Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #1111 and FTR #1112 Update on the Alleged “Suicide” of Iris Chang and the Destabilization of China and “BioWarfare-Psy-Op” Against China?

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FTR #1111: This pro­gram was record­ed in one, 60-minute seg­ment.

FTR #1112: This pro­gram was record­ed in  one, 60-minute seg­ment.

Intro­duc­tion: This descrip­tion encom­pass­es mate­r­i­al for two pro­grams. Fol­low­ing up on FTR #‘s 1107 and 1108, we high­light a San Fran­cis­co Chron­i­cle arti­cle about the alleged sui­cide of Iris Chang, a sug­ges­tive, impor­tant detail was noticed by a sharp-eyed listener/reader. A detail about the phys­i­cal cir­cum­stances sur­round­ing Iris’s “sui­cide” suggests–strongly–that she did not pull the trig­ger her­self. Her body was dis­cov­ered by a San­ta Clara Coun­ty Water Dis­trict Employ­ee. Some­one who had fired a .45 cal­iber black pow­der weapon into her mouth would be unlike­ly to have her hands crossed in her lap and with the revolver on her left leg. This sounds like it may well an arranged crime scene. . . . . He noticed con­den­sa­tion on the win­dows, peered inside and saw Iris in the dri­ver’s seat with her hands crossed in her lap. The revolver lay on her left leg. . . .” Some­one who had fired a.45 cal­iber black pow­der weaponinto her mouth would be unlike­ly to have her hands crossed in her lap and with the revolver on her left leg. This sounds like it may well an arranged crime scene.

Tran­si­tion­ing to dis­cus­sion about bio­log­i­cal war­fare, we dis­cuss Unit 731–a Japan­ese chem­i­cal and bio­log­i­cal war­fare unit that com­mit­ted egre­gious atroc­i­ties in Chi­na dur­ing World War II.  We note: ” . . . . the U.S. Gov­ern­ment secret­ly absorbed Unit 731, mov­ing most of its sci­en­tists, per­son­nel, and doc­u­ments to U.S. mil­i­tary research cen­ters like Fort Diet­rick in the Mary­land coun­try­side. All infor­ma­tion about its activ­i­ties, includ­ing bio­log­i­cal war­fare atroc­i­ties, and hor­rif­ic exper­i­ments on ful­ly con­scious vic­tims, was with­held by Wash­ing­ton from the Amer­i­can and Japan­ese pub­lic, and from the Tokyo War Crimes Tri­bunals. All Unit 731’s records held by the U.S. Gov­ern­ment are still top secret. . . .”

In con­nec­tion with the coro­n­avirus, we note that U.S. sci­en­tists had syn­the­sized a virus of that type in a lab­o­ra­to­ry by 2008–an virus that infect­ed mice, as well as human tis­sues. The syn­thet­ic coro­n­avirus was described, in part, as fol­lows: ” . . . .  Here, we report the design, syn­the­sis, and recov­ery of the largest syn­thet­ic repli­cat­ing life form, a 29.7‑kb bat severe acute res­pi­ra­to­ry syn­drome (SARS)-like coro­n­avirus (Bat-SCoV), a like­ly prog­en­i­tor to the SARS-CoV epi­dem­ic. Syn­thet­ic recom­bi­nant bat SARS-like coro­n­avirus is infec­tious in cul­tured cells and in mice. . . .”

Alto­geth­er curi­ous in the con­text of the stri­dent­ly alarmist cov­er­age of the coro­n­avirus out­break is the fact that Thai doc­tors have appar­ent­ly suc­cess­ful­ly treat­ed the virus with a drug cock­tail involv­ing some com­mon anti-virals. “. . . . A Chi­nese woman infect­ed with the new coro­n­avirus showed a dra­mat­ic improve­ment after she was treat­ed with a cock­tail of anti-virals used to treat flu and HIV, Thai­land’s health min­istry said Sun­day. The 71-year-old patient test­ed neg­a­tive for the virus 48 hours after Thai doc­tors admin­is­tered the com­bi­na­tion, doc­tor Kriengsak Atti­porn­wanich said dur­ing the min­istry’s dai­ly press brief­ing. ‘The lab result of pos­i­tive on the coro­n­avirus turned neg­a­tive in 48 hours,’ Kriengsak said. . . . The doc­tors com­bined the anti-flu drug oseltamivir with lopinavir and riton­avir, anti-virals used to treat HIV, Kriengsak said, adding the min­istry was await­ing research results to prove the find­ings. . . .”

Report­ed by both Agence France Presse and Reuters–two major wire services–this (appar­ent­ly suc­cess­ful) ther­a­peu­tic regime has gone unre­port­ed in U.S. media, so far.

The lift­ing of a mora­to­ri­um on the test­ing of virus­es such as the SARS and MERS coro­n­avirus­es was lift­ed at the end of Decem­ber of 2017, a lit­tle more than two years before the out­break occurred. A num­ber of key points of inquiry in a post by Dr. Joseph Mer­co­la should be scru­ti­nized:

  • As men­tioned the mora­to­ri­um on the test­ing of this virus was lift­ed a lit­tle less than two years after the out­break. ” . . . . For starters, a 2014 NPR arti­cle32 was rather prophet­ic. It dis­cuss­es the Octo­ber 2014 U.S. mora­to­ri­um on exper­i­ments on coro­n­avirus­es like SARS and MERS, as well as influen­za virus, that might make the virus­es more path­o­gen­ic and/or easy to spread among humans. The ban came on the heels of ‘high-pro­file lab mishaps’ at the CDC and ‘extreme­ly con­tro­ver­sial flu exper­i­ments’ in which the bird flu virus was engi­neered to become more lethal and con­ta­gious between fer­rets. The goal was to see if it could mutate and become more lethal and con­ta­gious between humans, caus­ing future pan­demics. . . . ”
  • Note that as the ban was lift­ed, it was known that a virus of the type now infect­ing Chi­na had been devel­oped in a U.S. lab. This appears to be the same virus men­tioned in the 2008 post men­tioned above. That link had been tem­porar­i­ly bro­ken, as men­tioned in FTR #1112. It has since been restored. ” . . . . The fed­er­al mora­to­ri­um on lethal virus exper­i­ments in the U.S. was lift­ed at the end of Decem­ber 2017,38 even though researchers announced in 2015 they had cre­at­ed a lab-cre­at­ed hybrid coro­n­avirus sim­i­lar to that of SARS that was capa­ble of infect­ing both human air­way cells and mice. . . .”
  • Chi­na had opened a lev­el 4 lab­o­ra­to­ry to study the world’s most dan­ger­ous pathogens in Jan­u­ary of 2018 (one month after the U.S. resumed test­ing of lethal virus­es.) ” . . . . In Jan­u­ary 2018, Chi­na’s first max­i­mum secu­ri­ty virol­o­gy lab­o­ra­to­ry (biose­cu­ri­ty lev­el 4) designed for the study of the world’s most dan­ger­ous pathogens opened its doors — in Wuhan.41,42 . . . .”
  • A cou­ple of months before the out­break in Chi­na, there was a (frankly sus­pi­cious) exer­cise in New York that was not only a har­bin­ger of what was about to hap­pen but may have been used to jour­nal­is­ti­cal­ly frame cov­er­age of the Wuhan virus. The sig­nif­i­cance of this, in our opin­ion, is the “psy­cho­log­i­cal war­fare” component–the utter hys­te­ria grip­ping the world (and dri­ving down mar­kets) may be dri­ven, in part, by the sug­ges­tion placed in peo­ple’s minds by this exer­cise. Giv­en that rough­ly nine hun­dred Chi­nese have suc­cumbed to the coro­n­avirus and almost ten times that num­ber have died from the flu in the U.S. (a coun­try with a pop­u­la­tion rough­ly one fifth the size of Chi­na’s) it would make more sense for peo­ple to be beside them­selves over the flu and/or the prospects of trav­el­ing to, or receiv­ing trav­el­ers from, the U.S. that is not the case. We also note, in this con­text, that the demo­graph­ic of peo­ple suc­cumb­ing to the coro­n­avirus is sim­i­lar to the demo­graph­ic of most flu fatal­i­ties: old­er peo­ple with oth­er infec­tions and/or chron­i­cal­ly ill patients. In oth­er words, peo­ple with weak­ened immune sys­tems. ” . . . . Equal­ly curi­ous is the fact that Johns Hop­kins Cen­ter for Health Secu­ri­ty, the World Eco­nom­ic Forum and the Bill and Melin­da Gates Foun­da­tion spon­sored a nov­el coro­n­avirus pan­dem­ic pre­pared­ness exer­cise Octo­ber 18, 2019, in New York called ‘Event 201.‘46 The sim­u­la­tion pre­dict­ed a glob­al death toll of 65 mil­lion peo­ple with­in a span of 18 months.47 As report­ed by Forbes Decem­ber 12, 2019:48 ‘The experts ran through a care­ful­ly designed, detailed sim­u­la­tion of a new (fic­tion­al) viral ill­ness called CAPS or coro­n­avirus acute pul­monary syn­drome. This was mod­eled after pre­vi­ous epi­demics like SARS and MERS.’ Sounds exact­ly like NCIP, does­n’t it? Yet the new coro­n­avirus respon­si­ble for NCIP had not yet been iden­ti­fied at the time of the sim­u­la­tion, and the first case was­n’t report­ed until two months lat­er. . . . ”
  • As not­ed above, press cov­er­age of the Chi­nese out­break sug­gests that media out­lets may well have been briefed about “Event 201.” ” . . . . Forbes also refers to the fic­tion­al pan­dem­ic as “Dis­ease X” — the same des­ig­na­tion used by The Tele­graph in its Jan­u­ary 24, 2020, video report, “Could This Coro­n­avirus be Dis­ease X?“49 which sug­gests that media out­lets were briefed and there was coor­di­na­tion ahead of time with regard to use of cer­tain key­words and catch­phras­es in news reports and opin­ion arti­cles. . . .”
  • Also of sig­nif­i­cance is the fact that Johns Hopkins–the co-spon­sor of “Event 201,” is at the epi­cen­ter of nation­al secu­ri­ty relat­ed bio­med­ical research. FOIA requests on such infor­ma­tion are shield­ed: ” . . . . Johns Hop­kins Uni­ver­si­ty (JHU) is the biggest recip­i­ent of research grants from fed­er­al agen­cies, includ­ing the Nation­al Insti­tutes of Health, Nation­al Sci­ence Foun­da­tion and Depart­ment of Defense and has received mil­lions of dol­lars in research grants from the Gates Foun­da­tion.50 In 2016, Johns Hop­kins spent more than $2 bil­lion on research projects, lead­ing all U.S. uni­ver­si­ties in research spend­ing for the 38th year in a row.51 If research fund­ed by fed­er­al agen­cies, such as the DOD or HHS is clas­si­fied as being per­formed ‘in the inter­est of nation­al secu­ri­ty,’ it is exempt from Free­dom of Infor­ma­tion Act (FOIA) requests.52 Research con­duct­ed under the Bio­med­ical Advanced Research and Devel­op­ment Author­i­ty (BARDA) is com­plete­ly shield­ed from FOIA requests by the pub­lic.53 Addi­tion­al­ly, agen­cies may deny FOIA requests and with­hold infor­ma­tion if gov­ern­ment offi­cials con­clude that shield­ing it from pub­lic view ‘pro­tects trade secrets and com­mer­cial or finan­cial infor­ma­tion which could harm the com­pet­i­tive pos­ture or busi­ness inter­ests of a com­pa­ny.’ . . .”

Next, we note that Steve Ban­non–at the epi­cen­ter of the anti-Chi­na move­ment–is pro­fes­sion­al­ly aligned with an exiled Chi­nese bil­lion­aire and a wealthy Texas hedge fund man­ag­er posi­tioned to make a great deal of mon­ey from a down­turn in Chi­na’s mar­kets.

Ban­non is also very close to the accom­plished investor bil­lion­aire Robert Mer­cer, of Cam­bridge Ana­lyt­i­ca fame. In our next pro­gram, we will dis­cuss Mer­cer’s Reinais­sance Tech­nolo­gies hedge fund and its invest­ment posi­tion with regard to a phar­ma­ceu­ti­cal giant that may prof­it from the coro­n­avirus out­break.

Key points of dis­cus­sion:

  • G News is dis­sem­i­nat­ing dis­in­for­ma­tion about the coro­n­avirus:  ” . . . . On Jan. 25, G News pub­lished a false sto­ry say­ing the Chi­nese gov­ern­ment was prepar­ing to admit that the coro­n­avirus orig­i­nat­ed in one of its labs. It did not, but the arti­cle still racked up over 19,000 tweets and 18,000 Face­book engage­ments, accord­ing to social track­ing web­site Buz­zSumo. . . .
  • 4chan and 2chan have been ampli­fy­ing the dis­in­for­ma­tion about the coro­n­avirus, echo­ing the false­hood that the Chi­nese gov­ern­ment spread the virus. ” . . . . The web­site also pub­lished a ques­tion­able doc­u­ment that fed a con­spir­a­cy that the Chi­nese mil­i­tary spread the dis­ease delib­er­ate­ly. That doc­u­ment, which seems to have come from G News orig­i­nal­ly, has been pop­u­lar on anony­mous mes­sage boards like 4chan and 2chan. . . .”
  • G News and its funder–Guo Wengui–are pro­fes­sion­al­ly asso­ci­at­ed with Steve Ban­non. ” . . . . G News is part of Guo Media, a project fund­ed by Chi­nese bil­lion­aire Guo Wen­gui, also known as Miles Kwok and Miles Guo. . . . In August 2018, Guo’s orga­ni­za­tion signed what Axios report­ed to be a $1 mil­lion con­tract with Steve Ban­non, for­mer White House strate­gist and for­mer chair of the hyper­par­ti­san news site Bre­it­bart. The con­tract required Ban­non to make intro­duc­tions to ‘media per­son­al­i­ties’ and advise on ‘indus­try stan­dards,’ accord­ing to Axios. Guo and Ban­non fre­quent­ly appear togeth­er in videos on G News that attack the Chi­nese gov­ern­ment. . . .”
  • Asso­ci­at­ed with Steve Ban­non and G News is Dal­las-based hedge fund man­ag­er J. Kyle Bass, who is posi­tioned to make a great deal of mon­ey over a down­turn in the Chi­nese econ­o­my. ” . . . . Anoth­er per­son con­nect­ed to G News, hedge fund man­ag­er J. Kyle Bass, also spread a false coro­n­avirus claim in a tweet. His hedge fund report­ed­ly had invest­ments that will increase in val­ue if the Chi­nese econ­o­my fails . . . . Bass has remained a Chi­na crit­ic, fre­quent­ly echo­ing Ban­non.”
  • Bass, too, is tweet­ing dis­in­for­ma­tion about the virus: ” . . . . ‘A hus­band and wife Chi­nese spy team were recent­ly removed from a Lev­el 4 Infec­tious Dis­ease facil­i­ty in Cana­da for send­ing pathogens to the Wuhan facil­i­ty. The hus­band spe­cial­ized in coro­n­avirus research,’ Bass tweet­ed, link­ing to a CBC News arti­cle that did not sup­port his claim. . . .”
  • Bass has no inten­tion of remov­ing his tweet, and is chair­man of a foun­da­tion that adver­tis­es on G News. . . . . When asked about his tweet, Bass said he had no plan to remove it. ‘I am extreme­ly con­cerned about the spread of mis­in­for­ma­tion about the coro­n­avirus by the Chi­nese gov­ern­ment,’ he said. Bass is the chair of the Rule of Law Foun­da­tion, a non­prof­it that runs ban­ner ads at the top and bot­tom of the G News web­site solic­it­ing dona­tions. . . .”
  • Bass denies any link between the Rule of Law Foun­da­tion and the Rule of Law Fund, found­ed by Guo and Ban­non, a claim of which we are skep­ti­cal. ” . . . . He also claimed that the Rule of Law Foun­da­tion was sep­a­rate from the $100 mil­lion fund start­ed by Guo and Ban­non called the Rule of Law Fund. . . .”

Sup­ple­ment­ing the pre­vi­ous arti­cle about Ban­non, J. Kyle Bass and Guo Wen­gui, we note that Bass is close to, and may well be a co-investor with, Tom­my Hicks Jr., a key mem­ber of Team Trump. Hicks, Com­merce Sec­re­tary Wilbur Ross and nation­al secu­ri­ty offi­cials are, in turn, work­ing to deny Chi­nese elec­tron­ics firm Huawei access to devel­op­ing 5G net­works, fur­ther ham­string­ing the Chi­nese econ­o­my.

