Month: April 2020

For the past few weeks, most of Wall Street’s Fed watchers and STIR experts such as Zoltan Pozsar and Marc Cabana had lamented that one trick the Fed could pull to ease the tension in the Treasury market and to potentially unlock hundreds of billions in new lending capacity among US commercial banks, was to exclude Treasuries and deposits from the Fed’s much maligned Supplementary Leverage Ratio Rule, which forces banks to hold ultra safe Treasuries and/or deposits on their books (which are traditionally viewed by the Fed as less risky than loans) or else suffer a G-SIB capital surcharge.

Specifically, the Fed’s supplementary leverage ratio applies to financial institutions with more than $250 billion in total consolidated assets, and requires them to hold a minimum ratio of 3%, measured against their total leverage exposure, with more stringent requirements for the largest and most systemic financial institutions.

As we showed in November, JPMorgan’s aggressive dumping of Treasurys is why the bank’s GSIB surcharge was the highest across all US banks despite being widely seen as the safest US commercial bank.

Well, after trying pretty much everything else, including unleashing unlimited QE, expanding swap lines, opening unlimited repos to both domestic Dealers and Foreign central banks, and restarting the entire Lehman alphabet soup toolkit, on Wednesday after the close, the Fed did just that, and announced that to ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses, the Fed announced a temporary change to its supplementary leverage ratio rule, which would exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the rule for holding companies, and will be in effect until March 31, 2021.

Explaining the move, the Fed argued that as a result of the dramatic increase in deposits observed in recent weeks as investors dumped risky assets, banks may be limited in their abilities as “financial intermediaries and to provide credit to households and businesses.” The change to the supplementary leverage ratio should therefore “mitigate the effects of those restrictions and better enable firms to support the economy.”

Liquidity conditions in Treasury markets have deteriorated rapidly, and financial institutions are receiving significant inflows of customer deposits along with increased reserve levels. The regulatory restrictions that accompany this balance sheet growth may constrain the firms’ ability to continue to serve as financial intermediaries and to provide credit to households and businesses. The change to the supplementary leverage ratio will mitigate the effects of those restrictions and better enable firms to support the economy.

The Fed also said that “financial institutions have more than doubled their capital and liquidity levels over the past decade and are encouraged to use that strength to support households and businesses.”

However, to make sure that the expanded balance sheet capacity is not used by banks simply to accelerate stock buybacks, it explicitly stated that “the Board is providing the temporary exclusion in the interim final rule to allow banking organizations to expand their balance sheets as appropriate to continue to serve as financial intermediaries, rather than to allow banking organizations to increase capital distributions, and will administer the interim final rule accordingly.”

Finally, as explained above, whereas the supplementary leverage ratio “generally applies to financial institutions with more than $250 billion in total consolidated assets” and requires them to hold a minimum ratio of 3 percent, measured against their total leverage exposure (with more stringent requirements for the largest and most systemic financial institutions), the SLR change would temporarily decrease tier 1 capital requirements of holding companies by approximately 2 percent in aggregate.

Translation: what the Fed is effectively granted banks some 2% in balance sheet capacity to use as they see fit, as long as it is not for buybacks, eligible capital which they can – and likely will – use to buy more Treasurys knowing they can then just flip those Treasurys back to the Fed with a profit. Sure enough, Treasury yields immediately dumped after the news…

… although they have since rebounded. Why?

Perhaps because the market took one look at the recent usage of the Fed’s repo facilities where any ongoing SLR stresses would have emerged, as Dealers would be forced to pledge more Treasurys to the Fed in exchange for reserves. Instead… crickets: not only have Dealers virtually stopped parking Treasuries at either the overnight or term repo facility…

… but today saw the second “no bid” repo operation ever, as not a single Treasury or MBS was pledged to the Fed in return for cash.

