Month: August 2022

By Vincent Cignarella, Bloomberg markets live commentator and reporter

Is the US at full employment and we just don’t know it yet?

The ratio of full-time workers to part-time workers is at a near 20-year high. It may be turning, and a drop in the ratio may spell peak inflation as companies adjust to cut costs. That’d mean a better environment for stocks and bonds going forward.

If the ratio falls, it likely means companies are either looking to replace higher paid full-time workers with less expensive part-time employees or they are seeing declining sales. Either way, it is a sign of rising costs and an attempt to lower them or a slowing economy.

Both scenarios could prompt a Fed pivot. A slowing economy and peaking inflation are the signs the Fed needs to see in order to pause rate hikes.

 

By Peter Tchir of Academy Securities

On “bitcoin infinity” day (apparently 8/21 is symbolic of ∞ infinity, the projected value of bitcoin) divided by 21,000,000 (the total number of bitcoin that can ever be mined), it seemed like a good time to explore what a crypto crash would look like and what it would mean for markets and the economy.

We all know what a mortgage bank collapse looks like (Washington Mutual). We’ve seen broker dealers collapse (Lehman), we’ve seen the stress on the system when money center banks and insurance companies come under intense pressure. Heck, we’ve even endured a sovereign default (Greece). We’ve also experienced flash crashes in equities and bond yields.

In all those cases, I would argue that having a gameplan ahead of time allowed companies and investors to profit from the events (both positive and negative). I haven’t seen much on what a crypto crash would mean, so I figured we could examine that today.

Jackson Hole

I could have written the 900th Jackson Hole primer, but I couldn’t bring myself to do that. I’ve already covered a lot that is applicable to Jackson Hole in Taxi Strategies, Orwellian Moments, Things You Won’t See, and Inversion and Inventories.

My focus right now is pretty simple:

• What is the real story on jobs?
  • The weak data is a more accurate sign of the current situation.
• How bad is the inventory build?
  • I think it might be the worst we’ve seen in my lifetime.
• Is the wealth effect a problem?
  • I think that the concentrated nature of the wealth effect in disruptive stocks and crypto is different than anything else we’ve experienced historically, and the housing sector weakness is ominous to me.
• Inflation Fighting.
  • Be careful what you wish for is all that comes to mind. Time and again, lower commodity prices have accompanied stock prices as they became much lower as well and I’m not sure why that will be different this time.

Anyways, let’s get back to being off topic and discussing a crypto crash.

6 Impossible Things Before Breakfast

I cannot come up with 6 impossible things before breakfast, but as the Queen suggested to Alice, you do need to practice.

Let’s start with the premise of a crypto crash or crypto collapse. If it is impossible, then there is no point even thinking about it. However, not only is it possible, but I put the possibility of it occurring in the next year at 10% or higher. Still unlikely, but a high enough probability that I should think about what it would mean.

Why a crypto crash or collapse seems possible:

• It has already happened. Luna/Terra is gone. Poof. XRP is down 80% from its highs, Cardano is down 85%, Bitcoin Cash (you got to love the name) is down 91%, and Dogecoin is down 90% as well. Dogecoin was allegedly started as a joke, which makes it all the more ironic (or moronic) that an SNL skit helped pump it to the moon. So, collapses and crashes have occurred in some segments of the market, which alone tells me that it is worth exploring more.
• This chart is precarious.

• Bitcoin continues to hover near levels that would ensure that no “hodler,” or someone who buys crypto and will never sell (diamond hands as opposed to lettuce hands), has made money on any purchase in almost two years. That is a long time to wait to make money (or to sit on large losses). FOMO is a big part of crypto trading, and we are on the precipice of declining to levels where many could decide to take their money and run. There is an ongoing theme in crypto that the “whales” keep buying dips, which might be possible, though it seems more likely to me that many have decided to lock in massive amounts of wealth into the much maligned (but useful) “fiat” currency. Crypto bounced here recently, but that was just the first test and I suspect that there were some heavily incentivized holders who went out of their way to support the price (there really are no rules in this space). This chart, by itself, doesn’t convince me that a crash is possible, but when I highlight the other issues, it certainly adds to that overall theme that a crash or collapse is a non-zero probability event.
• The chart isn’t much better.