Paul Krug­man, among oth­ers, has not­ed that Wilbur Ross was open­ly cel­e­brat­ing the coro­n­avirus as a boon to the Unit­ed States.

We high­light key aspects of this dis­cus­sion:

  • Tom­my Hicks is at the epi­cen­ter of Trump admin­is­tra­tion maneu­ver­ing that, ulti­mate­ly, will hurt Chi­na eco­nom­i­cal­ly (and will ben­e­fit the invest­ments of J. Kyle Bass.) ” . . . .  Over the past two years, the Trump admin­is­tra­tion has been grap­pling with how to han­dle the tran­si­tion to the next gen­er­a­tion of mobile broad­band tech­nol­o­gy. With spend­ing expect­ed to run into hun­dreds of bil­lions of dol­lars, the admin­is­tra­tion views it as an ultra-high-stakes com­pe­ti­tion between U.S. and Chi­nese com­pa­nies, with enor­mous impli­ca­tions both for tech­nol­o­gy and for nation­al secu­ri­ty. Top offi­cials from a raft of depart­ments have been meet­ing to hash out the best approach. But there’s been one per­son at some of the dis­cus­sions who has a dif­fer­ent back­ground: He’s Don­ald Trump Jr.’s hunt­ing bud­dy. . . .”
  • Hicks is not a gov­ern­ment offi­cial but has access to high-lev­el gov­ern­men­tal process, includ­ing (appar­ent­ly) CIA activ­i­ties. ” . . . . Tom­my Hicks Jr., 41, isn’t a gov­ern­ment offi­cial; he’s a wealthy pri­vate investor. And he has been a part of dis­cus­sions relat­ed to Chi­na and tech­nol­o­gy with top offi­cials from the Trea­sury Depart­ment, Nation­al Secu­ri­ty Coun­cil, Com­merce Depart­ment and oth­ers, accord­ing to emails and doc­u­ments obtained by ProP­ub­li­ca. In one email, Hicks refers to a meet­ing at ‘Lan­g­ley,’ an appar­ent ref­er­ence to the CIA’s head­quar­ters. . . .”
  • Hicks has used his posi­tion to arrange for J. Kyle Bass to net­work with gov­ern­ment agen­cies and offi­cials. Bear in mind that Bass is posi­tioned to ben­e­fit from a down­turn in Chi­na’s econ­o­my. ” . . . . Hicks used his con­nec­tions to arrange for a hedge fund man­ag­er friend, Kyle Bass — who has $143 mil­lion in invest­ments that will pay off if China’s econ­o­my tanks — to present his views on the Chi­nese econ­o­my to high-lev­el gov­ern­ment offi­cials at an inter­a­gency meet­ing at the Trea­sury Depart­ment, accord­ing to the doc­u­ments. . . .”
  • Hicks is no co-chair­man of the Repub­li­can Nation­al Com­mit­tee. ” . . . . Hicks lever­aged his Dal­las finan­cial net­work to become a top Trump cam­paign fundrais­er in 2016 and a vice chair­man of the inau­gur­al finance com­mit­tee; in Jan­u­ary, he was named co-chair­man of the Repub­li­can Nation­al Com­mit­tee. . . . ”
  • In addi­tion to his rela­tion­ship with Don­ald Trump, Jr., Hicks is net­worked with Jared Kush­n­er. ” . . . . Even before becom­ing the sec­ond high­est-rank­ing GOP offi­cial, Hicks was a fre­quent White House guest. He liked to have lunch in the White House mess with his half sis­ter, who worked for a time in the com­mu­ni­ca­tions oper­a­tion. . . .  Hicks would then stroll the halls, accord­ing to a for­mer senior admin­is­tra­tion offi­cial, drop­ping in to offices for impromp­tu chats with var­i­ous offi­cials, includ­ing Jared Kush­n­er. Those sorts of con­nec­tions have giv­en Hicks a con­ven­ing pow­er, the abil­i­ty to call togeth­er mul­ti­ple offi­cials. . . . ”
  • Again, Hicks net­work­ing can influ­ence pol­i­cy­mak­ing that could dam­age Chi­na eco­nom­i­cal­ly and assist Bass. ” . . . . ‘He basi­cal­ly opened the door for hav­ing a con­ver­sa­tion with peo­ple who I didn’t know but need­ed to know,’ said Robert Spald­ing, a for­mer senior direc­tor for strate­gic plan­ning at the Nation­al Secu­ri­ty Coun­cil dur­ing the Trump admin­is­tra­tion. The efforts, detailed in hun­dreds of pages of gov­ern­ment emails and oth­er doc­u­ments obtained under the Free­dom of Infor­ma­tion Act, show that Hicks had access to the high­est lev­els of gov­ern­ment to influ­ence pol­i­cy­mak­ing in ways that could lead to painful eco­nom­ic out­comes for the Chi­nese — and a poten­tial­ly lucra­tive result for Hicks’ hedge fund friend, Bass. . . .”
  • Hicks and Bass have invest­ed togeth­er since 2011. ” . . . . Bass pre­sent­ed his views on China’s bank­ing sys­tem in the office of Heath Tar­bert, an assis­tant sec­re­tary at Trea­sury in charge of inter­na­tion­al mar­kets and invest­ment pol­i­cy and a pow­er­ful inter­gov­ern­men­tal com­mit­tee that reviews for­eign invest­ments in the U.S. for nation­al secu­ri­ty con­cerns. Among the offi­cials at the meet­ing with Tar­bert were Bill Hin­man, the direc­tor of the divi­sion of cor­po­ra­tion finance at the Secu­ri­ties and Exchange Com­mis­sion, and Ray Wash­burne, a wealthy Dal­las restau­rant own­er and fam­i­ly friend of Hicks’ who was nom­i­nat­ed by Trump to head the Over­seas Pri­vate Invest­ment Cor­po­ra­tion. Hicks and Bass, both Dal­las res­i­dents and long­time denizens of the finan­cial com­mu­ni­ty there, have invest­ed togeth­er since at least 2011, accord­ing to secu­ri­ties fil­ings and court records. . . .”
  • Hicks did not deny that he par­tic­i­pat­ed in Bass’s funds, but was eva­sive.” . . . . But it’s not clear if Hicks or his fam­i­ly have an invest­ment in Bass’ Chi­na-relat­ed funds. Reached twice on his cell­phone, Hicks declined to be inter­viewed by ProP­ub­li­ca. In the sec­ond call, in June, Hicks didn’t dis­pute that he and his fam­i­ly have invest­ed in Bass’ funds. But when asked to detail their busi­ness rela­tion­ship, he cut the con­ver­sa­tion short. . . . ”
  • Bass has a his­to­ry of bet­ting against trends that will turn down­ward, hav­ing made his for­tune on the 2008 crash. ” . . . . Bass, who made his name and for­tune by bet­ting against sub­prime mort­gages before the crash and is known for large bets that economies or cer­tain macro trends will turn down­ward, declined to com­ment. . . .”
  • Offi­cial review did not exam­ine pos­si­ble busi­ness rela­tion­ships between Hicks and Bass. H” . . . . An admin­is­tra­tion offi­cial briefed on the Bass meet­ing at the Trea­sury down­played it as ‘strict­ly a lis­ten­ing ses­sion.’ . . . . He acknowl­edged that the review didn’t include an exam­i­na­tion of any finan­cial rela­tion­ship between Hicks and Bass. . . .”
  • Bass is posi­tioned to main­tain “mas­sive asym­me­try” to down turns in Hong Kong and Chi­na, in oth­er words, he will ben­e­fit if they go down. ” . . . . Bass has become a vocal advo­cate for an aggres­sive U.S. pol­i­cy toward Chi­na. On Twit­ter and on cable busi­ness chan­nels he’s denounced every­thing from the country’s Com­mu­nist Par­ty gov­ern­ment to its busi­ness prac­tices. Secu­ri­ties fil­ings show Bass raised $143 mil­lion from about 81 investors in two funds — invest­ments that would ben­e­fit if China’s cur­ren­cy were deval­ued or the coun­try faced cred­it or bank­ing crises. In April, in a let­ter to his investors, Bass wrote that his com­pa­ny, Hay­man Cap­i­tal Man­age­ment, was posi­tioned for com­ing prob­lems in Hong Kong and was set up to ‘main­tain a mas­sive asym­me­try to a neg­a­tive out­come in Hong Kong and/or Chi­na.’ . . . ”
  • Hicks has net­worked with Wilbur Ross, who has open­ly cel­e­brat­ed the coro­n­avirus out­break. Ross is deeply involved with the 5G maneu­ver­ing.” . . . . Hicks’ work on the 5G ini­tia­tive was exten­sive. . . . .  he was part of an infor­mal group led by then NSC offi­cial Spald­ing, that advo­cat­ed for a strat­e­gy in which the fed­er­al gov­ern­ment would plan out a nation­al pol­i­cy for 5G. . . . That same month Hicks attend­ed a 5G meet­ing that he’d arranged with Com­merce Sec­re­tary Wilbur Ross. Com­merce plays a key role in the future of 5G since a divi­sion with­in the agency man­ages gov­ern­ment spec­trum and anoth­er main­tains a list of com­pa­nies the gov­ern­ment believes are, or will become, nation­al secu­ri­ty threats. Com­pa­nies that end up on that list can be effec­tive­ly shut out from glob­al deal-mak­ing. The meet­ing with Ross focused heav­i­ly on the threat of Chi­na, said Ira Green­stein, who served as a White House aide and was part of Spalding’s 5G crew. . . .”
  • Hicks is net­work­ing with ele­ments in Tai­wan with regard to the 5G devel­op­ments. ” . . . . It isn’t clear what influ­ence, if any, Hicks had in those deci­sions. But his pro­file is only ris­ing. In April, he led a Repub­li­can del­e­ga­tion to Tai­wan along­side a U.S. gov­ern­ment del­e­ga­tion. Hicks met with the country’s pres­i­dent, Tsai Ing-wen, who has late­ly been posi­tion­ing her country’s cor­po­ra­tions as safer providers of 5G equip­ment than those in Chi­na. Tsai thanked the U.S. for sell­ing arms to Tai­wan. She asked Hicks to con­vey her regards to the Trumps. . . .”

The broad­cast con­cludes with a read­ing of head­lines and, in some cas­es, text excerpts of arti­cles about the eco­nom­ic impact of the coro­n­avirus out­break, as well as xeno­pho­bic over-reac­tion on the part of many gov­ern­ments.

1.  In a San Fran­cis­co Chron­i­cle arti­cle about the alleged sui­cide of Iris Chang, a sug­ges­tive, impor­tant detail was noticed by a sharp-eyed listener/reader.

A detail about the phys­i­cal cir­cum­stances sur­round­ing Iris’s “sui­cide” suggests–strongly–that she did not pull the trig­ger her­self. Her body was dis­cov­ered by a San­ta Clara Coun­ty Water Dis­trict Employ­ee.

Some­one who had fired a .45 cal­iber black pow­der weapon into her mouth would be unlike­ly to have her hands crossed in her lap and with the revolver on her left leg. This sounds like it may well an arranged crime scene.

“His­to­ri­an Iris Chang Won Many Bat­tles: The War She Lost Raged With­in” by Hei­di Ben­son; San Fran­cis­co Chron­i­cle; 4/17/2005.

. . . . He noticed con­den­sa­tion on the win­dows, peered inside and saw Iris in the dri­ver’s seat with her hands crossed in her lap. The revolver lay on her left leg. . . .

Some­one who had fired a .45 cal­iber black pow­der weapon into her mouth would be unlike­ly to have her hands crossed in her lap and with the revolver on her left leg. This sounds like it may well an arranged crime scene.

2. Piv­ot­ing to the sub­ject of bio­log­i­cal war­fare and Chi­na, we high­light the activ­i­ties of Japan­ese Unit 731:

 Gold War­riors by Ster­ling and Peg­gy Sea­grave; Ver­so [SC]; Copy­right 2003, 2005 by Ster­ling and Peg­gy Sea­grave; ISBN 1–84467-531–9; pp. 30–31.

. . . . Manchuria also became the main prov­ing ground for Japan’s bio­log­i­cal war­fare pro­gram, called sim­ply Unit 731. Head­quar­tered at Ping Fan, out­side Harbin, it was head­ed by Colonel Ishii Shi­ro, a 1920 grad­u­ate of Kyoto Uni­ver­si­ty, who per­suad­ed the high com­mand to let him devel­op chem­i­cal and bio­log­i­cal weapons, and test them on Chi­nese in Manchuria. Pu Yi said he learned that his sub­jects were being enslaved by the Japan­ese to build these instal­la­tions, then were poi­soned to keep the loca­tions secret. Lat­er, dur­ing the Pacif­ic War, oth­er labs wee set up in Peking, Can­ton, and Sin­ga­pore, exper­i­ment­ing on Allied POWs and civil­ian pris­on­ers. Emper­or Hiro­hi­to was briefed about it in detail dur­ing at least one record­ed meet­ing with Colonel Ishii. The emper­or’s broth­ers toured Ping Fan to observe exper­i­ments. Prince Mikasa, Hiro­hi­to’s youngest broth­er, revealed after the war that he had seen films in which “large num­bers of Chi­nese pris­on­ers of war . . . . were made to march on the Manchuri­an plain for poi­son gas exper­i­ments on live sub­jects.” Oth­ers, he said, were “tied to posts in a wide field [and] gassed and shot. It was a hor­ri­ble scene that could only be termed a mas­sacre.” . . .

3. Of pos­si­ble sig­nif­i­cance, aside from the fact that atroc­i­ty and chem­i­cal and bio­log­i­cal war­fare was deemed appro­pri­ate by ele­ments of the nation­al secu­ri­ty estab­lish­ment is the fact that tis­sue from this long-ago unit would still be able to yield impor­tant infor­ma­tion about Chi­nese DNA and immuno­log­i­cal pecu­liar­i­ties.

 Gold War­riors by Ster­ling and Peg­gy Sea­grave; Ver­so [SC]; Copy­right 2003, 2005 by Ster­ling and Peg­gy Sea­grave; ISBN 1–84467-531–9; p. 110.

. . . . Gen­er­al Mar­quat was also in charge of clos­ing down and pun­ish­ing Japan’s bio­log­i­cal and chem­i­cal war­fare ser­vice, Unit 731. Instead, the U.S. Gov­ern­ment secret­ly absorbed Unit 731, mov­ing most of its sci­en­tists, per­son­nel, and doc­u­ments to U.S. mil­i­tary research cen­ters like Fort Diet­rick in the Mary­land coun­try­side. All infor­ma­tion about its activ­i­ties, includ­ing bio­log­i­cal war­fare atroc­i­ties, and hor­rif­ic exper­i­ments on ful­ly con­scious vic­tims, was with­held by Wash­ing­ton from the Amer­i­can and Japan­ese pub­lic, and from the Tokyo War Crimes Tri­bunals. All Unit 731’s records held by the U.S. Gov­ern­ment are still top secret. . . .

4. We have done a num­ber of pro­grams about the desta­bi­liza­tion of Chi­na.

(FTR #‘s 1089, 1090, 1091, 1092, 1093, 1094, 1095, and 1103.)

We have also done many shows over the years about ele­ments of the intel­li­gence com­mu­ni­ty and mil­i­tary test­ing and using bio­log­i­cal weapons on civil­ian pop­u­la­tions, inside and out­side of the U.S.

Use the search func­tion on this web­site (be sure to use quo­ta­tion marks when look­ing for a word or words) and look for: AIDS, Lyme Dis­ease, Ed Haslam, Han­ta Virus, to name just a few.

We are sus­pi­cious of the lat­est out­break of an appar­ent­ly bat-borne coro­na virus in Chi­na, which is desta­bi­liz­ing cap­i­tal mar­kets, Chi­na (to an extent at least) and stok­ing the anti-Chi­na feed­ing fren­zy of CIA-linked media out­lets like The New York Times.

It should be not­ed that Chi­nese sci­en­tists have been study­ing this type of virus and antic­i­pat­ed the pos­si­bil­i­ty that the next out­break of a bat virus to human out­break might well occur in Chi­na.

The tim­ing of this out­break, coin­cid­ing with the Chi­nese New Year, is sig­nif­i­cant, in our opin­ion.