Why? It is not immediately clear what prompted Dealers to shun the Fed’s repo operation, although some have speculated that faced with a choice of parking safe assets at the Fed which paying a modest interest payment, or selling the paper to the Fed as part of the massive unlimited repo, virtually everyone has chosen the second option.

It could also mean that as a result of the meteoric changes observed in the banking system in recent days, the SLR ratio is no longer the bottleneck that either the Fed or strategists think it is.

Instead one possible reason for the operation is to make sure banks have the capacity to lend out the $350BN in loans to small and medium businesses under the Fed’s $2 trillion fiscal stimulus which as a reminder will start being funded as soon as this Friday, and the Fed’s SLR easing provides banks with the needed space to expand their balance sheets to accommodate all the incremental loans. Finally, for those who believe that as a result of this Fed action, the US economy will somehow soar, please remember that loans are not a function of supply but demand, and the last thing on cash-strapped Americans’ minds right now  is how to get even deeper in debt.

Authored by Daisy Luther via The Organic Prepper blog,

The United States of America is basically closed for business, leaving citizens jobless, broke, and without options. We’re facing restrictions on movement the likes of which our nation has never seen. The stores that are open have never fully restocked after the “panic buying” of previous weeks, leading to shelves barren of things like meat, flour, toilet paper, and rice.

It’s only a matter of time before these issues combine to become the flashpoint that leads to an explosion of civil unrest and violent crime.

The financial situation

Unemployment skyrocketed, with 3.3 million claims last week, and the Fed estimates that number to climb to a whopping 47 million due to the virus. Many of these jobs may not come back after the Covid-19 virus has run its course through the nation – businesses small and large are going to be defaulting on their April rent payments, and many simply won’t be able to catch up later.

So far, a lot of people in the area where I’m staying seem to be treating this break of business like a surprise staycation. It’s nice to see families out walking together, playing games, and spending time with the people they love.

But this happiness may be shortlived. Despite generous government-mandated disaster pay, unemployment, and stimulus checks, the money may not arrive in time for former employees, self-employed people, and gig workers to pay their personal bills. And when the money does arrive, for many folks it isn’t going to be the same amount they were earning before the shutdowns. Most people don’t have emergency funds, so things will be dire in short order.

Of course, this affects landlord, mortgage companies, utility companies, retail businesses…the list could go on and on.

The supply situation

A lot of people are blaming “hoarders” and preppers for the shortages seen in stores. Of course, it’s nonsense to blame preppers because we’ve been buying our things over a course of years. And honestly, if it was only “panic buyers” causing problems, wouldn’t the stores be replenished by now? After all, people have hardly been able to shop for two weeks in many states due to social distancing measures.

In reality, there are major issues with the supply chain, a problem many folks aren’t seeing because they’re not at the store. Distribution systems are breaking down.

A source at a Walmart Superstore recently confided that the trucks were only delivering a fraction of the items needed to restock shelves. Imports aren’t arriving in California ports, at least not anywhere close to the degree they were before.

And because more people are eating at home than ever before, the demand on grocery stores has increased dramatically. This also comes at a time after farmers have been driven out of business by the trade war. (source) We have actual shortages here, and it isn’t just due to “panic buying.” That only exposed the dangers of the Just In Time delivery philosophy used by retailers.

Some folks are reporting that the shelves in their areas are full, but many others are reporting the exact opposite.

Restrictions on movement

The third worrisome factor is extreme restrictions on movement. Never in my lifetime have I witnessed such a thing in the United States as we’re seeing now.

Texas and Florida have checkpoints where they’re testing travelers for health problems, escorting them to quarantine, or turning them away. Rhode Island police went so far as to go door-to-door with the National Guard, searching for “New Yorkers” who had fled the virus in their home state.

Most states have closed non-essential businesses and schools for the foreseeable future. Local authorities are beginning to crack down on groups of people and innocent Americans risk being questioned when they leave their homes to walk the dog or go to the store. Last week, thousands of Americans considered essential workers were given “travel papers” to show the authorities if they’re stopped when they are going to work. Travel papers. In the United States of America.

