will have to be vaccinated.

We will vaccinate school-age kids and 6-month babies to protect them from COVID. Dr. Anthony Faucihttps://t.co/0J5JkVvdS6#Follow @JimmyAdHub pic.twitter.com/6lllI7SUeD

— JimmyAdHub (@JimmyAdHub) March 18, 2021

Fauci also dismissed concerns that mRNA COVID-19 vaccines could impact children’s genetics.

Roughly one year ago, Zero Hedge was “permanently” banned from Twitter for daring to suggest that the novel coronavirus outbreak rocking the globe might have originated with a lab called the Wuhan Institute of Virology, a Level 4 Biosafety facility where scientists were – as fate would have it – researching coronaviruses, including viruses gleaned from bats.

When Chinese authorities identified a massive “wet market” in the city as ground zero for infections, suggesting the virus originated with some of market’s wares, which including live civets and bats, considered delicacies by many Chinese, it was a scientist who first pointed out the lab’s proximity to the market, and noted the likelihood that the virus had probably leaked from the lab via an unsuspecting scientists.

What followed was a barrage of US media stories claiming the lab leak hypothesis was “unsubstantiated” and a “conspiracy theory”. NPR went so far as to publish a piece quoted a handful of scientists (almost all of whom had deep financial and professional ties to China) talking up China’s lab-security protocols and dismissing the theory as completely baseless. Yet, reporting since then has confirmed official complaints about safety at the lab.

Yet, here we are, one year later, and after at least two attempts to send teams of WHO scientists to investigate the origins of the virus, no foreigners were ever allowed to freely investigate.

Despite this, the team compiled a report on the origins of the coronavirus – a report that essentially confirms the “official narrative” that was reported early last year: that the virus likely originated in bats with an unknown “intermediary” (some have suggested a civet) likely transferring it to humans. The report, which was reviewed and, according to reports, heavily censored by Chinese authorities, insists that a lab leak was “extremely unlikely,” according to an advanced copy leaked to the AP.

Well, after taking Beijing’s word for it (with a few notable exceptions) for the last year, the American press is finally showing some skepticism about the virus’s origins. Case in point: on Sunday night, CBS’s “60 Minutes” ran a feature story questioning the offiicial narrative about the virus’s origins, citing the latest delay of the WHO report (which, again, was leaked last night), as suspicious.

Lesley Stahl interviewed Jamie Metzl, who complained Friday that the report was “compromised”, and Wuhan Lab-affiliate Peter Daszak, as she poked holes in the official narrative more efficiently than any mainstream reporter we have seen.

Metzl started by claiming that the WHO “investigation” was completely useless, comparing it to a “study tour” where scientists only saw “what the CCP wanted them to see.”

Jamie Metzl: I wouldn’t really call what’s happened now an investigation. It’s essentially a highly-chaperoned, highly-curated study tour.

Lesley Stahl: Study tour?

Jamie Metzl: Study tour. Everybody around the world is imagining this is some kind of full investigation. It’s not. This group of experts only saw what the Chinese government wanted them to see.

As 60 Minutes points out, Metzl, a former NSC official in the Clinton administration and member of a WHO advisory committee on genetic engineering, is one of more than two dozen scientists and officials (including virologists) who signed an open letter earlier this month calling for a new investigation to return to China. Obviously, at this point, Beijing has had more than a year to effectuate a cover-up.

During their converstaion, Metzl explained just how much control Beijing has had over what the investigators saw and weren’t allowed to see.

Jamie Metzl: We would have to ask the question, “Well, why in Wuhan?” To quote Humphrey Bogart, “Of all the gin joints in all the towns in all the world, why Wuhan?” What Wuhan does have is China’s level four virology institute, with probably the world’s largest collection of bat viruses, including bat coronaviruses.

Lesley Stahl: I had seen that the World Health Organization team only spent 3 hours at the lab.

Jamie Metzl: While they were there they didn’t demand access to the records and samples and key personnel.

That’s because of the ground rules China set with the WHO, which has never had the authority to make demands or enforce international protocols.

Jamie Metzl: It was agreed first that China would have veto power over – over who even got to be on the mission. Secondly –

Lesley Stahl: And WHO agreed to that.

Jamie Metzl: WHO agreed to that. On top of that, the WHO agreed that in most instances China would do the primary investigation.