In that con­text, it should not be over­looked that a bat-borne coro­n­avirus like the one appar­ent­ly caus­ing the Chi­nese out­break was syn­the­sized in U.S. labs more than ten years ago and report­ed in pub­li­ca­tions of the Nation­al Insti­tutes of Health. NB: After post­ing this link and excerpt, we tried the link five days lat­er and it could not be accessed. Two days lat­er, the link worked just fine. This may have been com­put­er weird­ness.

As illus­trat­ed in–among oth­er pro­grams–FTR #686–ele­ments of the Nation­al Insti­tutes of Health have a his­to­ry of col­lab­o­ra­tion with the nation­al secu­ri­ty estab­lish­ment.

This is NOT to say, nec­es­sar­i­ly, that there MUST be a con­nec­tion between this syn­the­sis and the out­break in Chi­na. NOR are we cast­ing asper­sions on the researchers involved.

Even IF, for the sake of argu­ment, there is a link, male­fac­tors in or asso­ci­at­ed with the intel­li­gence com­mu­ni­ty might well have availed them­selves of this, or relat­ed organ­isms.

Nonethe­less, giv­en past his­to­ry, this is a pos­si­bil­i­ty that war­rants care­ful exam­i­na­tion and con­sid­er­a­tion.

Note that: ” . . . . Syn­thet­ic recom­bi­nant bat SARS-like coro­n­avirus is infec­tious in cul­tured cells and in mice. . . .

“Syn­thet­ic recom­bi­nant bat SARS-like coro­n­avirus is infec­tious in cul­tured cells and in mice” by Michelle M. Beck­er, Rachel L. Gra­ham . . . Mark R. Deni­son; Nation­al Cen­ter For Biotech­nol­o­gy Infor­ma­tion [Nation­al Insti­tutes of Health]; 11/26/2008.

. . . . Here, we report the design, syn­the­sis, and recov­ery of the largest syn­thet­ic repli­cat­ing life form, a 29.7‑kb bat severe acute res­pi­ra­to­ry syn­drome (SARS)-like coro­n­avirus (Bat-SCoV), a like­ly prog­en­i­tor to the SARS-CoV epi­dem­ic. Syn­thet­ic recom­bi­nant bat SARS-like coro­n­avirus is infec­tious in cul­tured cells and in mice. . . .

5a. In the movie “The Wiz­ard of Oz,” Dorothy, the Scare­crow and the Cow­ard­ly Lion pro­ceed with trep­i­da­tion through The Dark For­est chant­i­ng “Lions and Tigers and Bears, Oh My!” In a recent post, we cov­ered our sus­pi­cions that the coro­n­avirus out­break in Chi­na was part of the desta­bi­liza­tion process under­way against that coun­try.  

We also won­dered if there might be a rel­a­tive­ly mun­dane ther­a­peu­tic reg­i­men that could be used to suc­cess­ful­ly treat the virus.

With innu­mer­able com­par­isons between the lat­est out­break and the 2003 SARS out­break, caused by a sim­i­lar virus, we note that it turned out that the SARS virus was read­i­ly treat­able with a ther­a­peu­tic reg­i­men sim­i­lar to that used to treat the flu and com­mon cold.

Amidst all of the cat­a­stroph­ic, world-wide head­lines, it turns out that there IS just such a ther­a­peu­tic reg­i­men!

We find it curi­ous that Amer­i­can media out­lets have remained silent on such a promis­ing ther­a­peu­tic reg­i­men. Reuters report­ed it, as did Agence France Presse. These are major wire ser­vices. Why not Amer­i­can media out­lets?

A sharp-eyed lis­ten­er not­ed the fol­low­ing: ” . . . . A Chi­nese woman infect­ed with the new coro­n­avirus showed a dra­mat­ic improve­ment after she was treat­ed with a cock­tail of anti-virals used to treat flu and HIV, Thai­land’s health min­istry said Sun­day. The 71-year-old patient test­ed neg­a­tive for the virus 48 hours after Thai doc­tors admin­is­tered the com­bi­na­tion, doc­tor Kriengsak Atti­porn­wanich said dur­ing the min­istry’s dai­ly press brief­ing. ‘The lab result of pos­i­tive on the coro­n­avirus turned neg­a­tive in 48 hours,’ Kriengsak said. . . .

“The doc­tors com­bined the anti-flu drug oseltamivir with lopinavir and riton­avir, anti-virals used to treat HIV, Kriengsak said, adding the min­istry was await­ing research results to prove the find­ings. . . . Thai­land so far has detect­ed 19 con­firmed cas­es of the virus believed to have orig­i­nat­ed in the cen­tral Chi­nese city of Wuhan, which is under lock­down. . . .

”  . . . .That is the sec­ond-high­est num­ber of cas­es out­side of Chi­na, with Japan record­ing 20. So far, eight patients in Thai­land have recov­ered and returned home, while 11 remain in the hos­pi­tal. In a video released Sun­day, Thai health min­is­ter Anutin Charn­vi­rakul vis­it­ed a patient from Wuhan who had recov­ered from the coro­n­avirus, chat­ting with her ami­ca­bly in Man­darin as she thanked him and the med­ical staff. . . .”

“Thai­land ‘Cures’ Coro­n­avirus with anti-HIV Drug Cock­tail in 48 Hours;” Dai­ly Sab­bah [Agence France Presse]; 2/2/2020.

A Chi­nese woman infect­ed with the new coro­n­avirus showed a dra­mat­ic improve­ment after she was treat­ed with a cock­tail of anti-virals used to treat flu and HIV, Thai­land’s health min­istry said Sun­day.

The 71-year-old patient test­ed neg­a­tive for the virus 48 hours after Thai doc­tors admin­is­tered the com­bi­na­tion, doc­tor Kriengsak Atti­porn­wanich said dur­ing the min­istry’s dai­ly press brief­ing.

“The lab result of pos­i­tive on the coro­n­avirus turned neg­a­tive in 48 hours,” Kriengsak said.

“From being exhaust­ed before, she could sit up in bed 12 hours lat­er.”

The doc­tors com­bined the anti-flu drug oseltamivir with lopinavir and riton­avir, anti-virals used to treat HIV, Kriengsak said, adding the min­istry was await­ing research results to prove the find­ings.

The news comes as the new virus claimed its first life out­side Chi­na – a 44-year-old Chi­nese man who died in the Philip­pines – while the death toll in Chi­na has soared above 300.

Thai­land so far has detect­ed 19 con­firmed cas­es of the virus believed to have orig­i­nat­ed in the cen­tral Chi­nese city of Wuhan, which is under lock­down.

That is the sec­ond-high­est num­ber of cas­es out­side of Chi­na, with Japan record­ing 20.

So far, eight patients in Thai­land have recov­ered and returned home, while 11 remain in the hos­pi­tal.

In a video released Sun­day, Thai health min­is­ter Anutin Charn­vi­rakul vis­it­ed a patient from Wuhan who had recov­ered from the coro­n­avirus, chat­ting with her ami­ca­bly in Man­darin as she thanked him and the med­ical staff.

Thai author­i­ties are try­ing to bal­ance the screen­ing of inbound Chi­nese vis­i­tors with the eco­nom­ic needs of its tourist sec­tor, which is heav­i­ly reliant on arrivals from the main­land.

Mes­sages of sup­port say­ing “Our hearts to Wuhan” in Eng­lish, Chi­nese and Thai were plas­tered on a Bangkok mall pop­u­lar with tourists.

The bulk of con­firmed cas­es have been Chi­nese vis­i­tors to Thai­land, but on Thurs­day the king­dom record­ed its first human-to-human trans­mis­sion when a Thai taxi dri­ver was diag­nosed with the dis­ease.

The taxi dri­ver had not trav­eled to Chi­na but may have had con­tact with tourists.

Thai­land’s gov­ern­ment is also bat­tling pub­lic crit­i­cism that it has been slow to evac­u­ate scores of its cit­i­zens from Hubei province, at the cen­ter of the out­break.

Anutin said the evac­u­a­tion would hap­pen Tues­day, and the returnees would be quar­an­tined for 14 days.

5b. The lift­ing of a mora­to­ri­um on the test­ing of virus­es such as the SARS and MERS coro­n­avirus­es was lift­ed at the end of Decem­ber of 2017, a lit­tle more than two years before the out­break occurred. A num­ber of key points of inquiry in this post by Dr. Joseph Mer­co­la should be scru­ti­nized:

  • As men­tioned the mora­to­ri­um on the test­ing of this virus was lift­ed a lit­tle less than two years after the out­break. ” . . . . For starters, a 2014 NPR arti­cle32 was rather prophet­ic. It dis­cuss­es the Octo­ber 2014 U.S. mora­to­ri­um on exper­i­ments on coro­n­avirus­es like SARS and MERS, as well as influen­za virus, that might make the virus­es more path­o­gen­ic and/or easy to spread among humans. The ban came on the heels of ‘high-pro­file lab mishaps’ at the CDC and ‘extreme­ly con­tro­ver­sial flu exper­i­ments’ in which the bird flu virus was engi­neered to become more lethal and con­ta­gious between fer­rets. The goal was to see if it could mutate and become more lethal and con­ta­gious between humans, caus­ing future pan­demics. . . . ”
  • Note that as the ban was lift­ed, it was known that a virus of the type now infect­ing Chi­na had been devel­oped in a U.S. lab. This appears to be the same virus men­tioned in the 2008 post men­tioned above. That link had been tem­porar­i­ly bro­ken, as men­tioned in FTR #1112. It has since been restored. ” . . . . The fed­er­al mora­to­ri­um on lethal virus exper­i­ments in the U.S. was lift­ed at the end of Decem­ber 2017,38 even though researchers announced in 2015 they had cre­at­ed a lab-cre­at­ed hybrid coro­n­avirus sim­i­lar to that of SARS that was capa­ble of infect­ing both human air­way cells and mice. . . .”
  • Chi­na had opened a lev­el 4 lab­o­ra­to­ry to study the world’s most dan­ger­ous pathogens in Jan­u­ary of 2018 (one month after the U.S. resumed test­ing of lethal virus­es.) ” . . . . In Jan­u­ary 2018, Chi­na’s first max­i­mum secu­ri­ty virol­o­gy lab­o­ra­to­ry (biose­cu­ri­ty lev­el 4) designed for the study of the world’s most dan­ger­ous pathogens opened its doors — in Wuhan.41,42 . . . .”
  • A cou­ple of months before the out­break in Chi­na, there was a (frankly sus­pi­cious) exer­cise in New York that was not only a har­bin­ger of what was about to hap­pen but may have been used to jour­nal­is­ti­cal­ly frame cov­er­age of the Wuhan virus. The sig­nif­i­cance of this, in our opin­ion, is the “psy­cho­log­i­cal war­fare” component–the utter hys­te­ria grip­ping the world (and dri­ving down mar­kets) may be dri­ven, in part, by the sug­ges­tion placed in peo­ple’s minds by this exer­cise. Giv­en that rough­ly nine hun­dred Chi­nese have suc­cumbed to the coro­n­avirus and almost ten times that num­ber have died from the flu in the U.S. (a coun­try with a pop­u­la­tion rough­ly one fifth the size of Chi­na’s) it would make more sense for peo­ple to be beside them­selves over the flu and/or the prospects of trav­el­ing to, or receiv­ing trav­el­ers from, the U.S. that is not the case. We also note, in this con­text, that the demo­graph­ic of peo­ple suc­cumb­ing to the coro­n­avirus is sim­i­lar to the demo­graph­ic of most flu fatal­i­ties: old­er peo­ple with oth­er infec­tions and/or chron­i­cal­ly ill patients. In oth­er words, peo­ple with weak­ened immune sys­tems. ” . . . . Equal­ly curi­ous is the fact that Johns Hop­kins Cen­ter for Health Secu­ri­ty, the World Eco­nom­ic Forum and the Bill and Melin­da Gates Foun­da­tion spon­sored a nov­el coro­n­avirus pan­dem­ic pre­pared­ness exer­cise Octo­ber 18, 2019, in New York called ‘Event 201.‘46 The sim­u­la­tion pre­dict­ed a glob­al death toll of 65 mil­lion peo­ple with­in a span of 18 months.47 As report­ed by Forbes Decem­ber 12, 2019:48 ‘The experts ran through a care­ful­ly designed, detailed sim­u­la­tion of a new (fic­tion­al) viral ill­ness called CAPS or coro­n­avirus acute pul­monary syn­drome. This was mod­eled after pre­vi­ous epi­demics like SARS and MERS.’ Sounds exact­ly like NCIP, does­n’t it? Yet the new coro­n­avirus respon­si­ble for NCIP had not yet been iden­ti­fied at the time of the sim­u­la­tion, and the first case was­n’t report­ed until two months lat­er. . . . ”
  • As not­ed above, press cov­er­age of the Chi­nese out­break sug­gests that media out­lets may well have been briefed about “Event 201.” ” . . . . Forbes also refers to the fic­tion­al pan­dem­ic as “Dis­ease X” — the same des­ig­na­tion used by The Tele­graph in its Jan­u­ary 24, 2020, video report, “Could This Coro­n­avirus be Dis­ease X?“49 which sug­gests that media out­lets were briefed and there was coor­di­na­tion ahead of time with regard to use of cer­tain key­words and catch­phras­es in news reports and opin­ion arti­cles. . . .”
  • Also of sig­nif­i­cance is the fact that Johns Hopkins–the co-spon­sor of “Event 201,” is at the epi­cen­ter of nation­al secu­ri­ty relat­ed bio­med­ical research. FOIA requests on such infor­ma­tion are shield­ed: ” . . . . Johns Hop­kins Uni­ver­si­ty (JHU) is the biggest recip­i­ent of research grants from fed­er­al agen­cies, includ­ing the Nation­al Insti­tutes of Health, Nation­al Sci­ence Foun­da­tion and Depart­ment of Defense and has received mil­lions of dol­lars in research grants from the Gates Foun­da­tion.50 In 2016, Johns Hop­kins spent more than $2 bil­lion on research projects, lead­ing all U.S. uni­ver­si­ties in research spend­ing for the 38th year in a row.51 If research fund­ed by fed­er­al agen­cies, such as the DOD or HHS is clas­si­fied as being per­formed ‘in the inter­est of nation­al secu­ri­ty,’ it is exempt from Free­dom of Infor­ma­tion Act (FOIA) requests.52 Research con­duct­ed under the Bio­med­ical Advanced Research and Devel­op­ment Author­i­ty (BARDA) is com­plete­ly shield­ed from FOIA requests by the pub­lic.53 Addi­tion­al­ly, agen­cies may deny FOIA requests and with­hold infor­ma­tion if gov­ern­ment offi­cials con­clude that shield­ing it from pub­lic view ‘pro­tects trade secrets and com­mer­cial or finan­cial infor­ma­tion which could harm the com­pet­i­tive pos­ture or busi­ness inter­ests of a com­pa­ny.’ . . .”

“Nov­el Coronavirus–The Lat­est Pan­dem­ic Scare” by Dr. Joseph Mer­co­la; Mer­co­la; 2/4/2020.

. . . . Mora­to­ri­um on SARS/MERS Exper­i­ments Lift­ed in 2017

As men­tioned, a num­ber of reports raise ques­tions about the source of the 2019-nCoV [The Chi­nese coronavirus–D.E.]. For starters, a 2014 NPR arti­cle32 was rather prophet­ic. It dis­cuss­es the Octo­ber 2014 U.S. mora­to­ri­um on exper­i­ments on coro­n­avirus­es like SARS and MERS, as well as influen­za virus, that might make the virus­es more path­o­gen­ic and/or easy to spread among humans.

The ban came on the heels of “high-pro­file lab mishaps” at the CDC and “extreme­ly con­tro­ver­sial flu exper­i­ments” in which the bird flu virus was engi­neered to become more lethal and con­ta­gious between fer­rets. The goal was to see if it could mutate and become more lethal and con­ta­gious between humans, caus­ing future pan­demics.

How­ev­er, for the past decade there have been red flags raised in the sci­en­tif­ic com­mu­ni­ty about biose­cu­ri­ty breach­es in high con­tain­ment bio­log­i­cal labs in the U.S. and glob­al­ly.33 There were legit­i­mate fears that a lab-cre­at­ed super­flu pathogen might escape the con­fines of biose­cu­ri­ty labs where researchers are con­duct­ing exper­i­ments. It’s a rea­son­able fear, cer­tain­ly, con­sid­er­ing that there have been many safe­ty breach­es at bio­labs in the U.S. and oth­er coun­tries.34,35,36,37

The fed­er­al mora­to­ri­um on lethal virus exper­i­ments in the U.S. was lift­ed at the end of Decem­ber 2017,38 even though researchers announced in 2015 they had cre­at­ed a lab-cre­at­ed hybrid coro­n­avirus sim­i­lar to that of SARS that was capa­ble of infect­ing both human air­way cells and mice.