 

• The $13.5 billion trust, GBTC, is currently at a 32% discount to NAV. This isn’t an ETF, so it has the ability to trade at a discount or premium to NAV for extended periods. A 33% discount lets you buy bitcoin at the equivalent of under $14,000 ($21,000 * 67%). There is, to some extent, over $4 billion in “free” money in this stock if the discount closes to 0. It is bizarre and scary to me that the discount continues to widen. In ETF’s, I believe that discount/premium to NAV leads the way (cheapness begets lower prices and vice versa). While that view doesn’t quite translate given the nature of GBTC, it is cautionary to me.
• A lack of interest. Recently one of the largest asset managers on the planet announced plans to collaborate with one of the largest public companies focused on crypto to work on some crypto projects. Two years ago, I can only imagine the impact that headline would have had on bitcoin. My guess is $10k in a heartbeat, but we are already back below the price when that deal was announced. Every headline like that (a year or more ago) was met with thousands (if not millions) of social media posts touting ADOPTION! While adoption is growing and more big banks have announced crypto strategies, the response seems to be more like “well, of course they are going to see if they can make money in it” rather than “OMG, XYZ just endorsed crypto, BUY!” Subtle shift in response, but an important one (albeit subjective).
• The best “use” cases are diminishing. China, to me, has always been the best use case. A large population with enough money to matter. For all the talk about banking the unbanked, etc., which sounds nice, this isn’t what will drive crypto prices higher. There are stats saying that as many as 4 billion people are unbanked across the globe. According to the World Bank, about 700 million people make less than $2.15 per day. That is depressing, scary, and almost mind-boggling, but from the crypto perspective, it is not the poor that will drive prices (there just isn’t enough money). But China, where millions of “middle class” citizens exist under a regime where they may want to keep money outside of the system, it has always been a good use case. With the property market in tatters, a slowing economy, and the government continuing to crackdown on crypto (outside of the digital Yuan), that use case may be dropping rapidly. Sanction avoidance as a use case may also be diminishing. If you were illicitly trading embargoed products (like oil), crypto may have been the “currency” of choice. But with the U.S. looking to ease restrictions on places like Iran and Venezuela (hypothetically), maybe some of the alleged trade will come back onto the books. With China and India openly buying Russian oil and Chinese currency gaining in stature (at least amongst some nations), there is less reason to use crypto when the Yuan is about 10 times less volatile than bitcoin (30-day vol of 5.4 versus 53). Criminal activity still flourishes, though the ability to track and reclaim ransomware payments seems to be increasing.
• It’s about blockchain and blockchain technology. The number of pundits, experts, and companies that seem to be doing contortions to pitch themselves as blockchain rather than crypto is high. Again, this is subtle, but it seems that re-positioning oneself as blockchain rather than crypto is occurring, which doesn’t bode well for crypto.
• It’s a Ponzi scheme, but it’s our Ponzi scheme. There were always the slogans that accompanied crypto, like “have fun staying poor” but they often included passionate explanations about the greatness of crypto. The use cases would take up pages including such themes like it is banking the unbanked (already discussed), that it is an inflation hedge (hasn’t worked on that front for some time), that it is outside the reach of the government (it is being regulated more by the day, and many in crypto, after some recent highly visible failures, now seem to embrace this), that it is lower cost (costs remain high and there is little protection against mistakes or fraud, unlike with bank accounts or credit cards), or speed (but how many people really need to instantaneously shift large amounts of money, but aren’t already served by Venmo or Zell or some similar product?) I still see those arguments being made, but with far less enthusiasm. However, there is another “use case” that seems to be getting traction (at least in my social media streams). It basically amounts to the argument that convincing more people to participate will help. Kind of like “adoption” but with a more cynical tone. Basically, it is admitting that it only really works if more people get in (so get in, and get more people in). It has the advantage of being true and seems honest, but it seems like the last vestige of a pump and dump scam.

I’m not sure about you, but that is enough for me to at least take a look at what a crypto collapse or crash would mean.

Crypto Market Cap

Let’s start with the market capitalization of crypto currencies as that is the most obvious and direct hit to investors. We will use coinmarketcap for this section (beware of using the link as it will ask to send notifications, know your location, etc., but I figured there should be a link to something to verify).

• Bitcoin at $21,262 has a market cap of $406 billion.
• Ethereum at $1,628 has a market cap of $199 billion.
• Binance Coin at $286 has a market cap of $46 billion.
• Then XRP, Cardano, and Solana come in between $13 billion and $17 billion.
• Dogecoin, Polkadot (love the name), and Shiba Inu are all about $7 billion, with Avalanche, Polygon, TRON, and Uniswap, all a bit over $5 billion.

Let’s call it about $750 billion in total market capitalization for crypto.

To make things “simple” let’s assume that after the top 3, most of the coins could disappear and people would hardly notice (I’m assuming that many of those coins are not widely held, and a few “whales” would lose a lot, but the average person wouldn’t lose much more than what they are already prepared to lose.) If you believe that this is an area where many have spent their “winnings” or took money made in bitcoin or Ethereum to really roll the dice (which I believe), that gives us further reason to argue that the hit here would be minimal on the economy (it also makes the analysis much easier as we only have to focus on a few key currencies).

Stablecoin Market Cap

We need to also consider the stablecoins. Terra/Luna was supposed to be a stablecoin. Stablecoins, in theory, are backed by assets of some sort, except those that were algorithmically backed (whatever that means).