And then just share its findings –

Lesley Stahl: No.

Jamie Metzl: – with these international experts. So these international experts weren’t allowed to do their own primary investigation.

Lesley Stahl: Wait. You’re saying that China did the investigation and showed the results to the committee and that was it?

Jamie Metzl: Pretty much that –

Lesley Stahl: Whoa.

Metzl followed this up with a powerful comparison: Imagine if the US had let the Soviets run an international investigation into Chernobyl? Metzl added: despite evidence of past deadly lab leaks in China, Metzl said no one on the team was trained to identify signs of a lab leak.

Also, while the team went on a four-week mission, two of those weeks were spent holed up at this hotel in quarantine. Once out, they had some tense exchanges with their counterparts, a team of Chinese experts, over their refusal to provide raw data. If the virus originated in animals, the key unanswered question is: how did the virus travel the thousand miles from the bat caves in southern China to Wuhan?

Unsurprisingly, the WHO team thinks it has an alternative explanation for this that doesn’t involve a lab leak. Infected animals were simply captured at farms near the bat caves, and shipped the stock to the Huanan market in Wuhan.

To argue the other side, 60 Minutes brought in Peter Daszak, a member of the WHO team. Daszak has close ties to Chinese labs, and has frequently appeared in the American press to argue against the leak narrative. But after several minutes of equivocating, Stahl forced Daszak to admit the incontrovertible truth: that the WHO has no real evidence to disprove the lab leak. Essentially, the team is just taking China’s word for it, according to Daszak. What choice did they have?

What’s more, Daszak said Chinese government “minders” were in the room with the investigators at all times.

Peter Daszak: We met with them. We said, “Do you audit the lab?” And they said, “Annually.” “Did it you audit it after the outbreak?” “Yes.” “Was anything found?” “No.” “Do you test your staff?” “Yes.” No one was–

Lesley Stahl: But you’re just taking their word for it.

Peter Daszak: Well, what else can we do? There’s a limit to what you can do and we went right up to that limit. We asked them tough questions. They weren’t vetted in advance. And the answers they gave, we found to be believable– correct and convincing.

Lesley Stahl: But weren’t the Chinese engaged in a cover-up? They destroyed evidence, they punished scientists who were trying to give evidence on this very question of the origin.

Peter Daszak: Well, that wasn’t our task to find out if China had covered up the origin issue.

Lesley Stahl: No, I know. I’m just saying doesn’t that make you wonder?

Peter Daszak: We didn’t see any evidence of any false reporting or cover-up in the work that we did in China.

Lesley Stahl: Were there Chinese government minders in the room every time you were asking questions?

Peter Daszak: There were Ministry of Foreign Affairs staff in the room throughout our stay. Absolutely. They were there to make sure everything went smoothly from the China side.

Lesley Stahl: Or to make sure they weren’t telling you the whole truth and nothing but the truth–

Peter Daszak: You sit in a room with people who are scientists and you know what a scientific statement is and you know what a political statement is. We had no problem distinguishing between the two.

To be sure, Metzl acknowledged that the WHO theory is “plausible,” and that his own theory has some holes (“it’s incomplete” he says, adding that he would need more data from Beijing, which the CCP has been reluctant to turn over). But most importantly, Daszak has a conflict of interest, Metzl said, because of his long-time collaboration with the Wuhan lab.

“60 Minutes” also interviewed Matt Pottinger, the former Trump Administration national security official and head of Asia policy who has been one of the most vocal skeptics of the official narrative. Beijing didn’t share the genetic sequences of the virus from the WIV. Pottinger also said Beijing had ordered scientists to destroy all viral samples.

Now, none of that is in itself evidence that the virus leaked from the lab. But it’s a clear sign that a major cover-up has taken place. And the US media’s unwillingness (until now) to reckon with that has been difficult to explain.

As even SNL has embraced the idea of NFTs…

Decrypt’s Matt Hussey explains that while NFTs have transformed the art industry, other industries could benefit from the technology too (music and gaming are actively exploring using NFTs, and other things are beginning to be tokenized too).

The cryptocurrency press, and indeed the world’s biggest media companies have been racing to cover the NFT art craze that has captured the imagination of plaudits and critics alike. 

In addition, a slew of celebrities and brands have lept into the space to try and cash in. The likes of Pizza Hut, Pringles, Taco Bell, and even toilet paper manufacturer Charmin have all announced their version of NFTs.