The NIH had allowed the con­tro­ver­sial research to pro­ceed because it had begun before the mora­to­ri­um was put in place — a deci­sion crit­i­cized by Simon Wain-Hob­son, a virol­o­gist at Pas­teur Insti­tute in Paris, who point­ed out that “If the [new] virus escaped, nobody could pre­dict the tra­jec­to­ry.“39

Oth­ers, such as Richard Ebright, a mol­e­c­u­lar biol­o­gist and biode­fence expert at Rut­gers Uni­ver­si­ty, agreed, say­ing “The only impact of this work is the cre­ation, in a lab, of a new, non-nat­ur­al risk.“40

Wuhan is Home to Lab Study­ing World’s Lat­est Pathogens

In Jan­u­ary 2018, Chi­na’s first max­i­mum secu­ri­ty virol­o­gy lab­o­ra­to­ry (biose­cu­ri­ty lev­el 4) designed for the study of the world’s most dan­ger­ous pathogens opened its doors — in Wuhan.41,42 Is it pure coin­ci­dence that Wuhan City is now the epi­cen­ter of this nov­el coro­n­avirus infec­tion? 

The year before, Tim Tre­van, a Mary­land biosafe­ty con­sul­tant, expressed con­cern about viral threats poten­tial­ly escap­ing the Wuhan Nation­al Biosafe­ty Lab­o­ra­to­ry,43 which hap­pens to be locat­ed just 20 miles from the Wuhan mar­ket iden­ti­fied as ground zero for the cur­rent NCIP out­break.44 As report­ed by the Dai­ly Mail:45

“The Wuhan lab is also equipped for ani­mal research,” and “Reg­u­la­tions for ani­mal research — espe­cial­ly that con­duct­ed on pri­mates — are much loos­er in Chi­na than in the U.S. and oth­er West­ern coun­tries … But that was also cause for con­cern for Tre­van. 

Study­ing the behav­ior of a virus like 209-nCoV and devel­op­ing treat­ments or vac­cines for it requires infect­ing these research mon­keys, an impor­tant step before human test­ing. 

Mon­keys are unpre­dictable though, warned [Rut­gers Uni­ver­si­ty micro­bi­ol­o­gist Dr. Richard] Ebright. ‘They can run, they can scratch they can bite,’ he said, and the virus­es they car­ry would go where their feet, nails and teeth do.’ ” 

Coro­n­avirus Out­break Sim­u­la­tion Took Place in Octo­ber 2019

Equal­ly curi­ous is the fact that Johns Hop­kins Cen­ter for Health Secu­ri­ty, the World Eco­nom­ic Forum and the Bill and Melin­da Gates Foun­da­tion spon­sored a nov­el coro­n­avirus pan­dem­ic pre­pared­ness exer­cise Octo­ber 18, 2019, in New York called “Event 201.“46 The sim­u­la­tion pre­dict­ed a glob­al death toll of 65 mil­lion peo­ple with­in a span of 18 months.47 As report­ed by Forbes Decem­ber 12, 2019:48

“The experts ran through a care­ful­ly designed, detailed sim­u­la­tion of a new (fic­tion­al) viral ill­ness called CAPS or coro­n­avirus acute pul­monary syn­drome. This was mod­eled after pre­vi­ous epi­demics like SARS and MERS.” 

Sounds exact­ly like NCIP, does­n’t it? Yet the new coro­n­avirus respon­si­ble for NCIP had not yet been iden­ti­fied at the time of the sim­u­la­tion, and the first case was­n’t report­ed until two months lat­er. 

Forbes also refers to the fic­tion­al pan­dem­ic as “Dis­ease X” — the same des­ig­na­tion used by The Tele­graph in its Jan­u­ary 24, 2020, video report, “Could This Coro­n­avirus be Dis­ease X?“49 which sug­gests that media out­lets were briefed and there was coor­di­na­tion ahead of time with regard to use of cer­tain key­words and catch­phras­es in news reports and opin­ion arti­cles. 

Johns Hop­kins Uni­ver­si­ty (JHU) is the biggest recip­i­ent of research grants from fed­er­al agen­cies, includ­ing the Nation­al Insti­tutes of Health, Nation­al Sci­ence Foun­da­tion and Depart­ment of Defense and has received mil­lions of dol­lars in research grants from the Gates Foun­da­tion.50 In 2016, Johns Hop­kins spent more than $2 bil­lion on research projects, lead­ing all U.S. uni­ver­si­ties in research spend­ing for the 38th year in a row.51

If research fund­ed by fed­er­al agen­cies, such as the DOD or HHS is clas­si­fied as being per­formed “in the inter­est of nation­al secu­ri­ty,” it is exempt from Free­dom of Infor­ma­tion Act (FOIA) requests.52

Research con­duct­ed under the Bio­med­ical Advanced Research and Devel­op­ment Author­i­ty (BARDA) is com­plete­ly shield­ed from FOIA requests by the pub­lic.53 Addi­tion­al­ly, agen­cies may deny FOIA requests and with­hold infor­ma­tion if gov­ern­ment offi­cials con­clude that shield­ing it from pub­lic view “pro­tects trade secrets and com­mer­cial or finan­cial infor­ma­tion which could harm the com­pet­i­tive pos­ture or busi­ness inter­ests of a com­pa­ny.“54

The U.S. Cen­ters for Dis­ease Con­trol and Pre­ven­tion under the U.S. Depart­ment of Health and Human Ser­vices states that its mis­sion is “to pro­tect Amer­i­ca from health, safe­ty and secu­ri­ty threats, both for­eign and in the U.S.“55 Clear­ly, it will be dif­fi­cult to obtain infor­ma­tion about gov­ern­ment-fund­ed bio­med­ical research on microbes like coro­n­avirus con­duct­ed at major uni­ver­si­ties or by phar­ma­ceu­ti­cal cor­po­ra­tions in bio­haz­ard labs. 

How like­ly is it, then, that the coro­n­avirus out­break mak­ing peo­ple so sick today “sud­den­ly” emerged sim­ply because peo­ple ate bats and snakes in a Wuhan mar­ket? It looks more like a biose­cu­ri­ty acci­dent but, until more is known, inevitably there will be more ques­tions than answers about whether this lat­est glob­al pub­lic health emer­gency is a more ambi­tious tac­ti­cal “sand table exer­cise,” echo­ing unan­swered ques­tions about the 2009 swine flu pan­dem­ic fias­co. 

This time, there could be a lot more bod­ies left on the field, although some sta­tis­ti­cians con­duct­ing ben­e­fit cost analy­ses may con­sid­er 65 mil­lion casu­al­ties in a glob­al human pop­u­la­tion of 7.8 bil­lion peo­ple56 to be rel­a­tive­ly small when advanc­ing med­ical research con­duct­ed in the name of “the greater good.”

6. Next, the pro­gram under­takes an exam­i­na­tion of cir­cum­stances that sug­gest the pos­si­bil­i­ty of investor activ­i­ty by peo­ple linked to Steve Ban­non, who is at the epi­cen­ter of the anti-Chi­na effort. Ban­non has been the ben­e­fi­cia­ry of the enor­mous wealth of the bril­liant, eccen­tric investor Robert Mer­cer. Mer­cer has used AI-direct­ed invest­ment pro­jec­tion to afford a 70% return for his hedge fund. We won­der if he might have had fore­knowl­edge of the coro­n­avirus out­break?

IF that was the case, this would have enabled him to have made a great deal of mon­ey on the tor­pe­do­ing of the Chi­nese econ­o­my.

NB: The infor­ma­tion from Dr. Mer­co­la’s post should be fac­tored in to the infor­ma­tion about invest­ing and the pos­si­bil­i­ty of short-sell­ing and/or oth­er types of maneu­ver­ing to prof­it from this cri­sis. Equi­ty mar­kets are very respon­sive to sug­ges­tion, accu­rate or fala­cious. We note that the hys­te­ria allud­ed to in the post by Dr. Mer­co­la may well con­tribute to the steep decline in mar­kets. Chi­na, of course, has shut down much of its infra­struc­ture to com­bat the virus. That is con­tribut­ing, obvi­ous­ly. To what extent they, too, are respond­ing to hys­te­ria is an open ques­tion.

We also won­der if they know some­thing we don’t. Media have fea­tured pic­tures of Chi­nese per­son­nel in pro­tec­tive cloth­ing fumi­gat­ing pub­lic facil­i­ties. We won­der if they are pro­tect­ing against rodents or oth­er ani­mals spread­ing the virus. Note the ref­er­ence in the post by Dr. Mer­co­la:

It Came From Some­thing Awful: How a Tox­ic Troll Army Acci­den­tal­ly Memed Don­ald Trump into Office by Dale Beran; All Points Books [HC]; Copy­right 2019 by Dale Beran; ISBN 978–1‑250–18974‑5; p. 173.

 . . . . In the 1970s, Mer­cer pro­grammed machine-learn­ing arti­fi­cial intel­li­gences to process vast sets of data and so pre­dict what was sup­posed to be the cen­tral mys­tery of cap­i­tal­ism, the move­ment of mar­kets. And, well, they did–and still do. The hedge fund for which Mer­cer worked, Renais­sance Tech­nolo­gies, has earned an aver­age of 70 per­cent each year, mak­ing Mer­cer one of the rich­est men on the plan­et. . . .

7a. In addi­tion to the Mercer/Bannon/investment con­sid­er­a­tion, we note that Steve Ban­non–at the epi­cen­ter of the anti-Chi­na move­ment–is pro­fes­sion­al­ly aligned with an exiled Chi­nese bil­lion­aire and a wealthy Texas hedge fund man­ag­er posi­tioned to make a great deal of mon­ey from a down­turn in Chi­na’s mar­kets.

  • G News is dis­sem­i­nat­ing dis­in­for­ma­tion about the coro­n­avirus:  ” . . . . On Jan. 25, G News pub­lished a false sto­ry say­ing the Chi­nese gov­ern­ment was prepar­ing to admit that the coro­n­avirus orig­i­nat­ed in one of its labs. It did not, but the arti­cle still racked up over 19,000 tweets and 18,000 Face­book engage­ments, accord­ing to social track­ing web­site Buz­zSumo. . . .
  • 4chan and 2chan have been ampli­fy­ing the dis­in­for­ma­tion about the coro­n­avirus, echo­ing the false­hood that the Chi­nese gov­ern­ment spread the virus. ” . . . . The web­site also pub­lished a ques­tion­able doc­u­ment that fed a con­spir­a­cy that the Chi­nese mil­i­tary spread the dis­ease delib­er­ate­ly. That doc­u­ment, which seems to have come from G News orig­i­nal­ly, has been pop­u­lar on anony­mous mes­sage boards like 4chan and 2chan. . . .”
  • G News and its funder–Guo Wengui–are pro­fes­sion­al­ly asso­ci­at­ed with Steve Ban­non. ” . . . . G News is part of Guo Media, a project fund­ed by Chi­nese bil­lion­aire Guo Wen­gui, also known as Miles Kwok and Miles Guo. . . . In August 2018, Guo’s orga­ni­za­tion signed what Axios report­ed to be a $1 mil­lion con­tract with Steve Ban­non, for­mer White House strate­gist and for­mer chair of the hyper­par­ti­san news site Bre­it­bart. The con­tract required Ban­non to make intro­duc­tions to ‘media per­son­al­i­ties’ and advise on ‘indus­try stan­dards,’ accord­ing to Axios. Guo and Ban­non fre­quent­ly appear togeth­er in videos on G News that attack the Chi­nese gov­ern­ment. . . .”
  • Asso­ci­at­ed with Steve Ban­non and G News is Dal­las-based hedge fund man­ag­er J. Kyle Bass, who is posi­tioned to make a great deal of mon­ey over a down­turn in the Chi­nese econ­o­my. ” . . . . Anoth­er per­son con­nect­ed to G News, hedge fund man­ag­er J. Kyle Bass, also spread a false coro­n­avirus claim in a tweet. His hedge fund report­ed­ly had invest­ments that will increase in val­ue if the Chi­nese econ­o­my fails . . . . Bass has remained a Chi­na crit­ic, fre­quent­ly echo­ing Ban­non.”
  • Bass, too, is tweet­ing dis­in­for­ma­tion about the virus: ” . . . . ‘A hus­band and wife Chi­nese spy team were recent­ly removed from a Lev­el 4 Infec­tious Dis­ease facil­i­ty in Cana­da for send­ing pathogens to the Wuhan facil­i­ty. The hus­band spe­cial­ized in coro­n­avirus research,’ Bass tweet­ed, link­ing to a CBC News arti­cle that did not sup­port his claim. . . .”
  • Bass has no inten­tion of remov­ing his tweet, and is chair­man of a foun­da­tion that adver­tis­es on G News. . . . . When asked about his tweet, Bass said he had no plan to remove it. ‘I am extreme­ly con­cerned about the spread of mis­in­for­ma­tion about the coro­n­avirus by the Chi­nese gov­ern­ment,’ he said. Bass is the chair of the Rule of Law Foun­da­tion, a non­prof­it that runs ban­ner ads at the top and bot­tom of the G News web­site solic­it­ing dona­tions. . . .”
  • Bass denies any link between the Rule of Law Foun­da­tion and the Rule of Law Fund, found­ed by Guo and Ban­non, a claim of which we are skep­ti­cal. ” . . . . He also claimed that the Rule of Law Foun­da­tion was sep­a­rate from the $100 mil­lion fund start­ed by Guo and Ban­non called the Rule of Law Fund. . . .”

“A Site Tied To Steve Ban­non Is Writ­ing Fake News About The Coro­n­avirus” by Jane Lytvy­nenko; Buz­zFeed News; 02/03/2020

A web­site that pub­lished two false coro­n­avirus claims, which paint­ed Chi­na in a neg­a­tive light, pre­vi­ous­ly had a con­tract with for­mer White House chief strate­gist Steve Ban­non and was cre­at­ed by an exiled Chi­nese bil­lion­aire and crit­ic of the rul­ing Com­mu­nist Par­ty.

On Jan. 25, G News pub­lished a false sto­ry say­ing the Chi­nese gov­ern­ment was prepar­ing to admit that the coro­n­avirus orig­i­nat­ed in one of its labs. It did not, but the arti­cle still racked up over 19,000 tweets and 18,000 Face­book engage­ments, accord­ing to social track­ing web­site Buz­zSumo. The sto­ry was debunked by Face­book fact-check­ing part­ner Poli­ti­Fact.

The web­site also pub­lished a ques­tion­able doc­u­ment that fed a con­spir­a­cy that the Chi­nese mil­i­tary spread the dis­ease delib­er­ate­ly. That doc­u­ment, which seems to have come from G News orig­i­nal­ly, has been pop­u­lar on anony­mous mes­sage boards like 4chan and 2chan.

G News is part of Guo Media, a project fund­ed by Chi­nese bil­lion­aire Guo Wen­gui, also known as Miles Kwok and Miles Guo. He fled Chi­na in 2014 and has been accused of bribery, mon­ey laun­der­ing, and fraud by the main­land gov­ern­ment. He has denied the charges, call­ing them polit­i­cal­ly moti­vat­ed, and has become a vocal crit­ic of Bei­jing.

In August 2018, Guo’s orga­ni­za­tion signed what Axios report­ed to be a $1 mil­lion con­tract with Steve Ban­non, for­mer White House strate­gist and for­mer chair of the hyper­par­ti­san news site Bre­it­bart. The con­tract required Ban­non to make intro­duc­tions to “media per­son­al­i­ties” and advise on “indus­try stan­dards,” accord­ing to Axios. Guo and Ban­non fre­quent­ly appear togeth­er in videos on G News that attack the Chi­nese gov­ern­ment.

Anoth­er per­son con­nect­ed to G News, hedge fund man­ag­er J. Kyle Bass, also spread a false coro­n­avirus claim in a tweet. His hedge fund report­ed­ly had invest­ments that will increase in val­ue if the Chi­nese econ­o­my fails, but he told Buz­zFeed News he no longer holds “any Chi­nese equi­ty posi­tions what­so­ev­er.” Bass has remained a Chi­na crit­ic, fre­quent­ly echo­ing Ban­non.