If you can’t satisfy the requirements laid out by your state or local government, you could face fines and even misdemeanor charges for breaking stay-at-home orders.

Don’t count on 911

Add to all of the above, police officers are getting sick. Hundreds of NYPD and Detroit police officers have tested positive for Covid-19.

Some places, like Cincinnati, are limiting in-person police responses to crimes “to reduce unnecessary contact between officers and the public to reduce the spread of COVID-19.”

During the coronavirus outbreak and beginning Tuesday morning, Cincinnati police officers will no longer respond in person to the following reports: criminal damaging, dog bites, lost property, lost or stolen license plates, phone harassment, property damage or found property.

Police will no longer respond to assault reports, unless a suspect is still present or the victim requires medical attention, breaking and entering reports unless a suspect is still present, menacing reports “unless suspect is expected or threatens to return or is part of the elements of domestic violence” or theft reports “where there is no possibility of immediate apprehension.” (source)

How long before officers just stop coming in to work and instead, stay home to take care of their families? And, can you blame them if they do?

Other countries are seeing civil unrest.

The Covid-19 lockdowns are resulting in violence in other countries.

Italy has begun to see chaos. People are running out of food, money, and patience.

Videos are appearing on social media of people struggling to cope with the effects of the lockdown. In Palermo, Sicily, police have been forced to head to supermarkets after reports of people stealing food to feed themselves, and groups have appeared in recent days looking to organise raids on supermarkets.

A video has been widely shared around Italy showing a father beside his young daughter, who is eating a solitary slice of bread, telling the Italian primer minister Giuseppe Conte “We’ve already been inside for 15 to 20 days and we are at our limit. Just like my daughter, other children in a few days won’t be able to eat this slice of bread. Rest assured you will regret this, because we are going to have a revolution”. (source)

It isn’t just an Italian problem. As soon as restrictions were partially lifted in China, citizens began to riot, beating police with their own shields and overturning police cars.

This could be the perfect storm.

It’s only a matter of time before the factors above combine to create the “perfect” conditions for widespread civil unrest and crime. When Cat Ellis wrote her book about surviving this pandemic, there’s a reason she included detailed information about securing your property and preparing for potential assaults on your home or retreat. You’ve got your supplies. Now you need to focus on defensive planning.

And if you think that is far-fetched, then why are retailers across the country boarding up their windows? Zero Hedge reports:

In Beverly Hills, the Pottery Barn and West Elm stores near Rodeo Drive were spotted with boards across the windows according to TMZ…

…Meanwhile, stores in New York, San Francisco, Seattle, Chicago, Paris, Vancouver and elsewhere were similarly boarded up. (source)

I suspect it isn’t just luxury stores that need to get prepared.  The rest of us need to be ready, too. Many people in the preparedness community have noticed with discomfort the increasing number of people saying, “I’ll just come to your house” or “It’s not fair that selfish preppers have all this stuff and they’re refusing to share.” Many of us have been asked by friends, neighbors, and family members if we can spare some toilet paper or hand sanitizer.

The people who suspect you may have food will show up at your door one of these days when they run out of food. First, they’ll come asking for it. Then they’ll come demanding it. And not just from you but also from local businesses. The ensuing theft and violence will lead to harsher crackdowns from law enforcement and vigilante justices as people stand up to defend their homes and businesses. And if you think the Constitution is being trampled now, hold on to your halo. Eventually, this will lead straight to martial law and totalitarianism the likes of which we’ve never seen in our country.

Don’t think for a second that it won’t happen here.

Virus or no virus, people are not just going to quietly stay home and watch as their families starve to death.

What happens when people start running out of the food they hurriedly purchased before the lockdowns? What happens when overloaded unemployment offices are unable to get people’s payments to them in a timely fashion?What happens when the stimulus checks haven’t arrived yet and there’s no money in people’s wallets for groceries? What happens when stores aren’t able to replenish enough to keep people fed?