Elon Musk, Twitter founder Jack Dorsey, Cristiano Ronaldo, Lindsey Lohan, and NFL player Rob Gronkowski have all released their own versions of the digital collectibles. 

In the past month alone, more than $240 million has been spent on pieces of digital art according to market tracker NonFungible.com. Established art-sellers Sotheby’s and Christie’s have also got involved to help bring digital art to its wealthy clientele.

But while NFTs have become synonymous with art – the technology that makes them possible has the potential to change not just images, but any digital product.   

What are NFTs? 

NFTs, or non-fungible tokens are essentially digital deeds attached to the blockchain. When an NFT is created, a unique identifier, typically a string of numbers and letters records the creation date, and is added to a blockchain’s historical record. 

It’s this information that makes each NFT unique, and as such, they cannot be directly replaced by another token. They cannot be swapped like for like, as no two NFTs are alike. Banknotes, in contrast, can be simply exchanged one for another; if they hold the same value, there is no difference to the holder between, say, one dollar bill and another. Hence the moniker ‘non-fungible’.

Bitcoin, by contrast, is a fungible token. You can send someone one Bitcoin and they can send one back, and you still have one Bitcoin. (Of course, the value of Bitcoin might change during the time of exchange.) You can also send or receive smaller amounts of one Bitcoin, measured in satoshis (think of satoshis as cents of a Bitcoin), since fungible tokens are divisible.

Non-fungible tokens are not divisible, in the same way that you cannot send someone part of a concert ticket. Part of a concert ticket wouldn’t be worth anything on its own and would not be redeemable.

Ticketing and Music 

While NFTs have found an affinity in art circles, thanks to their ability to prove scarcity, they are also being used in other places. Concert tickets and other accouterments of the music industry rely on non-fungibility to help prevent fraud, making it a prime candidate for NFT adoption. 

Kings of Leon. Credit: Matthew Followill

Earlier this month, rock band the Kings of Leon released an NFT to commemorate the release of its latest album. As part of the sale, the band released three tokens – the most limited of which included an NFT that could be used as a ticket to a concert performed by the band. 

The company that made that possible, Yellowheart, is trying to help record labels have tighter control over tickets and merchandise by using NFTs. There are other companies trying to do this too. NFT.Kred allows any event organizer to create an NFT as a ticket in just a few clicks. 

Gaming 

The gaming industry has been adept at offering players the opportunity to customize their in-game experience. 

Fortnite’s 350 million players spent an average of $82 on in-game content in 2019, buying clothes and accessories to adorn their avatars. In 2020, that number grew to approximately $30 million spent every month worldwide. But the gaming industry has struggled to combat fraud. 

Stories of buyers being miss-sold items, or users being subject to phishing attacks are common. NFTs however, offer a layer of protection against fraud as they can provide a secure way of verifying ownership and keeping player accounts more secure.

As a result, over the last 12 months, gaming titles have begun offering players the opportunity to make in-game NFT purchases. One of the most popular use cases has been buying virtual land. 

Last month, a group of gamers paid $1.6 million for Citadel of the Stars, a large kingdom in the unreleased fantasy role-playing game Mirandus. That purchase topped the $1.5 million paid for nine adjacent plots in the virtual pet universe Axie Infinity.

The increased security and verifiability has brought big money to smaller titles, too. CryptoKitties, the digital collectible game that allows users to create their own digital kittens uses NFTs. These collectibles have fetched as much as $170,000 in some cases. 

Time

While much of the focus on NFT use cases has been on creating a secure version of a product, some see the technology’s potential as a way of tokenizing people’s time. 

With the explosion of freelance work across the world – freelancers are set to represent as much as 80% of the global workforce by 2030 – companies have made millions by creating marketplaces for employers to hire casual workers. 

Upwork – a popular freelancer site – generated $301 million in revenue connecting freelancers and employers in 2020. That’s led to the emergence of projects like microsponsors, which use NFTs as a way for freelancers to get hired without paying middlemen for the privilege. 

The company allows freelancers to tokenize their work, and allows potential employers to bid for the NFT that represents a chunk of a contractor’s time. 

It also creates immutable records of what work can be done – meaning any agreements around projects or money would be immutably locked on the blockchain.