“A hus­band and wife Chi­nese spy team were recent­ly removed from a Lev­el 4 Infec­tious Dis­ease facil­i­ty in Cana­da for send­ing pathogens to the Wuhan facil­i­ty. The hus­band spe­cial­ized in coro­n­avirus research,” Bass tweet­ed, link­ing to a CBC News arti­cle that did not sup­port his claim.

His tweet gar­nered almost 13,000 retweets and caused Cana­di­an offi­cials to issue a clar­i­fi­ca­tion deny­ing that coro­n­avirus was stolen from the Win­nipeg lab. “This is mis­in­for­ma­tion and there is no fac­tu­al basis for claims being made on social media,” Eric Mor­ris­sette, the chief of media rela­tions for Health Cana­da and the Pub­lic Health Agency of Cana­da, told CBC News.

When asked about his tweet, Bass said he had no plan to remove it.

“I am extreme­ly con­cerned about the spread of mis­in­for­ma­tion about the coro­n­avirus by the Chi­nese gov­ern­ment,” he said.

Bass is the chair of the Rule of Law Foun­da­tion, a non­prof­it that runs ban­ner ads at the top and bot­tom of the G News web­site solic­it­ing dona­tions. He said he had no affil­i­a­tion with the site.

“I have noth­ing to do with G News or its con­tent,” he said. “Guo Wen­gui has no lead­er­ship posi­tion, oper­at­ing con­trol, or legal posi­tion with the Rule of Law Foun­da­tion.”

Bass added that he hadn’t “read any G News sto­ry. Peri­od.” He also claimed that the Rule of Law Foun­da­tion was sep­a­rate from the $100 mil­lion fund start­ed by Guo and Ban­non called the Rule of Law Fund.

Aside from Guo’s site shar­ing false infor­ma­tion dur­ing the coro­n­avirus out­break, he has been a source of con­tro­ver­sy since arriv­ing in the US. Accord­ing to Politi­co, he is involved in a legal dis­pute stem­ming from his alleged hir­ing of a pri­vate inves­ti­ga­tion firm to dig up dirt on Chi­nese nation­als.

After being exiled from Chi­na, he has faced accu­sa­tions of both finan­cial and sex­u­al mis­con­duct, includ­ing a rape alle­ga­tion from a for­mer assis­tant. Guo has main­tained his inno­cence, say­ing that alle­ga­tions were polit­i­cal­ly moti­vat­ed.

———-

7b. Sup­ple­ment­ing the pre­vi­ous arti­cle about Ban­non, J. Kyle Bass and Guo Wen­gui, we note that Bass is close to, and may well be a co-investor with, Tom­my Hicks Jr., a key mem­ber of Team Trump. Hicks, Com­merce Sec­re­tary Wilbur Ross and nation­al secu­ri­ty offi­cials are, in turn, work­ing to deny Chi­nese elec­tron­ics firm Huawei access to devel­op­ing 5G net­works, fur­ther ham­string­ing the Chi­nese econ­o­my.

Paul Krug­man, among oth­ers, has not­ed that Wilbur Ross was open­ly cel­e­brat­ing the coro­n­avirus as a boon to the Unit­ed States.

We high­light key aspects of this dis­cus­sion:

  • Tom­my Hicks is at the epi­cen­ter of Trump admin­is­tra­tion maneu­ver­ing that, ulti­mate­ly, will hurt Chi­na eco­nom­i­cal­ly (and will ben­e­fit the invest­ments of J. Kyle Bass.) Hic Over the past two years, the Trump admin­is­tra­tion has been grap­pling with how to han­dle the tran­si­tion to the next gen­er­a­tion of mobile broad­band tech­nol­o­gy. With spend­ing expect­ed to run into hun­dreds of bil­lions of dol­lars, the admin­is­tra­tion views it as an ultra-high-stakes com­pe­ti­tion between U.S. and Chi­nese com­pa­nies, with enor­mous impli­ca­tions both for tech­nol­o­gy and for nation­al secu­ri­ty. Top offi­cials from a raft of depart­ments have been meet­ing to hash out the best approach. But there’s been one per­son at some of the dis­cus­sions who has a dif­fer­ent back­ground: He’s Don­ald Trump Jr.’s hunt­ing bud­dy. . . .”
  • Hicks is not a gov­ern­ment offi­cial but has access to high-lev­el gov­ern­men­tal process, includ­ing (appar­ent­ly) CIA activ­i­ties. ” . . . . Tom­my Hicks Jr., 41, isn’t a gov­ern­ment offi­cial; he’s a wealthy pri­vate investor. And he has been a part of dis­cus­sions relat­ed to Chi­na and tech­nol­o­gy with top offi­cials from the Trea­sury Depart­ment, Nation­al Secu­ri­ty Coun­cil, Com­merce Depart­ment and oth­ers, accord­ing to emails and doc­u­ments obtained by ProP­ub­li­ca. In one email, Hicks refers to a meet­ing at ‘Lan­g­ley,’ an appar­ent ref­er­ence to the CIA’s head­quar­ters. . . .”
  • Hicks has used his posi­tion to arrange for J. Kyle Bass to net­work with gov­ern­ment agen­cies and offi­cials. Bear in mind that Bass is posi­tioned to ben­e­fit from a down­turn in Chi­na’s econ­o­my. ” . . . . Hicks used his con­nec­tions to arrange for a hedge fund man­ag­er friend, Kyle Bass — who has $143 mil­lion in invest­ments that will pay off if China’s econ­o­my tanks — to present his views on the Chi­nese econ­o­my to high-lev­el gov­ern­ment offi­cials at an inter­a­gency meet­ing at the Trea­sury Depart­ment, accord­ing to the doc­u­ments. . . .”
  • Hicks is no co-chair­man of the Repub­li­can Nation­al Com­mit­tee. ” . . . . Hicks lever­aged his Dal­las finan­cial net­work to become a top Trump cam­paign fundrais­er in 2016 and a vice chair­man of the inau­gur­al finance com­mit­tee; in Jan­u­ary, he was named co-chair­man of the Repub­li­can Nation­al Com­mit­tee. . . . ”
  • In addi­tion to his rela­tion­ship with Don­ald Trump, Jr., Hicks is net­worked with Jared Kush­n­er. ” . . . . Even before becom­ing the sec­ond high­est-rank­ing GOP offi­cial, Hicks was a fre­quent White House guest. He liked to have lunch in the White House mess with his half sis­ter, who worked for a time in the com­mu­ni­ca­tions oper­a­tion. . . .  Hicks would then stroll the halls, accord­ing to a for­mer senior admin­is­tra­tion offi­cial, drop­ping in to offices for impromp­tu chats with var­i­ous offi­cials, includ­ing Jared Kush­n­er. Those sorts of con­nec­tions have giv­en Hicks a con­ven­ing pow­er, the abil­i­ty to call togeth­er mul­ti­ple offi­cials. . . . ”
  • Again, Hicks net­work­ing can influ­ence pol­i­cy­mak­ing that could dam­age Chi­na eco­nom­i­cal­ly and assist Bass. ” . . . . ‘He basi­cal­ly opened the door for hav­ing a con­ver­sa­tion with peo­ple who I didn’t know but need­ed to know,’ said Robert Spald­ing, a for­mer senior direc­tor for strate­gic plan­ning at the Nation­al Secu­ri­ty Coun­cil dur­ing the Trump admin­is­tra­tion. The efforts, detailed in hun­dreds of pages of gov­ern­ment emails and oth­er doc­u­ments obtained under the Free­dom of Infor­ma­tion Act, show that Hicks had access to the high­est lev­els of gov­ern­ment to influ­ence pol­i­cy­mak­ing in ways that could lead to painful eco­nom­ic out­comes for the Chi­nese — and a poten­tial­ly lucra­tive result for Hicks’ hedge fund friend, Bass. . . .”
  • Hicks and Bass have invest­ed togeth­er since 2011. ” . . . . Bass pre­sent­ed his views on China’s bank­ing sys­tem in the office of Heath Tar­bert, an assis­tant sec­re­tary at Trea­sury in charge of inter­na­tion­al mar­kets and invest­ment pol­i­cy and a pow­er­ful inter­gov­ern­men­tal com­mit­tee that reviews for­eign invest­ments in the U.S. for nation­al secu­ri­ty con­cerns. Among the offi­cials at the meet­ing with Tar­bert were Bill Hin­man, the direc­tor of the divi­sion of cor­po­ra­tion finance at the Secu­ri­ties and Exchange Com­mis­sion, and Ray Wash­burne, a wealthy Dal­las restau­rant own­er and fam­i­ly friend of Hicks’ who was nom­i­nat­ed by Trump to head the Over­seas Pri­vate Invest­ment Cor­po­ra­tion. Hicks and Bass, both Dal­las res­i­dents and long­time denizens of the finan­cial com­mu­ni­ty there, have invest­ed togeth­er since at least 2011, accord­ing to secu­ri­ties fil­ings and court records. . . .”
  • Hicks did not deny that he par­tic­i­pat­ed in Bass’s funds, but was eva­sive.” . . . . But it’s not clear if Hicks or his fam­i­ly have an invest­ment in Bass’ Chi­na-relat­ed funds. Reached twice on his cell­phone, Hicks declined to be inter­viewed by ProP­ub­li­ca. In the sec­ond call, in June, Hicks didn’t dis­pute that he and his fam­i­ly have invest­ed in Bass’ funds. But when asked to detail their busi­ness rela­tion­ship, he cut the con­ver­sa­tion short. . . . ”
  • Bass has a his­to­ry of bet­ting against trends that will turn down­ward, hav­ing made his for­tune on the 2008 crash. ” . . . . Bass, who made his name and for­tune by bet­ting against sub­prime mort­gages before the crash and is known for large bets that economies or cer­tain macro trends will turn down­ward, declined to com­ment. . . .”
  • Offi­cial review did not exam­ine pos­si­ble busi­ness rela­tion­ships between Hicks and Bass. H” . . . . An admin­is­tra­tion offi­cial briefed on the Bass meet­ing at the Trea­sury down­played it as ‘strict­ly a lis­ten­ing ses­sion.’ . . . . He acknowl­edged that the review didn’t include an exam­i­na­tion of any finan­cial rela­tion­ship between Hicks and Bass. . . .”
  • Bass is posi­tioned to main­tain “mas­sive asym­me­try” to down turns in Hong Kong and Chi­na, in oth­er words, he will ben­e­fit if they go down. ” . . . . Bass has become a vocal advo­cate for an aggres­sive U.S. pol­i­cy toward Chi­na. On Twit­ter and on cable busi­ness chan­nels he’s denounced every­thing from the country’s Com­mu­nist Par­ty gov­ern­ment to its busi­ness prac­tices. Secu­ri­ties fil­ings show Bass raised $143 mil­lion from about 81 investors in two funds — invest­ments that would ben­e­fit if China’s cur­ren­cy were deval­ued or the coun­try faced cred­it or bank­ing crises. In April, in a let­ter to his investors, Bass wrote that his com­pa­ny, Hay­man Cap­i­tal Man­age­ment, was posi­tioned for com­ing prob­lems in Hong Kong and was set up to ‘main­tain a mas­sive asym­me­try to a neg­a­tive out­come in Hong Kong and/or Chi­na.’ . . . ”
  • Hicks has net­worked with Wilbur Ross, who has open­ly cel­e­brat­ed the coro­n­avirus out­break. Ross is deeply involved with the 5G maneu­ver­ing.” . . . . Hicks’ work on the 5G ini­tia­tive was exten­sive. . . . .  he was part of an infor­mal group led by then NSC offi­cial Spald­ing, that advo­cat­ed for a strat­e­gy in which the fed­er­al gov­ern­ment would plan out a nation­al pol­i­cy for 5G. . . . That same month Hicks attend­ed a 5G meet­ing that he’d arranged with Com­merce Sec­re­tary Wilbur Ross. Com­merce plays a key role in the future of 5G since a divi­sion with­in the agency man­ages gov­ern­ment spec­trum and anoth­er main­tains a list of com­pa­nies the gov­ern­ment believes are, or will become, nation­al secu­ri­ty threats. Com­pa­nies that end up on that list can be effec­tive­ly shut out from glob­al deal-mak­ing. The meet­ing with Ross focused heav­i­ly on the threat of Chi­na, said Ira Green­stein, who served as a White House aide and was part of Spalding’s 5G crew. . . .”
  • Hicks is net­work­ing with ele­ments in Tai­wan with regard to the 5G devel­op­ments. ” . . . . It isn’t clear what influ­ence, if any, Hicks had in those deci­sions. But his pro­file is only ris­ing. In April, he led a Repub­li­can del­e­ga­tion to Tai­wan along­side a U.S. gov­ern­ment del­e­ga­tion. Hicks met with the country’s pres­i­dent, Tsai Ing-wen, who has late­ly been posi­tion­ing her country’s cor­po­ra­tions as safer providers of 5G equip­ment than those in Chi­na. Tsai thanked the U.S. for sell­ing arms to Tai­wan. She asked Hicks to con­vey her regards to the Trumps. . . .”

“Want to Meet With the Trump Admin­is­tra­tion? Don­ald Trump Jr.’s Hunt­ing Bud­dy Can Help” by Jake Pear­son; ProP­ub­li­ca; 07/22/2019

Over the past two years, the Trump admin­is­tra­tion has been grap­pling with how to han­dle the tran­si­tion to the next gen­er­a­tion of mobile broad­band tech­nol­o­gy. With spend­ing expect­ed to run into hun­dreds of bil­lions of dol­lars, the admin­is­tra­tion views it as an ultra-high-stakes com­pe­ti­tion between U.S. and Chi­nese com­pa­nies, with enor­mous impli­ca­tions both for tech­nol­o­gy and for nation­al secu­ri­ty. Top offi­cials from a raft of depart­ments have been meet­ing to hash out the best approach.

But there’s been one per­son at some of the dis­cus­sions who has a dif­fer­ent back­ground: He’s Don­ald Trump Jr.’s hunt­ing bud­dy. Over the past two decades, the two have trained their sights on duck, pheas­ant and white-tailed deer on mul­ti­ple con­ti­nents. (An email from anoth­er Trump Jr. pal char­ac­ter­ized one of their joint duck-hunt­ing trips to Mex­i­co years ago as “muy aggre­si­vo.”)

Tom­my Hicks Jr., 41, isn’t a gov­ern­ment offi­cial; he’s a wealthy pri­vate investor. And he has been a part of dis­cus­sions relat­ed to Chi­na and tech­nol­o­gy with top offi­cials from the Trea­sury Depart­ment, Nation­al Secu­ri­ty Coun­cil, Com­merce Depart­ment and oth­ers, accord­ing to emails and doc­u­ments obtained by ProP­ub­li­ca. In one email, Hicks refers to a meet­ing at “Lan­g­ley,” an appar­ent ref­er­ence to the CIA’s head­quar­ters.

Hicks’ finan­cial inter­ests, if any, in the mat­ters he has dis­cussed aren’t clear. The inter­ests are much more appar­ent when it comes to at least one of his asso­ciates. Hicks used his con­nec­tions to arrange for a hedge fund man­ag­er friend, Kyle Bass — who has $143 mil­lion in invest­ments that will pay off if China’s econ­o­my tanks — to present his views on the Chi­nese econ­o­my to high-lev­el gov­ern­ment offi­cials at an inter­a­gency meet­ing at the Trea­sury Depart­ment, accord­ing to the doc­u­ments.

Hicks is hard­ly the first pri­vate-sec­tor pow­er bro­ker to emerge in a pres­i­den­tial admin­is­tra­tion, but he may rep­re­sent a new sub­species: The Friend of the President’s Kid.

In fact, Hicks’ influ­ence and career over­whelm­ing­ly hinge on two peo­ple: Trump Jr., his friend of about two decades, and, first and fore­most, Hicks’ father. In a rough­ly 20-year career, Hicks has spent 17 of them work­ing for invest­ment funds and sports teams owned by his wealthy financier dad, Thomas Hicks Sr., and the oth­er three work­ing for a client of his father.