I think anyone who has been in the preparedness world knows exactly what happens.

Anger. Violence. Looting. Uncontrollable hordes of people storming stores.

Sort of like every Black Friday except this time, people won’t just want inexpensive bath towels and televisions. They’ll want food to keep their families from starving to death. And they’ll be willing to take down anyone who gets in their way. Whether that’s a parent defending the supply they’ve carefully acquired to take care of their own children or a store security guard, it won’t matter to those who have not prepared for this.

Every year, I show video clips in the Black Friday Hall of Shame. And every year, I write, “If they’ll act like this over home linens, what happens when those same people are hungry?”

This may be the year that we find out what happens.

Exactly one week ago, when we highlighted the unprecedented surge in Fed Treasury purchases which since March 19 has amounted to $75BN per day until tomorrow when it tapers modestly to $60BN, we said that the Fed’s record ramp in debt monetization “is hardly an accident: one look at the Treasury securities held in custody at the Fed shows that the past two weeks have seen a whopping $50BN in foreign central bank sales, a 1.7% drop which was the highest in six years.”

As we also noted, “the selling may have contributed to record volatility in the Treasury market and prompted the Fed’s intervention. More importantly, it also means that the biggest buyer of US Treasurys in the past decade, foreign official institutions (i.e., central banks and reserve managers) are now sellers, so now the U.S. government needs private investors to soak up the ever increasing debt issuance.”

But since private investors are busy, trying to avoid getting killed by a deadly Chinese virus, it means that only the Fed now can fund the exploding US budget deficit… which is precisely what it has been doing, having purchased a record $912 billion in US Treasuries since the relaunch of official QE (hence expanded to unlimited QE) on March 13.

But here a problem emerged: because while the Fed may have been hoping to stabilize the bond market and ease the ongoing liquidation of Treasurys by foreign official accounts, it failed, and in the week ending March 25, the amount of Treasurys held in custody at the Fed on behalf of foreign accounts tumbled by a whopping $58BN, bringing the total weekly average to $2.891 trillion, the lowest since April 2017… when total US debt was nearly $4 trillion lower, or $19.8 trillion compared to $23.7 trillion today.

In total, in the turbulent month of March when global markets finally ended the longest bull market of all time, and crashed as much as 35%, and when oil lost more than 50% of its value overnight as Saudi Arabia launched an all out price war with virtually everyone else, Treasurys held in custody at the Fed on behalf of foreign central banks, sovereigns and reserve managers dropped by a record $109 billion – the biggest monthly drop in history.

Another indicator of central banks’ positioning in Treasuries is primary dealer holdings, which tend to rise when official accounts are selling, according to Bloomberg. And, indeed, according to lagged Fed data, Dealer holdings of Treasuries had surged to $272 billion as of March 18, from $193 billion at the start of February, as foreigners sold their positions to Dealers.

“The fall in custody holdings is a clear signal that foreign central banks – which have a lot of Treasury holdings – have been selling them to source dollars,” Subadra Rajappa, head of rates at Societe Generale told Bloomberg. “They need access to dollars as a lot of their payments are in dollars and that has driven them to sell Treasuries.”

The ongoing liquidation in foreign Treasury holdings – largely the result of the continued collapse in the price of oil as oil-exporters are forced to liquidate assets to obtain much needed dollars – led to the Fed’s panicked scramble to announce a foreign central bank repo facility, which it did on Tuesday morning, when it stopped short of saying it wanted to prevent a cascading domino effect from the Treasury liquidation, but made it very clear that the program will provide “an alternative temporary source of U.S. dollars other than sales of securities in the open market.“

Translation: stop selling Treasurys as the world’s (formerly?) most liquid market is now suddenly extremely illiquid, and ongoing sales will only further destabilize it.

Credit Suisse rate strategist Jonathan Cohn echoed Rajappa saying the new repo facility “effectively backstops foreign central banks from forced liquidation of their Treasury holdings into dysfunctional markets.”