Tether (USDT) is still the biggest at $67 billion. I love how much everything is made to sound like dollars (USD) despite the rhetoric against fiat. This stablecoin, in particular, attracts a lot of negative posts about how it is backed. The company asserts that Tether is backed by T-bills, commercial paper, etc., but to my knowledge, it has never produced a detailed list of its holdings, let alone an audited list of its holdings. This behemoth of an account ($67 billion is large even in money markets) is unknown by any money market participant I speak to (albeit that is only a handful of people outside of Academy’s strong short-term liquidity desk). Someone recently pointed out that they apparently manage that much money without a Bloomberg terminal account (there is no Bloomberg account linked to a company called “Tether,” but they could use a different name on Bloomberg to obfuscate their existence, which isn’t unheard of). Tether has seen their market cap drop from $82 billion to $67 billion, and part of that could be that some investors, given what has gone on this year, have shied away from it.

USD Coin or USDC (again, notice how much it tries to sound like the dollar) has a market cap of $52 billion. Its market cap only peaked at $55 billion, so it has gained at the expense of USDT. Circle, which is the company behind USDC, makes a big deal out of being transparent and regulated in the U.S. I’ve had brief conversations with people involved in the company and the pitch makes sense to me (though I have not yet gone through the effort of figuring out how granular that transparency is – that’s a project for another day). But they are clearly marketing themselves on the transparency issue and have surged relative to Tether over the past year or so.

Binance USD (BUSD) weighs in at $18 billion and is a distant third and seems relatively tied to the Binance ecosystem.

Vegan hotdogs. When I see all these names trying so hard to associate themselves with the dollar despite being part of an ecosystem designed to avoid the dollar, I can’t help thinking about vegan hotdogs and why vegans try to replicate an already weird food, when vegan food in its own right can be awesome! But I digress.

My view is that stablecoins and their market caps are a function of the overall utility of cryptocurrencies. If crypto crashes, we should see a decline in the market cap of stablecoins.

Two things could occur:

• Those backed by assets will have to sell the assets to meet redemptions. If it is a few billion and they are back by T-bills, then no sweat. Markets would digest that easily and no one would be impacted. But if the size is bigger (10s of billions) and the assets are less liquid (non-standard commercial paper programs for example) then we could see some friction in markets. Again, if we knew exactly what they held we could be more or less prepared. What they hold and the size of the selling would impact the knock-on effects of any unwind (Terra/Luna held nothing, so that didn’t spread to the greater financial system, but this could).
• If the stablecoins don’t truly hold sufficient assets or the assets are of low quality (there are all sorts of conspiracy theories out there on what it might be invested in that isn’t worth me repeating here, even if they intrigue me) then we could see what looks like a “bank run” occur not just in stablecoins, but ultimately in the assets they hold and asset classes that compete with what they hold. Let’s just pretend, for the moment, that they have money market lending that is off the radar screen, and presumably paid a lot, as it wasn’t standard. If they have to sell, that could cause prices to plummet, possibly to a level that more traditional players sell what they have to buy this stuff, creating that first domino effect.

There is a circularity between crypto and stablecoins. They can bring each other down.

While crypto losses themselves will be largely isolated to the holders (we still have to dig into that), the unravelling of stablecoins is likely to influence other markets, possibly quite negatively.

Direct Losses

The direct losses are relatively easy to figure out.

• Crypto losses. Let’s say $500 billion could be wiped out of crypto. While some evidence points to there being a small subset of “whales” that would bear the brunt of that loss, I think there is a broad enough swath of the population that would take a serious hit and it would affect spending in the near-term.
• Stablecoin losses. Stablecoins in theory should have an orderly unwind. If, and that remains a question, there is a disorderly unwind of one or more stablecoins, the losses would be in the 10’s of billions (which isn’t so bad). The problem is that unlike crypto losses, where investors presumably treated this as a risky portion of their portfolio, stablecoins are viewed as cash equivalents. Losing cash is always more problematic than losing risky investments. Something to watch.
• Public Company Losses. There are at least a couple of public companies that are linked to crypto. Then there are the miners, mostly listed on foreign exchanges. HIVE for example went from almost $2 billion to just over $400 million (higher than the recent lows of $237 million). Not a huge market cap loss, but only one of many miners out there. This would add up to more losses, some of which would hit mainstream funds. The bigger losses would likely be felt in the private domain as many of the companies in the space have not yet made the leap from private equity to public equity. The losses shouldn’t be material to the broader market, but would likely be concentrated enough to leave a mark disproportionate to the size of the losses. On the private equity side (even more than the public side) the losses will hit employees the hardest and that will hit spending.
• Jobs.
  • If you consider day trading crypto and waiting for NFT drops to be a job, then there will be job losses.
  • The companies I’ve mentioned, both the public and private ones, will be forced to let go of employees (that already will have lost significant paper wealth). These are skilled employees, so in theory, could find other jobs, but that could be more difficult to do in an environment where crypto losses cause investors (including private equity) to be more conservative across the fintech space.
• Domino or knock-on effects. Assuming the stablecoins hold liquid assets, that unwind should be handled easily (there is a risk that isn’t the case, at least for some stablecoins) but I won’t harp on it. There is not a lot of direct debt tied to crypto (though there are some bonds out there, but they are too small to have any material impact). I don’t see crypto being used as a major source of collateral. If bitcoin holdings, for example, were being used to leverage up stock investments, then I’d be very scared. I think some individuals may manage their personal wealth along those lines, but I don’t see it as a widespread issue (unlike housing in 2008, for example).
  • Spending. How much spending is coming from this sector and what does that mean for us?