The gen­er­al­ly priv­i­leged life of the younger Hicks has been speck­led with occa­sion­al instances of mis­be­hav­ior, one of them seri­ous. At age 18, he plead­ed no con­test to mis­de­meanor assault, reduced from an orig­i­nal charge of felony aggra­vat­ed assault, after he and two oth­ers were arrest­ed in the beat­ing of a fel­low high school stu­dent at a par­ty. (The vic­tim was also kicked in the face dur­ing the assault, accord­ing to peo­ple famil­iar with the case. He told police that one of the three assailants — he didn’t say which — asked him, “What is your name, fag­got?”) The crim­i­nal con­vic­tion did not pre­vent Hicks from being admit­ted to the Uni­ver­si­ty of Texas, where his father was an alum­nus, a mem­ber of the Board of Regents and soon there­after the first chair­man of the Uni­ver­si­ty of Texas Invest­ment Man­age­ment Com­pa­ny, which man­ages the school’s endow­ment and oth­er assets.

As an adult, friends say, Hicks’ carous­ing ways and occa­sion­al bel­liger­ent out­bursts led some in his cir­cle to bestow a heav­i­ly iron­ic nick­name: “Sen­a­tor Hicks.” His tenure as a direc­tor of the soc­cer team his father owned in Liv­er­pool, Eng­land, a decade ago end­ed right after an email he sent to a heck­ling fan — “Blow me fuc kface. Go to Hell. I’m sick of you.” — sur­faced pub­licly.

Friends say Hicks has matured, par­tic­u­lar­ly since he mar­ried and had three daugh­ters. He has risen quick­ly in recent years. Hicks lever­aged his Dal­las finan­cial net­work to become a top Trump cam­paign fundrais­er in 2016 and a vice chair­man of the inau­gur­al finance com­mit­tee; in Jan­u­ary, he was named co-chair­man of the Repub­li­can Nation­al Com­mit­tee. His friends say he is moti­vat­ed by patri­o­tism.

Hicks also played a behind-the-scenes role, accord­ing to two peo­ple famil­iar with the mat­ter and an account by a Turk­ish jour­nal­ist, in the free­ing last year of Andrew Brun­son, an Amer­i­can pas­tor who was detained for two years by the Turk­ish gov­ern­ment on what the U.S. gov­ern­ment viewed as pho­ny charges of spy­ing and help­ing ter­ror­ists.

Even before becom­ing the sec­ond high­est-rank­ing GOP offi­cial, Hicks was a fre­quent White House guest. He liked to have lunch in the White House mess with his half sis­ter, who worked for a time in the com­mu­ni­ca­tions oper­a­tion. (The fam­i­ly is not relat­ed to Hope Hicks, the for­mer White House com­mu­ni­ca­tions direc­tor.) Hicks would then stroll the halls, accord­ing to a for­mer senior admin­is­tra­tion offi­cial, drop­ping in to offices for impromp­tu chats with var­i­ous offi­cials, includ­ing Jared Kush­n­er.

Those sorts of con­nec­tions have giv­en Hicks a con­ven­ing pow­er, the abil­i­ty to call togeth­er mul­ti­ple offi­cials. “He basi­cal­ly opened the door for hav­ing a con­ver­sa­tion with peo­ple who I didn’t know but need­ed to know,” said Robert Spald­ing, a for­mer senior direc­tor for strate­gic plan­ning at the Nation­al Secu­ri­ty Coun­cil dur­ing the Trump admin­is­tra­tion.

The efforts, detailed in hun­dreds of pages of gov­ern­ment emails and oth­er doc­u­ments obtained under the Free­dom of Infor­ma­tion Act, show that Hicks had access to the high­est lev­els of gov­ern­ment to influ­ence pol­i­cy­mak­ing in ways that could lead to painful eco­nom­ic out­comes for the Chi­nese — and a poten­tial­ly lucra­tive result for Hicks’ hedge fund friend, Bass.

“When some­body comes in like this, a hedge fund man­ag­er who has an inter­est in the via­bil­i­ty of China’s econ­o­my, you’re giv­ing them an oppor­tu­ni­ty to influ­ence pol­i­cy,” said Vir­ginia Can­ter, a for­mer ethics lawyer at the Trea­sury Depart­ment who now serves as chief ethics coun­sel for Cit­i­zens for Respon­si­bil­i­ty and Ethics in Wash­ing­ton, a watch­dog group. (CREW has sued Don­ald Trump for accept­ing emol­u­ments from for­eign gov­ern­ments.) “The ques­tion is why?”

Hicks’ unusu­al role as a non­govern­ment employ­ee who opened doors on behalf of both indus­try and oth­ers, Can­ter said, put him in a gray zone of ethics and lob­by­ing reg­u­la­tions. “He’s act­ing in a lob­by­ist role when he may fall out­side the lob­by­ist dis­clo­sure rules, and it’s not clear how he ben­e­fits finan­cial­ly,” she said. “So the ques­tion is: What’s he get­ting out of it? What are his friends get­ting out of it? And is the gov­ern­ment pro­cess­ing it in a way that ensures the pub­lic ben­e­fits?”

Bass pre­sent­ed his views on China’s bank­ing sys­tem in the office of Heath Tar­bert, an assis­tant sec­re­tary at Trea­sury in charge of inter­na­tion­al mar­kets and invest­ment pol­i­cy and a pow­er­ful inter­gov­ern­men­tal com­mit­tee that reviews for­eign invest­ments in the U.S. for nation­al secu­ri­ty con­cerns. Among the offi­cials at the meet­ing with Tar­bert were Bill Hin­man, the direc­tor of the divi­sion of cor­po­ra­tion finance at the Secu­ri­ties and Exchange Com­mis­sion, and Ray Wash­burne, a wealthy Dal­las restau­rant own­er and fam­i­ly friend of Hicks’ who was nom­i­nat­ed by Trump to head the Over­seas Pri­vate Invest­ment Cor­po­ra­tion.

Hicks and Bass, both Dal­las res­i­dents and long­time denizens of the finan­cial com­mu­ni­ty there, have invest­ed togeth­er since at least 2011, accord­ing to secu­ri­ties fil­ings and court records. They’ve owned shares of a pub­licly trad­ed com­mu­ni­ca­tions-tech­nol­o­gy man­u­fac­tur­er. And they were among the biggest cred­i­tors to the bank­rupt law enforce­ment con­tract­ing com­pa­ny run by Chris Kyle, the ex-Navy SEAL por­trayed by Bradley Coop­er in “Amer­i­can Sniper.” The man­ag­ing direc­tor of a new invest­ment fund start­ed by Hicks had pre­vi­ous­ly advised Bass on the suc­cess­ful stock-short­ing of a Texas real estate lender, accord­ing to cor­po­rate fil­ings and court papers from a law­suit in state court in Dal­las.

But it’s not clear if Hicks or his fam­i­ly have an invest­ment in Bass’ Chi­na-relat­ed funds. Reached twice on his cell­phone, Hicks declined to be inter­viewed by ProP­ub­li­ca. In the sec­ond call, in June, Hicks didn’t dis­pute that he and his fam­i­ly have invest­ed in Bass’ funds. But when asked to detail their busi­ness rela­tion­ship, he cut the con­ver­sa­tion short. “I’ve got to run. Let me see if I can get back to you,” Hicks said before hang­ing up. He didn’t call back.

Weeks lat­er, after ProP­ub­li­ca fol­lowed up with ques­tions to the RNC, a spokesman respond­ed by email­ing a “state­ment attrib­uted to Tom­my Hicks.” It read: “As a busi­ness­man, I pas­sion­ate­ly sup­port­ed caus­es I believed in and, if appro­pri­ate, would some­times meet with gov­ern­ment offi­cials to pro­mote them. There is noth­ing wrong with that. I have tak­en every pre­cau­tion dur­ing my time as Co-Chair of the RNC to ensure there is no con­flict of inter­est between my job here and any per­son­al busi­ness­es.” (The spokesper­son also emailed a state­ment on behalf of the RNC: “Tom­my has done an out­stand­ing job work­ing on behalf of Pres­i­dent Trump and his agen­da.”)

Bass, who made his name and for­tune by bet­ting against sub­prime mort­gages before the crash and is known for large bets that economies or cer­tain macro trends will turn down­ward, declined to com­ment. “I’m not inter­est­ed in talk­ing with you about my friends or any meet­ings I have or haven’t had pri­vate­ly with any­one,” he wrote in an email. In a sub­se­quent mes­sage, Bass wrote that any sug­ges­tion “that we had cor­rupt inten­tions in meet­ing with Trea­sury offi­cials… is cat­e­gor­i­cal­ly false and defam­a­to­ry and could neg­a­tive­ly affect our busi­ness.”

An admin­is­tra­tion offi­cial briefed on the Bass meet­ing at the Trea­sury down­played it as “strict­ly a lis­ten­ing ses­sion.” He said Bass did not ask the atten­dees to take any actions, nor did the atten­dees divulge any­thing about U.S.-China pol­i­cy. Gov­ern­ment ethics offi­cers vet­ted the fed­er­al employ­ees for any con­flicts and found none, the offi­cial said. He acknowl­edged that the review didn’t include an exam­i­na­tion of any finan­cial rela­tion­ship between Hicks and Bass.

Spald­ing said the con­ver­sa­tion cen­tered pri­mar­i­ly on Bass’ analy­sis of pub­licly avail­able records on the Chi­nese finan­cial sys­tem. “I think the thing that I’ve dis­cov­ered over the past years is that the infor­ma­tion in the pri­vate sec­tor is bet­ter than any­thing we have in gov­ern­ment,” Spald­ing said of Bass’ pre­sen­ta­tion. “You have to reach out to where the exper­tise is. In our coun­try, that’s where the tal­ent is.”

Bass has become a vocal advo­cate for an aggres­sive U.S. pol­i­cy toward Chi­na. On Twit­ter and on cable busi­ness chan­nels he’s denounced every­thing from the country’s Com­mu­nist Par­ty gov­ern­ment to its busi­ness prac­tices. Secu­ri­ties fil­ings show Bass raised $143 mil­lion from about 81 investors in two funds — invest­ments that would ben­e­fit if China’s cur­ren­cy were deval­ued or the coun­try faced cred­it or bank­ing crises. In April, in a let­ter to his investors, Bass wrote that his com­pa­ny, Hay­man Cap­i­tal Man­age­ment, was posi­tioned for com­ing prob­lems in Hong Kong and was set up to “main­tain a mas­sive asym­me­try to a neg­a­tive out­come in Hong Kong and/or Chi­na.”

Hicks’ work on the 5G ini­tia­tive was exten­sive.

Over just a few months in late 2017 and 2018, records show, he was part of an infor­mal group led by then NSC offi­cial Spald­ing, that advo­cat­ed for a strat­e­gy in which the fed­er­al gov­ern­ment would plan out a nation­al pol­i­cy for 5G. One memo described their goal as the “equiv­a­lent of the Eisen­how­er Nation­al High­way Sys­tem — a sin­gle, inher­ent­ly pro­tect­ed, infor­ma­tion trans­porta­tion super­high­way.”

The group con­duct­ed mul­ti­ple meet­ings and brief­in­gs. For exam­ple, Hicks, Spald­ing and oth­ers trav­eled to Sam­sung Elec­tron­ics’ Dal­las-area offices for one meet­ing in Jan­u­ary 2018.

That same month Hicks attend­ed a 5G meet­ing that he’d arranged with Com­merce Sec­re­tary Wilbur Ross. Com­merce plays a key role in the future of 5G since a divi­sion with­in the agency man­ages gov­ern­ment spec­trum and anoth­er main­tains a list of com­pa­nies the gov­ern­ment believes are, or will become, nation­al secu­ri­ty threats. Com­pa­nies that end up on that list can be effec­tive­ly shut out from glob­al deal-mak­ing. The meet­ing with Ross focused heav­i­ly on the threat of Chi­na, said Ira Green­stein, who served as a White House aide and was part of Spalding’s 5G crew.

Hicks was one of a dozen non­govern­ment employ­ees, includ­ing exec­u­tives from Wells Far­go, Nokia, Eric­s­son and Google, that Spald­ing sent read­ing mate­ri­als to ahead of a 5G dis­cus­sion in the Eisen­how­er Exec­u­tive Office Build­ing. Copied on the email were top Com­merce Depart­ment offi­cials, a Booz Allen Hamil­ton con­trac­tor and a senior advis­er for cyber­se­cu­ri­ty and IT mod­ern­iza­tion at the White House Office of Sci­ence and Tech­nol­o­gy. On the agen­da? “Mid Band vs High Band” spec­trum, “secu­ri­ty,” “sup­ply chain,” “financ­ing” and oth­er crit­i­cal issues.

Hicks wasn’t just a pas­sive observ­er. On Jan. 2, 2018, the man­ag­ing direc­tor of OPIC, which pro­vides finan­cial back­ing to Amer­i­can com­pa­nies expand­ing into for­eign mar­kets, emailed Spald­ing and oth­ers to say that the CEO of a satel­lite com­pa­ny called OneWeb had a plan to pro­vide world­wide 5G cov­er­age by 2027. Hicks fired back a note from his iPhone. “2027 is too late,” he wrote. “Let’s dis­cuss as a small­er group tomor­row.”

Spald­ing was forced out of the West Wing in ear­ly 2018 after a draft 20-page brief­ing memo he authored propos­ing a gov­ern­ment-orga­nized nation­al 5G net­work was leaked, then panned as an attempt to nation­al­ize the wire­less broad­band indus­try. Trump has not pur­sued such an ini­tia­tive, ulti­mate­ly defer­ring to wire­less car­ri­ers to bid on pub­licly main­tained spec­trum and devel­op their own net­works as has tra­di­tion­al­ly been the case.

Still, the admin­is­tra­tion has made sig­nif­i­cant efforts to counter Chi­nese influ­ence in 5G and relat­ed tech­nolo­gies, which are said to be crit­i­cal for indus­tries such as dri­ver­less cars, arti­fi­cial intel­li­gence, machine learn­ing and much more. In May the Com­merce Depart­ment barred Chi­nese tele­com equip­ment man­u­fac­tur­er Huawei from doing busi­ness in the U.S. for nation­al secu­ri­ty rea­sons. And the top Depart­ment of Defense offi­cial in charge of acqui­si­tions also recent­ly announced the cre­ation of a gov­ern­ment-approved pri­vate mar­ket­place to pair Amer­i­can pri­vate equi­ty firms with U.S. tech­nol­o­gy com­pa­nies pro­duc­ing prod­ucts with nation­al secu­ri­ty appli­ca­tions to keep Chi­nese mon­ey out of 5G.

It isn’t clear what influ­ence, if any, Hicks had in those deci­sions. But his pro­file is only ris­ing. In April, he led a Repub­li­can del­e­ga­tion to Tai­wan along­side a U.S. gov­ern­ment del­e­ga­tion. Hicks met with the country’s pres­i­dent, Tsai Ing-wen, who has late­ly been posi­tion­ing her country’s cor­po­ra­tions as safer providers of 5G equip­ment than those in Chi­na. Tsai thanked the U.S. for sell­ing arms to Tai­wan. She asked Hicks to con­vey her regards to the Trumps.

8. The pro­gram con­cludes with the read­ing of head­lines (and some text) from New York Times sto­ries about the eco­nom­ic effects of the coro­n­avirus out­break.

“Who Says Vis­it­ing Chi­na Isn’t Safe?” by Rosie Spinks; The New York Times; 2/7/2020; p. A29 [West­ern Edi­tion.]

. . . . The coro­n­avirus out­break seems defined by two oppos­ing foces: the astonin­ish­ing effi­cien­cy  with the trav­el indus­try con­nects the world and a polit­i­cal moment dom­i­nat­ed by xen­pho­bic rhetoric and the buildin­gof walls. . . .

. . . . The Unit­ed States State Depart­ment nev­er­the­less is deny­ing entry to for­eign­ers who have recent­ly been to Chi­na, and is screen­ing Amer­i­cans who arrive home from Chi­na as well as ask­ing them to self quar­an­tine for 14 days. It has told Amer­i­cans not to vis­it the coun­try at all. British Air­ways, Lufthansa and all three major Amer­i­can car­ri­ers have halt­ed all flights to Chi­na, while the cruise line Roy­al Caribbean is deny­ing board­ing to any per­son who has trav­eled to, from or through Chi­na or Hong Kong in the past 15 days. . . .

. . . . But what has moti­vat­ed the response from gov­ern­ments? It does­n’t appear to be evi­dence. . . .