The new repo program “is a sensible second-best solution for major countries that are outside the enlarged Fed FX swaps network but have substantial corporate dollar funding needs,” said former NY Fed spokesman Krishna Guha, currently head of central-bank strategy at Evercore ISI. “This group includes China, which ought to be eligible for the new program, though the Fed release is not clear on this point.”

So will the Fed succeed in halting foreign Treasury sales thanks to the brand new repo facility? Or will foreign central banks skip the repo facility, just as US dealers have done for the past 2 weeks, and continue to liquidate forcing the Fed – that last resort monetizer of US deficit and debt issuance – to buy even more Treasurys each day?

We’ll know the answer this time next week when the latest custody data is released, and this time it will include the fully functioning foreign repo facility.

It’s that time again…Trump’s declaration that he expects up to 240k deaths from last night’s presser was widely cited as the reason for Wednesday’s selloff.

Let’s see what we hear from the president today.

Authored by Egon von Greyerz via GoldSwitzerland.com,

Whoever doesn’t learn to dance in the rain will struggle to survive the virtually non-stop storms that the world will experience in the next few years. The abrupt downturn in the global economy, triggered but not caused by coronavirus, came as a lightning bolt out of the blue. Thus, most people are paralysed and will fall helplessly as the world unwinds 100 years of mismanagement and excesses, caused primarily by bankers, both central and commercial.

2006-9 WAS JUST A REHEARSAL

I have for years warned about the enormous risks in the financial system that inevitably would lead to a collapse. As the bubble continued to grow for over ten years since the 2006-9 crisis, very few understood that the last crisis was just a rehearsal with none of the underlying problems resolved. By printing and lending $140 trillion since 2006, the problem and risks weren’t just kicked down the road but made exponentially greater.

So here we are in the spring of 2020 with debts, unfunded liabilities and derivatives of around $2.5 quadrillion. This is a sum that is impossible to fathom but if we say that it is almost 30x global GDP, it gives us an idea what the world and central banks will have to grapple with in the next few years.

THERE WILL BE NO V OR U RECOVERY

No one should believe for one moment that once CV is gone we will experience a V shaped recovery. There will be no V, there will be no U and nor will we see a hockey stick recovery. What few people understand, including the so called experts, is that there will be no recovery at all. An extremely rapid decline of the world economy has just started and will be devastating in the next 6-12 months, whether CV ends soon or not.

CORONAVIRUS CASES EXPONENTIALLY HIGHER THAN RECORDED

There always had to be a catalyst to trigger the inevitable end to the biggest economic bubble in history. Catalysts are normally a financial event like a default of a financial institution. But this time the world could not have been hit by a worse event than Coronavirus. In just over one month the disease has spread like wildfire all around the world. Currently there are almost 900,000 identified cases and 43,000 deaths. The problem is that the number of cases are only a function of how many have been tested. Since most countries only have a limited number of test kits, the real figure of infected people is most probably exponentially higher than 900,000. CV was discovered in Wuhan back in November 2019. The disease most likely spread a lot faster around the world than anyone realised since no one was tested for a long time and still today very few are tested.

LOCKDOWN WILL BE DEVASTATING

The effects of CV have been to shut the world down for an unknown period. With schools, shops, hotels, airlines and factories etc closed, most countries are not producing anything currently. This total lockdown will not only be devastating for the world economically. It could lead to more people suffering due to hardship, famine and health problems with lack of essential items like medicines and food, rather than from CV itself. I pointed this out already 3 weeks ago but politically and humanely this solution has not been considered acceptable.

What the world is now encountering is the perfect storm. That the debt infested global economy would one day come to an abrupt halt has been clear for a while as I have written in many articles. But instead of a gradual downturn, the world economy is now going to experience a fast and devastating collapse which will lead to a decline in real terms of most assets like stocks, property and debt by more than 90%. Real terms means measured in constant purchasing power like gold.