Spurious Correlation or Real Threat

You can take any two data series and potentially see a correlation. They may have nothing to do with each other, so we can stare at the “correlation” chart as long as we want, but it isn’t going to help us because there is no causation. Complicating matters further, we should be looking at correlations between the rate of change rather than correlations between asset classes themselves (I vaguely remember the reasons for this, but I will ignore that technicality for today).

Here is the SOX (Philadelphia Semiconductor Index) versus bitcoin. I chose to use this index because it is more likely to be spurious and highlights how much more correlated some individual semi-conductor stocks are.

Spurious correlation. The argument for “spurious correlation” is strong.

• It seems impossible that a small segment of the market, like crypto, could have a large effect on such a big diversified market.
• Many of the things that drove crypto were also driving other industries that placed huge demands on the chip industry (video conferencing, autonomous driving, big data, etc.). So crypto was just one of many things driving those industries and those industries should not be impacted by a crash in crypto.
• I could go on, but I can see heads nodding here, so I won’t spend any more time arguing what is a consensus (and probably correct) view.

What if it is correlated?

• The wealth being generated by those in crypto was large. From the miners to the “exchanges,” there was a race to capture revenue and there was plenty of revenue to capture. The spending on chips (rigs to mine, servers to provide customer service, etc.) was large. Chip companies presumably saw this demand and knew that they could charge a premium to an industry where speed and timeliness meant everything. Were chips designed specifically for the crypto industry? Was production of generics shifted to higher profit margin lines? Not only were the companies (that succeeded) spending money, but many failed business ideas (or those just not yet successful) had money to spend as well.
• What if crypto spending went to web services (seems like it would). What if it went to advertising? (It did). What if that spending caused those companies to spend more? Maybe they needed to add systems, components, and people to keep up with the demand from the crypto industry. Did that spending then create more spending and make it very difficult (if not impossible) to figure out where crypto spending ended and where “regular” spending went?
• How much money was crypto spending on energy? At one time I saw stories that in terms of energy usage, crypto, if treated as a nation, would have been the 10th largest country in terms of energy use. Commodity prices are always affected by the marginal 5% or 10% of demand. Is it possible that part of energy inflation was due to crypto? Does that mean policy makers are responding to a problem (high inflation) while ignoring one of the causes (because it isn’t on their radar screen, except in China, which has been clamping down on mining in that country?)

The case for crypto being a bigger driver than previously thought may seem weak, but I cannot help but believe that it is a risk we should be discussing more than I think we are.

What if the correlation was a driver for exciting new technologies where enormous wealth seemed possible (to such an extent) that current spending or success was irrelevant? What if crypto’s decline and potential collapse may not be causal, but is correlated to some broader move in markets and the economy? Then in that case, it might be spurious, but is still dangerous.

Impossible Things, Black Swans, and Thinking Out of the Box

I do not think a crypto collapse is impossible. It isn’t my base case, but there is a real possibility that it occurs.

Black swans are things that people didn’t think were possible (and turned out to be possible). We can get a pass on missing black swans, but not if we are looking at a grey swan and choose to ignore it.

I’m not lying awake at night thinking about a crypto collapse because:

1. It “probably” won’t happen.
2. If it does happen, the damage to the economy “could” or maybe even “should” be minimal.

But I am thinking more and more about it because if there is a correlation between crypto and the broader economy (and markets) or because crypto, the broader markets, and the economy are moving to the same theme, there is serious risk to the downside. Some of this risk may not be getting priced in based on some simple charts of crypto versus other asset classes. On this broader correlation theme, check out ARKK shares outstanding because something seems to have shifted in terms of the investor mentality there.

For those who celebrate, enjoy bitcoin infinity day! It really seems weird that not only is that a thing, but on 8/21/21 the CEO of a public company enjoyed tweeting it out. I’m possibly too old and jaded, but stuff like that seems silly rather than compelling.

Discussions about the relevance and viability of renewable energy are often limited to solar and wind, two types of power sources that have risen to prominence since the turn of the century. 

Hydropower and its role in certain countries’ electricity generation are often overlooked, even though even so-called developed nations like Norway, Austria and Canada generate sizeable shares of their electricity via hydropower plants.