. . . . Coro­n­avirus is dif­fer­ent from oth­er tourism dis­rup­tions in a sig­nif­i­cant way: The poten­tial loss of tourism rev­enue will hurt not only Chi­na but also oth­er coun­tries. In the decade and a half since the SARS cri­sis, the num­ber of Chi­nese trav­el­ers has soared, with Chi­na sur­pass­ing oth­er nations in its vol­ume of out­bound trav­el­ers start­ing in 2012. In 2017, the Chi­nese made more than 143 mil­lion trips abroad; my col­leagues at Skift Research pre­dict that in 2029, that fig­ure will be more than 286 mil­lion. Lux­u­ry retail­ers all over the world rely on Chi­nese trav­el­ers, and des­ti­na­tions devel­op sophis­ti­cat­ed mar­ket­ing strate­gies to cater to them. . . .

. . . . With the rhetoric sur­round­ing coro­n­avirus, how­ev­er, how­ev­er, it appears the aston­ish­ing growth of the Chi­nese trav­el mar­ket in the last 15 years did lit­tle to rid the indus­try of the impulse to treat Chi­nese trav­el­ers as “oth­ers” in the face of doubt and uncer­tain­ty. . . .

“Declar­ing Health Emer­gency, U.S. Restricts Trav­el from Chi­na” by Michael Cork­ery and Annie Karni; The New York Times; 2/1/2020; p. A1 [West­ern Edi­tion.]

. . . . The trav­el restric­tions and the air­line’s announce­ments showed how rapid­ly con­cerns about the virus have esca­lat­ed into a con­test of the glob­al econ­o­my, for which there is no prece­dent. Three weeks after the first virus-relat­ed death was report­ed, Chi­na has found itself cut off from its largest trad­ing part­ner, the Unit­ed States, and many oth­er nations. . . .

 

“Gov­ern­ments Expand Restric­tions on Trav­el to Chi­na as Cas­es Spike” by Paul Mozur; The New York Times; 1/29/2020; p. A6 [West­ern Edi­tion.]

. . . . With Chi­na’s Lunar New Year hol­i­day near­ing its end, com­pa­nies ordered work­ers to stay home and avoid trav­el. The eco­nom­ic impact of such mea­sures point­ed to a deep­er polit­i­cal cri­sis, with many peo­ple accus­ing the Chi­nese author­i­ties online of fail­ing to act quick­ly to con­tain the virus, even as the gov­ern­ment con­tin­ues to strug­gle to con­tain its spread. . . .

. . . . Busi­ness­es that oper­ate in Chi­na have issued warn­ings of their own. . . .

. . . . Investors in Asia were gripped on tues­day­with fear about the health of the glob­al econ­o­my for a sec­ond day, with a wide­spread sell-off con­tin­u­ing con­in­u­ing in the mar­kets. Investos dumped stocks in com­pa­nies thought to be most vul­ner­a­ble to the effects of the virus.

 “The coro­na virus is the No. 1 threat to finan­cial mar­kets cur­rent­ly as glob­al investors are becom­ing jit­tery on the uncer­tain­ty.” said Nigel Green, founder of an invest­ment com­pa­ny, the DeVere group . . .

 

“Trade Net­works Face New Men­ace in a Coro­n­avirus” Chi­na in Cross Hairs; by Peter S. Good­man; The New York Times; 2/3/2020; p. A1 [West­ern Edi­tion.]

 

“Chi­na Reels From Virus, and Mar­kets Are on Edge” by Alexan­dra Steven­son; The New York Times; 1/24/2020; p. B1 [West­ern Edi­tion.]

“Out­break Rat­tles Mar­kets, Spurring Down­turn Fears” by Matt Phillips; The New York Times; 1/28/2020; p. B1 [West­ern Edi­tion.]

 

On same page, rel­e­vant to psy­cho­log­i­cal war­fare and online activ­i­ty: “On Chi­nese Social Media, Anger over Virus” by Ray­mond Zhong; The New York Times; 1/28/2020; p. B1 [West­ern Edi­tion.]

 

“OPEC Scram­bles to React as Virus Imper­ils Demand” by Stan­ley Reed; The New York Times; 2/4/2020; p. B1 [West­ern Edi­tion.]

 

“Virus Threat­ens an Oil Indus­try That’s Already Ail­ing” by Clif­ford Krauss With a Decline in Chi­na’s Demand send­ing Crude Prices Lowe, Cut­backs by Amer­i­can Com­pa­nies May Be Com­ing; For Now, Dri­vers are ben­e­fit­ing; The New York Times; 2/5/2020; p. B1 [West­ern Edi­tion.]

 

“Africa, With Grow­ing Ties to Chi­na, Is Espe­cial­ly Vul­ner­a­ble” by Simon Marks and Latif Dahir; The New York Times; 2/7/2020; p. A10 [West­ern Edi­tion.]

 

“U.S. Plans Trade Talks With Kenya to Counter Chi­na’s Influ­ence in Africa” by Ana Swan­son; The New York Times; 2/7/2020; p. B4 [West­ern Edi­tion.]

 

“Chi­na’s Com­mand of 5G Is A ‘Dan­ger,’ Barr Says” by Katie Ben­ner; The New York Times; 2/7/2020; p. B7 [West­ern Edi­tion.]

 

“Virus Fuels Anti-Chi­nese Sen­ti­ment Over­seas” by Motoko Rich; The New York Times; 1/31/2020; p. A1 [West­ern Edi­tion.]

. . . . In Japan, the hash­tag #Chi­nese­Don’t­Come­To­Japan has been trend­ing on twit­ter. In Sin­ga­pore, tens of thou­sands of res­i­dents have signed a peti­tion call­ing for the gov­ern­ment to ban Chi­nese from enter­ing the coun­try.

In Hong Kong, South Korea and Viet­nam, busi­ness­es have post­ed signs say­ing that main­land Chi­nese cus­tomers are not wel­come. In France, a front-page head­line in a region­al news­pa­per warned of a “Yel­low Alert.” And in a sub­urb of Toron­to, par­ents demand­ed that a school dis­trict keep chil­dren of a fam­i­ly that had recent­ly returned from Chi­na out of class­es for 17 days. . . .

 . . . . At a time when Chi­na’s rise as a glob­al eco­nom­ic and mil­i­tary pow­er has unset­tled its neigh­bors in Asia as well as its rivals in the West, the coro­n­avirus is feed­ing into latent big­otry against the peo­ple of main­land Chi­na . . .

 

“Virus Puts a Frac­tured Hong Kong on Edge” by Austin Ramzy; The New York Times; 1/29/2020; p. A1 [West­ern Edi­tion.]

The two Hong Kong pro­test­ers were dressed head to toe in black, their faces coverd in masks. They smashed their Molo­tov cock­tails into the lob­by of a pub­lic hous­ing estate, and flames and smoke began  spew­ing out. . . .

 

“Virus Putting E.U. At Risk of Reces­sion” by Jack Ewing; The New York Times; 2/12/2020; p. B1 [West­ern Edi­tion.]

 

“Com­modi­ties Tum­ble as Epi­dem­ic Snarls Sup­ply Chains” by Matt Phillips; The New York Times; 2/12/2020; p. B3 [West­ern Edi­tion.]

 

Discussion

12 comments for “FTR #1111 and FTR #1112 Update on the Alleged “Suicide” of Iris Chang and the Destabilization of China and “BioWarfare-Psy-Op” Against China?”

  1. Here’s a cou­ple more exam­ples of J. Kyle Bass open­ly hop­ing and push­ing for chaos in Chi­na. Eco­nom­ic chaos but also viral chaos:

    First, here’s a Bloomberg arti­cle from a month ago about Bass’s fre­quent pre­dic­tions that Hong Kong will suf­fer a “full-fledged bank­ing cri­sis” in 2020, com­par­ing Hong Kong to Ice­land before the finan­cial cri­sis. The arti­cle char­ac­ter­izes him as warn­ing investors about Hong Kong every chance he gets. It’s worth not­ing that he’s been mak­ing these pre­dic­tions for months, includ­ing a pre­dic­tion back in June of 2019, when the protests were first break­ing out, that Hong Kong “sits atop one of the largest finan­cial time bombs in his­to­ry.” So this pre­dic­tion of finan­cial tur­moil for Hong Kong last month is just one in a long string of pre­dic­tions of this nature Bass has been mak­ing.

    As the fol­low­ing arti­cle notes, while Hong Kong’s econ­o­my is indeed suf­fer­ing from months of anti-gov­ern­ment mass protests, there’s still lit­tle sign of a loom­ing finan­cial cri­sis. Yes, it’s pos­si­ble there could be a full-blown bank­ing cri­sis in Hong Kong if the econ­o­my there con­tin­ues to weak­en and real estate prices drop sig­nif­i­cant­ly. Renewed protest vio­lence and its impact on the econ­o­my could also be a fac­tor. But Bass’s com­par­isons of Hong Kong’s bank­ing sys­tem to pre-cri­sis Ice­land does­n’t appear to be shared by the broad­er investor com­mu­ni­ty, which rais­es the obvi­ous ques­tion of whether or not he’s some­how ahead of the pack in terms of see­ing what’s com­ing or if he’s try­ing to active­ly move mar­kets. And giv­en that he appears to be issu­ing these Hong Kong warn­ings every chance he gets it sounds like he’s pri­mar­i­ly inter­est­ed in mov­ing mar­kets:

    Bloomberg News

    Kyle Bass’s Dooms­day Call on Hong Kong Isn’t Con­vinc­ing Mar­kets

    Pub­lished on Jan­u­ary 16 2020, 8:00 AM
    Last Updat­ed on Jan­u­ary 17 2020, 5:08 AM

    (Bloomberg) — Kyle Bass is con­vinced Hong Kong is head­ed for a finan­cial cri­sis, and he’s warn­ing investors every chance he gets. Few seem to be lis­ten­ing. The Dal­las-based hedge fund man­ag­er, who made a for­tune bet­ting against sub­prime mort­gages more than a decade ago, issued his lat­est dire Hong Kong fore­cast on Wednes­day, say­ing in a Bloomberg TV inter­view that the city would suf­fer a “full-fledged bank­ing cri­sis” in 2020. Cit­ing a “col­lapse” in the local econ­o­my and high lev­els of finan­cial lever­age, he com­pared Hong Kong to Ice­land and Ire­land before those nations’ bank­ing sys­tems implod­ed dur­ing the glob­al finan­cial cri­sis.

    While few doubt that Hong Kong’s econ­o­my is suf­fer­ing after sev­en months of anti-gov­ern­ment protests, the city’s mar­kets have shown lit­tle sign of an impend­ing bank­ing calami­ty. A gauge of the city’s finan­cial stocks is trad­ing near an all-time high after out­pac­ing gains in the broad­er mar­ket this year and post­ing an advance of near­ly 1% on Thurs­day. While inter­bank bor­row­ing rates have increased over the past 12 months, they remain far below lev­els that pre­ced­ed pre­vi­ous crises. The Hong Kong dol­lar, which Bass is bet­ting against, has recent­ly appre­ci­at­ed toward the strong end of its trad­ing band against the U.S. cur­ren­cy.

    Howard Lee, a deputy chief exec­u­tive at the Hong Kong Mon­e­tary Author­i­ty, wrote in a blog late last month that the city’s finan­cial mar­kets are sta­ble, sup­port­ed by a “well-test­ed” cur­ren­cy peg and “robust” bank­ing sec­tor. The de fac­to cen­tral bank has not seen any sig­nif­i­cant fund out­flows since the protests began, he said. Hong Kong dol­lar deposits were lit­tle changed at HK$6.9 tril­lion ($888 bil­lion) in Novem­ber from a month ear­li­er, accord­ing to offi­cial data.

    “Yes we are in a reces­sion, but liv­ing in Hong Kong you can see that prop­er­ty prices, the stock mar­ket, they’re still doing rel­a­tive­ly well,” said Ken­ny Wen, a strate­gist at Ever­bright Sun Hung Kai Co. in Hong Kong. “I real­ly don’t think we’ll see a bank­ing cri­sis in the near future.”

    Of course, Bass’s pre­dic­tions about sub­prime mort­gages in 2007 ulti­mate­ly proved pre­scient, even as many investors shrugged them off at the time. If Hong Kong’s econ­o­my con­tin­ues to weak­en and the city’s sky-high real estate prices tum­ble, banks could face a surge in soured loans. Anoth­er flare­up in protest vio­lence could eas­i­ly snuff out recent gains in the local stock mar­ket.

    For now though, many observers say Hong Kong’s bank­ing indus­try can weath­er the storm. Asset qual­i­ty issues at small- and medi­um-sized Hong Kong busi­ness­es, among the most impact­ed by the city’s eco­nom­ic down­turn, are unlike­ly to devel­op into a cri­sis, Cit­i­group Inc. ana­lysts said in a report this month.

    ...

    ———-

    “Kyle Bass’s Dooms­day Call on Hong Kong Isn’t Con­vinc­ing Mar­kets”; Bloomberg News; 01/16/2019

    “Kyle Bass is con­vinced Hong Kong is head­ed for a finan­cial cri­sis, and he’s warn­ing investors every chance he gets. Few seem to be lis­ten­ing. The Dal­las-based hedge fund man­ag­er, who made a for­tune bet­ting against sub­prime mort­gages more than a decade ago, issued his lat­est dire Hong Kong fore­cast on Wednes­day, say­ing in a Bloomberg TV inter­view that the city would suf­fer a “full-fledged bank­ing cri­sis” in 2020. Cit­ing a “col­lapse” in the local econ­o­my and high lev­els of finan­cial lever­age, he com­pared Hong Kong to Ice­land and Ire­land before those nations’ bank­ing sys­tems implod­ed dur­ing the glob­al finan­cial cri­sis.

    Hong Kong’s finan­cial sys­tem is look­ing like pre-cri­sis Ice­land. That’s quite a bold state­ment by Bass and some­thing he appar­ent­ly is telling peo­ple every chance he gets. And yet it does­n’t appear to actu­al­ly be true based on finan­cial mar­ket met­rics:

    ...
    While few doubt that Hong Kong’s econ­o­my is suf­fer­ing after sev­en months of anti-gov­ern­ment protests, the city’s mar­kets have shown lit­tle sign of an impend­ing bank­ing calami­ty. A gauge of the city’s finan­cial stocks is trad­ing near an all-time high after out­pac­ing gains in the broad­er mar­ket this year and post­ing an advance of near­ly 1% on Thurs­day. While inter­bank bor­row­ing rates have increased over the past 12 months, they remain far below lev­els that pre­ced­ed pre­vi­ous crises. The Hong Kong dol­lar, which Bass is bet­ting against, has recent­ly appre­ci­at­ed toward the strong end of its trad­ing band against the U.S. cur­ren­cy.

    ...

    Of course, Bass’s pre­dic­tions about sub­prime mort­gages in 2007 ulti­mate­ly proved pre­scient, even as many investors shrugged them off at the time. If Hong Kong’s econ­o­my con­tin­ues to weak­en and the city’s sky-high real estate prices tum­ble, banks could face a surge in soured loans. Anoth­er flare­up in protest vio­lence could eas­i­ly snuff out recent gains in the local stock mar­ket.

    For now though, many observers say Hong Kong’s bank­ing indus­try can weath­er the storm. Asset qual­i­ty issues at small- and medi­um-sized Hong Kong busi­ness­es, among the most impact­ed by the city’s eco­nom­ic down­turn, are unlike­ly to devel­op into a cri­sis, Cit­i­group Inc. ana­lysts said in a report this month.

    ...

    So it sounds like some sort of addi­tion­al shock to Hong Kong is going to be required for Bass’s pre­dic­tions pan out this year. Of course, there is indeed an addi­tion­al shock in the form of the coro­n­avirus epi­dem­ic that’s only been accel­er­at­ing over the last month. And as we’ve seen, that’s anoth­er top­ic Bass appears to be very inter­est­ed in pro­mot­ing, in par­tic­u­lar through his part­ner­ship with Steve Ban­non and exiled Chi­nese bil­lion­aire Guo Wen­gui in pro­mot­ing coro­n­avirus dis­in­for­ma­tion intend­ed to gen­er­ate pop­u­lar anger against the Chi­nese gov­ern­ment. And it’s in that con­text that we have this arti­cle from a few days about Bass call­ing for the US to pull its coro­n­avirus aid to Chi­na and just let­ting it rav­age the coun­try. The com­ments were made in response to a tweet by the edi­tor-in-chief of the Glob­al Times, a pub­li­ca­tion run by the Chi­nese Com­mu­nist Party’s People’s Dai­ly, com­plain­ing about “belat­ed” US aid. Bass respond­ed with a tweet of his own that, “We should take our sup­plies and go back home. Let the chi­nese virus ram­page through the ranks of the GT and the rest of the com­mu­nist par­ty”:

    Bloomberg

    Bass Says Virus Should Spread to Chi­na Lead­er­ship as Spat Widens

    By Han­nah Levitt
    Feb­ru­ary 9, 2020, 1:29 PM CST

    Kyle Bass took his long-time bat­tle with Chi­na up anoth­er notch by get­ting into a heat­ed spat with the influ­en­tial edi­tor-in-chief of a Com­mu­nist Par­ty-backed news­pa­per.