In the Dow for example, we have just seen on the quarterly chart, a downturn in the MACD indicator from a very high level. This is a very important trending signal which indicates that we are likely to see at least 10 years downtrend in stock markets. The alternative is that we will see a very rapid decline in the next 6-24 months and then the index going along the bottom for a decade or more.

UNLIMITED MONEY PRINTING HAS STARTED

Central banks around the world have so far committed $12 trillion of direct support via money printing. In addition global fiscal stimulus or tax reductions of $5 trillion have been committed by governments. But these amounts are just a drop in the ocean. Just take a company like Volkswagen. They are now experiencing a cash drain of $2.2 billion per week. If we multiply that by factories and businesses around the world plus assistance to individuals, we will soon see liquidity requirements of $10s followed by $100s of trillions as the financial system implodes.

If we take the Fed as an example, it has cut rates to zero and already expanded its balance sheet by $700 billion to $5.5 trillion since September 2019. Another $2 trillion have been committed but that is just the start. Just to remind ourselves, during the 2006-9 crisis the Fed’s balance sheet only grew by $1.2 trillion to $2 trillion in 2009. We will most likely see the balance sheet grow by $ trillions in the next few weeks.

AFTER US THE FLOOD

Surging national debts and unlimited money printing has always been the inevitable end to periods of excesses. We are now seeing not only the end of a 100 year cycle since the Fed was created, but also the end of a 300 year cycle since John Law and the Mississippi Bubble in France in 1716-20. We could even be at the end of a 2,000 year cycle from the Roman Empire but that only future historians will know.

In 1757 France lost a war against Prussia. The French king Louis XV had a mistress called Mme de Pompadour. When France lost the war she said to the king: “Après nous le déluge” – After us the flood, meaning that the loss of the war would mean chaos and destruction for France. And it did of course as 30 years later the French Revolution took place.

The situation is now the same, with Powell and Lagarde flooding the world with worthless money and the people virtually drowning. Many countries are likely to experience social unrest and possibly also revolutions.

TEXTBOOK END TO AN ECONOMIC ERA

The end of the current cycle is textbook. Bubbles everywhere, major problems in the global economy with economic and financial pressures plus a pandemic that has hit the whole world, all simultaneously.

Next come pressures in the currency system as all currencies are debased. They will all reach their intrinsic value of zero, but not quite at the same time, as central banks flood the world with unlimited amounts of money.

Hyperinflation will follow and then a collapse of the financial system as we know it today. No one must believe that SDRs (Special Drawing Rights) issued by the IMF will make any difference to a bankrupt system. SDRs are just a different form of paper money and a reset based on new SDRs issued will have a life of a few months maximum before it all collapses again. The next reset thereafter will be disorderly and dramatic as central banks lose total control.

THE EUROPEAN DISUNION – ED

Just a few words about the EU. It is no longer the European Union but the European Disunion – ED. All the illusions of grandeur have gone and each ED country is now fighting for its own survival. There is no coordination and no cross border assistance in connection with Coronavirus. Italy, Spain and France are on the verge of collapse but are getting no aid from Germany. The European banking systems under massive pressure and will most probably fail or be seriously impaired in the next 6-12 months.

So we are looking at a truly global crisis which will have irreparable repercussions for the world for a foreseeable future.

END OF PAPER GOLD MARKET NEAR

Another piece of the perfect storm is the physical gold market. The three largest gold refiners in the world closed down their factories a week ago. These three are based in the Canton of Ticino which is the Italian part of Switzerland.

They produce more than 50% of the gold bars in the world. These refiners are closed until further notice on the order of the local government in Ticino. This is due to the Coronavirus. Ticino is on the border to Italy and the majority of the workers are from Italy. The management of these refiners do not know when they can reopen and it could take a long time.