However, as Statista’s Florian Zandt shows in the inforgraphic below, based on data from BP and Ember collated by Our World in Data, Africa and Latin America and the Caribbean, in particular, rely heavily on water power.

You will find more infographics at Statista

For example, the Central African Republic, the Democratic Republic of the Congo, Lesotho or Ethiopia generated almost 100 percent of their electricity with hydropower in 2020. The latter started construction on the Grand Ethiopian Renaissance Dam in 2011, a project expected to produce 5.15 gigawatt once finished, making it the biggest dam on the continent.

In the southern half of the Americas, Venezuela’s electricity mix consisted of 82 percent water power owed in no small part to the Guri dam with its installed capacity of 10.2 gigawatts. Ecuador, Guinea, Costa Rica and Panama also primarily rely on hydropower for electricity with shares of 78, 71 and 66 percent, respectively.

When looking at the total energy mix, hydropower takes a backseat to emission-heavy fossil fuels. In 2019, it amounted to a share of just seven percent worldwide, according to Our World in Data. Due to the high reliance on oil and gas for heating and transport, it’s unlikely this centuries-old power source will become a contender in primary energy generation. Generating power via methods like hydroelectric dams also has other drawbacks. Funneling rivers into reservoirs can impact the habitats of some aquatic species and upset the balance of river ecosystems, as well as necessitate rehoming of residents dependent on said rivers.

Authored by Paul Joseph Watson via Summit News,

Facebook has deployed one of its infamous ‘fact checkers’ to suggest that the completely accurate claim that the IRS is seeking to arm more agents to use deadly force was “partly false information.”

Earlier this month, an IRS job posting was uncovered that announced the agency was looking to hire people who are ready to kill.

The job ad listed one of the “major duties” of IRS agents to be able to “carry a firearm and be willing to use deadly force, if necessary.”

The IRS subsequently deleted the job posting after it stoked controversy, but then a 2021 IRS annual report also came to light which showed heavily armed agents simulating an assault on a suburban home as part of their training.

When the Heritage Foundation and Young Americans for Liberty (YAL) posted about the issue on Facebook, the Big Tech giant, relying on a ‘fact check’ carried out by Lead Stories, slapped a warning label on posts that said they constituted “partly false information.”

Fact checks have the effect of basically blacklisting content on Facebook, burying it in the algorithm and preventing large numbers of people from viewing the content.

‘Fact Check: IRS Is NOT Trying To Arm All Its Agents’ shouted the headline of the article by Lead Stories.

However, as Christina Maas notes, “The Heritage Foundation never said the IRS was arming all of its agents.”

“In its article, Lead Stories singles out pro-liberty youth organization Young Americans for Liberty (YAL). The youth group posted a screenshot of the original job posting, and wrote: “The IRS is hiring! The government wants its IRS agents armed and its citizens disarmed. We’ll let everyone just marinate on that for a second.”

“Lead Stories tried to make it look like YAL said the IRS is arming all of its employees. “Is the IRS trying to arm all its employees?” asked Lead Stories. “No, that’s not true: A job posting from the IRS Criminal Investigation unit, which carries firearms, does refer to carrying firearms.”

As ever, fact checkers pedantically select a piece of language that was used (or not even used at all in this case) which might be slightly exaggerated to then declare that the entire story is “false information,” when it isn’t, it’s overwhelmingly true information.

As we previously highlighted, fact checkers used by Facebook previously declared the Hunter Biden laptop story to be “Russian disinformation.”

We also reported on how 11 ‘fact checkers’ are demanding that YouTube censor more videos for “misinformation,” with one of the reasons being that no one is content produced by fact checker groups.

Back in June, USA Today, which is used as a ‘fact checker’ by social media platforms, was forced to delete 23 articles from its website after an investigation found one of its reporters had fabricated sources.

*  *  *

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Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. National Institutes of Health (NIH) has ended a subgrant to the laboratory in China located where the first COVID-19 cases were identified in 2019.

U.S.-based EcoHealth Alliance was granted $3.7 million, starting in 2014, to study bat-related coronaviruses. It conveyed some of the money to the Wuhan Institute of Virology (WIV), located in China.

The grant was renewed in 2019, but suspended in 2020 because of concerns the grantees were failing to comply with conditions attached to the money.

The NIH’s review of the concerns has concluded, Dr. Michael Lauer, an NIH deputy director, revealed in a letter on Aug. 19. It determined that all of the problems cannot be fixed.

Therefore, the NIH informed EcoHealth Alliance that the subaward to the Wuhan lab is terminated “for failure to meet award terms and conditions requiring provision of records to NIH upon request,” Lauer wrote to Rep. James Comer (R-Ky.), the top Republican on the House Oversight Committee.

‘Cannot Be Remedied’

Grants from the U.S. government come with certain conditions, including timely reporting of results, and adequate monitoring of experiments.

The EcoHealth Alliance failed to perform a review of the research conducted under the grant, which included making bat coronaviruses more dangerous, the NIH said in October 2021. The agency in January said EcoHealth Alliance failed to comply with other conditions with the grant, R01AI110964, and other awards.

The NIH asked for plans to correct the failures, which was provided on Feb. 4, Lauer said Friday, and the NIH determined that the plans were sufficient.

Separately, though, the NIH asked EcoHealth in late 2021, and again in January, for lab notebooks and original files from the research conducted at the Wuhan lab. It has not received them, according to the new letter.

EcoHealth executives have said that it passed along the request but have not heard back from WIV.

The refusal to provide the materials led to the just-announced termination of the subaward.

“NIH has determined that WIV’s refusal to provide the requested records, and EHA’s failure to include the required terms in WIV’s subaward agreement represent material failures to comply with the terms of award,” Lauer told Drs. Aleksei Chmura and Peter Daszak, the executives, in a letter released on Friday by Comer. “NIH has further determined that in these circumstances, WIV’s refusal to provide records cannot be remedied by imposing additional conditions, and that a partial termination of award (i.e., termination of the subaward to WIV) is the only appropriate action.”

EcoHealth did not respond to requests for comment. An email sent to the Wuhan lab bounced back.

Will Keep Funding EcoHealth

The NIH is not terminating any of the awards in question, R01AI110964, 1U01AI151797-01, and 1U01AI153420-01—at least for now.

When grantees are not compliant with requirements, the preference is to work with them to bring them into compliance rather than termination, Lauer said.

EcoHealth has successfully implemented the NIH-approved corrective plans for the latter two awards, according to the NIH. While EcoHealth will be forbidden to dole money out to WIV under the other grant, it will be able to renegotiate the objectives of the grant with the National Institute of Allergy and Infectious Diseases, led by Dr. Anthony Fauci.

If an agreement is reached, the revised grant will move forward. If it is not, the grant may be terminated.

EcoHealth was asked to outline within 30 days how it will accomplish the purpose of the grant without WIV. That will require a change in scope but the change may not depart significantly from the original project, Lauer said.

Read more here…

A startup company called StoryFile has pioneered a new product that allows deceased people to address mourners at their funerals through the power of artificial intelligence.

Known as the ‘digital afterlife’ industry, StoryFile uses 20 cameras while asking a person 250 questions before death. This data is then fed into software that creates a so-called digital clone of that person. 

Marina Smith, an 87-year-old woman who passed in June, was given a chance to use StoryFile. Smith’s Los Angeles-based son Stephen is the company’s founder and shocked funeralgoers by creating an interactive illusion of her on a screen during the memorial service:

“Mum answered questions from grieving relatives after they had watched her cremation,” Stephen told The Telegraph.

“The extraordinary thing was that she answered their questions with new details and honesty,” he added. “People feel emboldened when recording their data. Mourners might get a freer, truer version of their lost loved one.”

Earlier this year, a digital copy of former Screen Actors Guild president Ed Asner was made possible at his funeral by StoryFile. Axios reported mourners “conversed” with the holographic representation of Asner.

“Nothing could prepare me for what I was going to witness when I saw it,” Matt Asner, the actor’s son, said last month.

Asner added that some funeralgoers were “creeped out” because it was almost “like having him in the room.” 

The digital afterlife industry is just taking off. Amazon has decided to jump into the game by providing an experimental Alexa feature that learns the voice of a deceased loved one. 

Even Microsoft has acquired patented technology using social media posts to reincarnate people as “chatbots.” 

Authored by Zachary Steiber via The Epoch Times (emphasis ours),

Entities with COVID-19 vaccine mandates that don’t pay heed to the new Centers for Disease Control and Prevention (CDC) guidance will face lawsuits, a civil liberties lawyer says.

“We don’t have a new lawsuit in the works yet. But if we see that colleges and universities and public employers are not responding to the new CDC guidance the way that they should be, then we would certainly tee up a new lawsuit,” Mark Chenoweth, president and general counsel at the New Civil Liberties Alliance, told The Epoch Times.

The response to the updated guidance should be, at a minimum, a lifting of mandates for people who have recovered from COVID-19, he added.

Such people have a high level of protection against severe illness and death, according to a number of studies. Many studies indicate the protection is higher than that of the COVID-19 vaccines—including one study funded by the CDC.

The CDC issued updated guidance on Aug. 11, stating in part that risk for illness from COVID-19 “is considerably reduced by immunity derived from vaccination, previous infection, or both” and that “persons who have had COVID-19 but are not vaccinated have some degree of protection against severe illness from their previous infection.”

The public health agency rolled back quarantine recommendations for people, regardless of vaccination status, citing the high amount of immunity in the U.S. population from vaccination, prior infection, or both.

Since virtually all entities that have imposed mandates have cited CDC guidance, the entities won’t be able to argue they aren’t aware of the updated guidance, according to Chenoweth.