So with physical gold demand being unprecedented and with very little supply or stocks available, we are very soon likely to see the physical and paper gold market going separate ways. Who would like to own even 1 ounce of paper gold when there is no physical supply and many hundred times more paper gold outstanding than available physical gold. The paper gold market can break at any time. If I owned paper gold or a gold ETF (which I naturally don’t) I would ask for delivery on Monday. The whole paper gold market is a total illusion like most markets today. There is zero underlying value. Time will very soon reveal that the paper gold market is just standing on a foundation of quicksand.

For anyone who doesn’t own physical gold, I suggest to acquire gold at virtually any price. You cannot buy physical gold at the paper gold price you see on the screen. You can of course buy unlimited paper gold at that price but that will soon have zero value. Our company is fortunate to still find physical gold for our clients but that situation will not last if the refiners don’t start producing soon.

To make it very clear, the screen price for gold bears no resemblance to reality. If you can get hold of gold buy it now without worrying about the markup. Silver is even worse. There is no physical silver available in large amounts. Whatever smaller amounts are available can fetch a 100% premium.

As the world is now entering the Dark Years that I wrote about many years ago, remember that the most important thing is helping family and friends as well as our health.

In late January we asked whether a prolific Chinese scientist who was experimenting with bat coronavirus at a level-4 biolab in Wuhan China was responsible for the current outbreak of a virus which is 96% genetically identical – and which saw an explosion in cases at a wet market located just down the street.

For suggesting this, we were kicked off Twitter and had the pleasure of several articles written by MSM hacks regarding our ‘conspiracy theory’ – none of which addressed the plethora of hard evidence linked in the post. These are the same people, mind you, who pushed the outlandish and evidence-free Trump-Russia conspiracy theory for years.

Whether or not the virus was engineered (scientists swear it wasn’t) – it shouldn’t take Perry Mason to conclude that a virulent coronavirus outbreak which started near a biolab that was experimenting with — coronavirus — bears scrutiny. Could a lab worker have accidentally infected themselves – then gone shopping for meat at the market over several days, during the long, asymptomatic incubation period?

In February, researchers Botao Xial and Lei Xiao published a quickly-retracted paper titled “The possible origins of 2019-nCoV coronavirus” – which speculated that the virus came from the Wuhan biolab.

Now, mainstream outlets are catching on – or at least have become brave enough to similarly connect the dots.

Earlier this week, Fox News‘ Tucker Carlson suggested that COVID-19 may have originated in a lab.

Tucker Carlson is currently citing a report that he openly admits he can’t confirm is true to question if coronavirus was made in a lab pic.twitter.com/CTxrJtw0Sh

— Andrew Lawrence (@ndrew_lawrence) April 1, 2020

And now, the Washington Times is out with a report titled “Chinese researchers isolated deadly bat coronaviruses near Wuhan animal market.”

Chinese government researchers isolated more than 2,000 new viruses, including deadly bat coronaviruses, and carried out scientific work on them just three miles from a wild animal market identified as the epicenter of the COVID-19 pandemic.

Several Chinese state media outlets in recent months touted the virus research and lionized in particular a key researcher in Wuhan, Tian Junhua, as a leader in bat virus work.

The coronavirus strain now infecting hundreds of thousands of people globally mutated from bats believed to have infected animals and people at a wild animal market in Wuhan. The exact origin of the virus, however, remains a mystery. –Washington Times

“This is one of the worst cover-ups in human history, and now the world is facing a global pandemic,” said Texas GOP Rep. Michael T. McFoul – a ranking member of the House Foreign Affairs Committee. McFoul believes China should be held accountable for the outbreak.

Meanwhile, a video from December funded by the Chinese government shows Tian collecting samples from captured bats and storing them in vials.

“I am not a doctor, but I work to cure and save people,” said Tian, adding “I am not a soldier, but I work to safeguard an invisible national defense line.”

The mainstream theory behind the virus is that it crossed over to humans after first infecting an intermediary species – such as a pangolin.

Read the rest of the report here.