That means any institution that doesn’t alter or rescind its mandate in light of the update “is ripe for a lawsuit,” he said.

“Because the thing that the judges have said so far is that it was rational for these employers to follow CDC guidance, but now the CDC guidance is different. And if they’re now going forward with these mandates for example, against people who have natural immunity in the teeth of the CDC guidance on that question, then I think it’s going to be much harder for them to win even a rational basis challenge to their policies.”

Suits

The New Civil Liberties Alliance has brought lawsuits against Michigan State University (MSU), the U.S. government, Fairfax County Public Schools, George Mason University, and Rhode Island officials over mandates that the legal group says are illegal.

They have focused on how entities aren’t granting exemptions to people with proof that they’ve recovered from COVID-19.

While one of the cases won the plaintiff an exemption from the mandate, judges have ruled against many others, often tracing the mandates to CDC guidance.

“Plaintiffs have the burden of negating every rational basis that supports the MSU vaccine mandate, and the Court finds that they have failed to do so,” U.S. District Judge Paul Maloney, a George W. Bush appointee, wrote in February as he dismissed the suit.

“CDC guidance is clear: ‘[V]accination remains the safest and primary strategy to prevent SARS-CoV2 infections,’” he added. “In achieving MSU’s stated legitimate goal of protecting its students and staff from COVID-19, it was plainly rational, in July 2021 when MSU established the policy, for MSU to rely on CDC guidance and require its students and staff to receive the COVID vaccination.”

The CDC has long maintained that vaccination is superior to natural immunity, and urged people with natural immunity to get vaccinated, even though many studies show that natural immunity provides better protection than vaccination and some suggest that people who recovered from COVID-19 are at higher risk of side effects if they do get a vaccine.

Moreover, some experts say getting vaccinated after recovery doesn’t make sense because the increase in protection is negligible, though others say the increase is worth the risk.

Could Have Changed in 2021

Chenoweth said the CDC should have updated its guidance in 2021.

“I think it’s remarkable that it’s taken the CDC this long to come around to admitting the science on this topic. The science was there at least a year ago when we started litigating the issue of whether or not folks with natural immunity should be subjected to vaccine mandates,” he said.

Read more here…

The progressive approach to law enforcement in certain major US cities, supported by George Soros and others, has been a complete failure as residents’ quality of life has collapsed. Soaring violent crime and controversial open-air drug markets plague the downtown areas of San Francisco, Cleveland, and Portland, transforming these areas into wastelands. 

A recent study commissioned by the Institute of Governmental Studies at the University of California Berkeley found that San Francisco’s downtown activity was only 31% this spring (between March and May) compared to pre-Covid levels. Cleveland was at 36%, and Portland was at 41%.

Meanwhile, after the pandemic, Salt Lake City, Utah, Bakersfield, California, and Columbus, Ohio, experienced the most massive booms in downtown activity.

Researchers used data from 18 million smartphone users traveling through America’s busiest metro areas to determine which downtown areas bounced back the most and least. 

What’s striking in the data is that the worst bouncebacks are in liberal-controlled metro areas that have either defunded the police or at least tried, allowed for open-air drug markets, and made shoplifting only a misdemeanor. 

The study’s results are no surprise to readers as disastrous progressive policies ignited a tsunami of violent crime in liberal-controlled cities, resulting in an exodus of the population with migration trends to metro areas where law and order were more stable (such as towns in Montana). 

The common denominator among the metropolises with the smallest downtown activity bouncebacks is controlled by Democrats who endlessly create havoc at the expense of law-abiding citizens. 

However, there is good news. People are waking up from their liberal amnesia and are ousting those who have made things worse for them. 

A perfect example is San Francisco’s chief prosecutor Chesa Boudin who was booted from office this summer. He was backed by Soros and came under fire for failed progressive criminal-justice reform policies that led to a sharp increase in drug overdose deaths, homelessness, and thefts, including smash-and-grab robberies, car burglaries, shoplifting, and other property crimes.

Third on the list is Portland, for the lowest bounceback in downtown activity. This liberal-controlled area is no stranger to readers as the metro area is plagued with soaring homelessness, drug overdoses, and surging violent crime after left-wing protests called for defunding the police. 

The progressive mismanagement of America’s cities has only accelerated post-Covid, resulting in a mass exodus of households and businesses fleeing these hellholes for ones that are safe and economically friendly. The exodus will continue, pushing some liberal cities to the proverbial financial edge as their tax base evaporates. 

America’s cities need a new generation of leaders who will be brave enough to counter decades of failed progressive leadership and inform voters their collapse in quality of life is due to bad policymaking. 

Authored by Hans Von Spakovsky via The Epoch Times (emphasis ours),

In a shocking report, the U.S. Census Bureau recently admitted that it overcounted the populations of eight states and undercounted the populations of six states in the 2020 census.

All but one of the states overcounted is a blue state, and all but one of the undercounted states is red.

Those costly errors will distort congressional representation and the Electoral College. It means that when the Census Bureau reapportioned the House of Representatives, Florida was cheated out of two additional seats it should have gotten; Texas missed out on another seat; Minnesota and Rhode Island each kept a representative they shouldn’t have; and Colorado was awarded a new member of the House it didn’t deserve.

These harmful errors also mean billions in federal funds will be misallocated. Funding for many federal programs is distributed to the states based on population. Overcounted states will now receive a larger share of federal funds than they are entitled to, at the expense of the undercounted states.

The Census Bureau has not explained how it got the 2020 census so wrong. This is particularly troublesome because the bureau reported an error rate of 0.01 percent in the 2010 census—an overcount of only 36,000 people, a statistically insignificant mistake.

The 2020 errors were discovered through the “2020 Post-Enumeration Survey.”

After each census, the bureau interviews a large number of households across the country and then compares the interview answers with the original census responses. The 2020 survey showed that the bureau overcounted the population in Delaware, Hawaii, Massachusetts, Minnesota, New York, Ohio, Rhode Island, and Utah. The largest mistake was in President Joe Biden’s home state of Delaware, which was overcounted by 5.45 percent.

The states whose populations were undercounted were Arkansas, Florida, Illinois, Mississippi, Tennessee, and Texas. The largest error in the undercount was in Arkansas, where the population count was off by 5.04 percent.

The original census reported that Florida needed only 171,500 more residents to gain another congressional seat. Yet the survey shows that Florida was undercounted by over three-quarters of a million people. The bureau also said that Texas needed only 189,000 more people to gain another congressional seat. The survey shows that Texas was undercounted by 560,319 residents.

Minnesota, according to the original census report, would have lost a congressional seat during reapportionment if it had 26 fewer residents; the survey shows the state was overcounted by 216,971 individuals. Similarly, Rhode Island would have lost a seat if the Census Bureau had counted 19,000 fewer residents. It turns out that the state was overcounted by more than 55,000 individuals.

The Associated Press quoted John Marion of Common Cause in Rhode Island admitting that the state would benefit from this mistake, including “more representation in Congress.”

Unfortunately, the federal statutes governing the census and apportionment provide no remedy to correct this problem. And it would be very difficult to devise an acceptable remedy this far after the fact.

The census is geared to providing a count of the population on one specific date, in this case April 1, 2020. A remedy that involved ordering the Census Bureau to conduct another actual recount in the 14 affected states—a complex, expensive undertaking—would provide numbers on a different date than the original census, whose population totals would still be in effect for the rest of the states. This would raise fundamental fairness issues, given the high mobility of our population.

The concept of conducting a new census of the entire nation also seems impractical.

One thing, however, must be done. Congress needs to use its oversight authority to investigate and determine why these errors happened, particularly since they didn’t occur in the 2010 census. Lawmakers should then make the changes necessary to ensure this does not happen again.

Originally published by The Washington Times. Reprinted by permission from The Daily Signal, a publication of The Heritage Foundation.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times or Zero Hedge.

As a wave of catalytic converter thefts intensifies around the country, one would think that cops in major cities would want to make examples of offenders – especially those caught in the act.

One would be wrong… at least when it comes to San Francisco.

At around 3am Tuesday in the city’s Richmond District, witnesses saw a catalytic converter theft in progress and called the cops. A man was backing a stolen Honda Accord into a parking space – the ‘donor’ car – while a second suspect sat nearby in a jeep.

“I woke up to the sound of you know, like, drilling. It was extremely loud,” said resident Morgan Heller, who immediately called police – who arrived in three minutes, according to KTVU.

Jeep guy took off before the cops arrived, but Heller and her roomate kept their eye on the first suspect. Much to their surprise, the cops let him go.

“I heard them say, ‘You are free to go,” said Heller, who said the suspect even asked officers where the closest bust stop was.

“I was like, ‘Why not do the white-glove treatment and just order him an Uber?” asked Heller. “It was embarrassing… The overall assessment is that we have to do better than this.”

Catalytic-converter suspect caught trying to steal device is freed by @SFPDRichmond & given directions to bus stop. “Why not do the white-glove treatment & just order him an @Uber?” incredulous witness asks pic.twitter.com/jNW3BIhdFF

— Henry K. Lee (@henrykleeKTVU) August 20, 2022

Their excuse? Cops told Heller their computer systems were down, so they couldn’t positively ID the suspect, or find the owner of the Honda – so they let him go.

“To see such inaction, its hard for me to understand what is the threshold for arrest and what is a reasonable expectation for police action,” said Heller.

The SFPD released the following statement in response to the incident: “Our job is not just to enforce the law, but to ensure everyone is protected by the law. Releasing a possible suspect does not mean the investigation is over. In fact, it means the investigation is just beginning.“

Sure.