    The hedge fund man­ag­er sug­gest­ed on Twit­ter that the U.S. aban­don efforts to help con­tain the coro­n­avirus and let it spread through China’s lead­er­ship.

    “We should take our sup­plies and go back home. Let the chi­nese virus ram­page through the ranks of the GT and the rest of the com­mu­nist par­ty,” the founder and chief invest­ment offi­cer of Dal­las-based Hay­man Cap­i­tal Man­age­ment wrote.

    He was respond­ing to a tweet from Hu Xijin, edi­tor-in-chief of the Glob­al Times, a dai­ly run by the Chi­nese Com­mu­nist Party’s People’s Dai­ly, in which he com­plained about “belat­ed” U.S. aid.

    .@Jkylebass As an investor with 129K twit­ter fol­low­ers, you uttered such a mali­cious curse. You bring shame to investors com­mu­ni­ty and social media users.CPC mem­bers are ordi­nary cit­i­zens, fathers, hus­bands, wives, daugh­ters… Dr. Li Wen­liang is one of them. You should apol­o­gize. pic.twitter.com/SNO5c0235i— Hu Xijin ??? (@HuXijin_GT) Feb­ru­ary 9, 2020

    Bass lat­er delet­ed the tweet but dou­bled down when Hu sug­gest­ed he apol­o­gize.

    “I will not,” Bass replied. “You arrest­ed, cen­sured, and ‘pun­ished’ (only God knows what you did to him and the oth­er 7 doc­tors) the heroes of Wuhan. You are dis­grace to human­i­ty.”

    In an emailed state­ment to Bloomberg News address­ing his spat with Hu, he said he delet­ed the tweet because he “felt that it was too harsh for the rank and file” of the Glob­al Times, but that he will “nev­er apol­o­gize to a self-right­eous, attempt­ed manip­u­la­tor of pub­lic opin­ion,” refer­ring to Hu.

    Bass has long been a vocal crit­ic of China’s poli­cies — he fore­cast last month that Hong Kong will suf­fer a “full-fledged bank­ing cri­sis” this year and said it’s unlike­ly that Bei­jing will adhere to a trade deal with the U.S.

    ...

    ———–

    “Bass Says Virus Should Spread to Chi­na Lead­er­ship as Spat Widens” by Han­nah Levitt; Bloomberg; 02/09/2020

    ““We should take our sup­plies and go back home. Let the chi­nese virus ram­page through the ranks of the GT and the rest of the com­mu­nist par­ty,” the founder and chief invest­ment offi­cer of Dal­las-based Hay­man Cap­i­tal Man­age­ment wrote.”

    Bass sure seems to have a strange rela­tion­ship with the coro­n­avirus. He’s both spread­ing dis­in­for­ma­tion about the Chi­nese gov­ern­ment being behind the release of the virus and open­ly pin­ing for the the virus to rav­age the Chi­nese gov­ern­ment. And when asked by the edi­tor of the Glob­al Times to apol­o­gize over the tweet, he dou­bles down and declares that he’ll “nev­er apol­o­gize to a self-right­eous, attempt­ed manip­u­la­tor of pub­lic opin­ion.” It was kind of an iron­ic response for an investor who appears to be wag­ing an aggres­sive dis­in­for­ma­tion cam­paign for per­son­al prof­it:

    ...
    Bass lat­er delet­ed the tweet but dou­bled down when Hu sug­gest­ed he apol­o­gize.

    “I will not,” Bass replied. “You arrest­ed, cen­sured, and ‘pun­ished’ (only God knows what you did to him and the oth­er 7 doc­tors) the heroes of Wuhan. You are dis­grace to human­i­ty.”

    In an emailed state­ment to Bloomberg News address­ing his spat with Hu, he said he delet­ed the tweet because he “felt that it was too harsh for the rank and file” of the Glob­al Times, but that he will “nev­er apol­o­gize to a self-right­eous, attempt­ed manip­u­la­tor of pub­lic opin­ion,” refer­ring to Hu.
    ...

    But we still can’t rule out that Bass’s pre­dic­tions of eco­nom­ic dis­as­ter for Chi­na and Hong Kong will pan out this year. After all, while the coro­n­avirus has under­stand­ably sub­dued the actu­al Hong Kong protests some­what over fears of con­ta­gion, it sounds like the pub­lic anger against the Hong Kong gov­ern­ment is only grow­ing as a result of the virus’s impact on dai­ly life and the gov­ern­men­t’s response. So it’s pos­si­ble we’ll see the coro­n­avirus even­tu­al­ly sub­side, only to be fol­lowed by an even big­ger round of Hong Kong protests. Which is one of the sce­nar­ios Bass is bet­ting on hap­pen­ing this year and doing what they can to make hap­pen. It’s not the only sce­nario he would be hap­py with. A sce­nario that involves the coro­n­avirus not get­ting under con­trol and rav­aging Chi­na and Hong Kong instead is clear­ly a sce­nario he’s bet­ting on too.

    Posted by Pterrafractyl | February 13, 2020, 12:37 pm
  2. Look who is join­ing in on Steve Ban­non’s and Guo Wen­gui’s dis­in­for­ma­tion cam­paign about the Wuhan coro­n­avirus orig­i­nat­ing in a Chi­nese gov­ern­ment biowar­fare lab: Repub­li­can Sen­a­tor Tom Cot­ton, one of the biggest for­eign pol­i­cy hawks in the Sen­ate. Cot­ton is now going around open­ly sug­gest­ing that, yes, the coro­n­avirus real­ly may have orig­i­nat­ed in a Chi­nese biowar­fare lab. He admits there’s no evi­dence for this, but asserts that the Chi­nese gov­ern­men­t’s his­to­ry of decep­tion means we should sus­pect it may have come from a mil­i­tary biowar­fare lab because the Chi­nese gov­ern­ment isn’t hand­ing over evi­dence point towards a dif­fer­ent ori­gin for the virus. As Cot­ton puts it, “We don’t have evi­dence that this dis­ease orig­i­nat­ed there, but because of China’s duplic­i­ty and dis­hon­esty from the begin­ning, we need to at least ask the ques­tion to see what the evi­dence says, and Chi­na right now is not giv­ing evi­dence on that ques­tion at all.” So we need to ask what the evi­dence says, but Chi­na won’t pro­vide evi­dence so we should sus­pect that lack of evi­dence from the Chi­nese gov­ern­ment is because it’s cov­er­ing up evi­dence that the virus came from a biowar­fare lab. That’s lit­er­al­ly his rea­son­ing.

    As we’ll see in the sec­ond arti­cle below, Cot­ton has been at this for at least a cou­ple weeks. Ear­li­er this month he called the coro­n­avirus “worse than Cher­nobyl” and sug­gest­ed it came from a Chi­nese “super­lab­o­ra­to­ry”. A super lab. That sounds super scary. The “super­lab” he’s refer­ring to is the Wuhan Nation­al Biosafe­ty Lab­o­ra­to­ry of the Chi­nese Acad­e­my of Sci­ences, which is indeed a Biosafe­ty Lev­el 4 lab that does indeed study dan­ger­ous pathogens. That’s part of what’s fuel­ing this nar­ra­tive: there real­ly is an advanced gov­ern­ment lab that stud­ies pathogens in Wuhan.

    As the fol­low­ing arti­cle notes, there’s a grow­ing num­ber of right-wing voic­es jump­ing on board the Bannon/Guo coro­n­avirus nar­ra­tive. Arti­cles Fox News and the Dai­ly Mail (both owned by the Mur­doch fam­i­ly) and the Wash­ing­ton Times (owned by the Uni­fi­ca­tion Church). Oh, and it turns out Steve Ban­non has cre­at­ed an entire­ly new pod­cast ded­i­cat­ed to the coro­n­avirus. It’s the “War Room: Pan­dem­ic” pod­cast, a spin­off from his “War Room: Impeach­ment” pod­cast.

    So it’s look­ing like Steve Ban­non’s pet project is becom­ing one of those offi­cial right-wing con­spir­a­cy the­o­ries that the whole right-wing media com­plex is going to be pump­ing out regard­less of the lack of evi­dence. After all, the lack of evi­dence is the what should make us sus­pi­cious, accord­ing to Sen­a­tor Cot­ton:

    The New York Times

    Sen­a­tor Tom Cot­ton Repeats Fringe The­o­ry of Coro­n­avirus Ori­gins

    Sci­en­tists have dis­missed sug­ges­tions that the Chi­nese gov­ern­ment was behind the out­break, but it’s the kind of tale that gains trac­tion among those who see Chi­na as a threat.

    By Alexan­dra Steven­son

    Feb. 17, 2020
    Updat­ed 7:29 a.m. ET

    The rumor appeared short­ly after the new coro­n­avirus struck Chi­na and spread almost as quick­ly: that the out­break now afflict­ing peo­ple around the world had been man­u­fac­tured by the Chi­nese gov­ern­ment.

    The con­spir­a­cy the­o­ry lacks evi­dence and has been dis­missed by sci­en­tists. But it has gained an audi­ence with the help of well-con­nect­ed crit­ics of the Chi­nese gov­ern­ment such as Stephen K. Ban­non, Pres­i­dent Trump’s for­mer chief strate­gist. And on Sun­day, it got its biggest pub­lic boost yet.

    Speak­ing on Fox News, Sen­a­tor Tom Cot­ton, Repub­li­can of Arkansas, raised the pos­si­bil­i­ty that the virus had orig­i­nat­ed in a high-secu­ri­ty bio­chem­i­cal lab in Wuhan, the Chi­nese city at the cen­ter of the out­break.

    “We don’t have evi­dence that this dis­ease orig­i­nat­ed there,” the sen­a­tor said, “but because of China’s duplic­i­ty and dis­hon­esty from the begin­ning, we need to at least ask the ques­tion to see what the evi­dence says, and Chi­na right now is not giv­ing evi­dence on that ques­tion at all.”

    Mr. Cot­ton lat­er walked back the idea that the coro­n­avirus was a Chi­nese bioweapon run amok. But it is the sort of tale that res­onates with an expand­ing cho­rus of voic­es in Wash­ing­ton who see Chi­na as a grow­ing Sovi­et-lev­el threat to the Unit­ed States, echo­ing the anti-Com­mu­nist think­ing of the Cold War era.

    Right-wing media out­lets fan the anger. Bei­jing, with its heavy-hand­ed cen­sor­ship and stran­gle­hold on infor­ma­tion, unwit­ting­ly gives the con­spir­a­cy the­o­ries a boost.

    The idea of the coro­n­avirus as an escaped weapon has been car­ried through inter­na­tion­al news out­lets like the British tabloid The Dai­ly Mail and The Wash­ing­ton Times, which sug­gest­ed that the virus was being devel­oped as part of China’s biowar­fare pro­gram.

    Last month, Mr. Ban­non invit­ed Bill Gertz, a Wash­ing­ton Times reporter, to be a guest on the inau­gur­al episode of his radio show “War Room: Pan­dem­ic,” a spin­off of his “War Room: Impeach­ment,” which defend­ed Mr. Trump dur­ing the Sen­ate impeach­ment tri­al.

    “Bill Gertz had an amaz­ing piece in The Wash­ing­ton Times about the bio­log­i­cal labs that hap­pen to be in Wuhan,” Mr. Ban­non said on his Jan. 25 show. Mr. Gertz appeared on anoth­er show sev­er­al days lat­er to con­tin­ue putting for­ward the bioweapons the­o­ry.

    Fox News has also dab­bled in the the­o­ry, in one arti­cle draw­ing a con­nec­tion between a 1980s thriller by Dean Koontz that “pre­dict­ed coro­n­avirus.” The book is about a Chi­nese mil­i­tary lab that cre­ates a bio­log­i­cal weapon.

    ...

    Although much remains unknown about the coro­n­avirus, experts gen­er­al­ly dis­miss the idea that it was cre­at­ed by human hands. Sci­en­tists who have stud­ied the coro­n­avirus say it resem­bles SARS and oth­er virus­es that come from bats. While con­ta­gious, so far it appears to large­ly threat­en the lives of old­er peo­ple with chron­ic health issues, mak­ing it a less-than-effec­tive bioweapon.

    A pletho­ra of mis­in­for­ma­tion has led World Health Orga­ni­za­tion work­ers to call it an “info­dem­ic.”

    Spread­ing that infor­ma­tion are some well-known crit­ics of the Chi­nese gov­ern­ment like Mr. Ban­non and Guo Wen­gui, a Chi­nese fugi­tive bil­lion­aire. The two have pledged to raise a $100 mil­lion fund to inves­ti­gate cor­rup­tion, help peo­ple they believe to be vic­tims of Chi­nese gov­ern­ment per­se­cu­tion and, in Mr. Guo’s words, take down China’s Com­mu­nist Par­ty.

    Hours after Mr. Cot­ton made his com­ments on Fox News, Mr. Guo took to his own media plat­form, G News, to boast in a 30-minute video that he had pre­dict­ed that Chi­na would man­u­fac­ture a cri­sis like the virus out­break.

    “I said a year ago that Chi­nese Com­mu­nist Par­ty might cre­ate a mas­sive human­i­tar­i­an cri­sis or a nat­ur­al dis­as­ter or a pan­dem­ic before it dies,” Mr. Guo said from his $68 mil­lion apart­ment on the edge of Cen­tral Park in New York.

    “On a wall at the entrance to Wuhan P4 lab, there is a slo­gan: When you step into this build­ing, you enter into Pandora’s box,” Mr. Guo added, refer­ring to the high-secu­ri­ty lab.

    He claimed that the lab has mil­i­tary con­nec­tions, includ­ing that sol­diers from the People’s Lib­er­a­tion Army serve as guards. He did not offer proof.

    Mr. Guo is no stranger to con­spir­a­cy the­o­ries. The web­site for G News — which car­ries the slo­gan “Truth, Free­dom” — is pop­u­lat­ed with head­lines like “Break­ing news: Chi­na will admit coro­n­avirus com­ing from its P4 lab” and “Dead: founder of Canada’s P4 Lab, key to Wuhan coro­n­avirus inves­ti­ga­tion.”

    He has also advanced oth­er claims with­out evi­dence. In 2018, he claimed that HNA, a Chi­nese con­glom­er­ate, had played a role in the death of its co-chair­man, Wang Jian, in an acci­dent in France. The French author­i­ties ruled Mr. Wang’s death an acci­dent. The com­pa­ny declined to com­ment at the time on Mr. Guo’s claims.

    Mr. Guo waged his war against the Chi­nese gov­ern­ment from Face­book and Twit­ter for months, but then both social media plat­forms sus­pend­ed his accounts after he post­ed the per­son­al infor­ma­tion of Chi­nese peo­ple online.

    Mr. Guo has had more suc­cess as views about Chi­na in Wash­ing­ton have grown more sin­is­ter. Mr. Cot­ton on Sun­day helped make them part of the Amer­i­can polit­i­cal estab­lish­ment.

    Speak­ing to the Fox News anchor Maria Bar­tiro­mo, Mr. Cot­ton sug­gest­ed that a dearth of infor­ma­tion about the coronavirus’s ori­gins was rais­ing more ques­tions than answers.

    “We don’t know where it orig­i­nat­ed, and we have to get to the bot­tom of that,” he said on the pro­gram “Sun­day Morn­ing Futures.”

    After receiv­ing crit­i­cism for lend­ing cre­dence to what has been large­ly con­sid­ered a fringe the­o­ry, the sen­a­tor took to Twit­ter to say that he did not nec­es­sar­i­ly think the virus was an “engi­neered bioweapon.”

    That idea, he said, was just one of sev­er­al hypothe­ses that includ­ed the pos­si­bil­i­ty that the out­break was a “delib­er­ate release.”

    He also said it was pos­si­ble that the virus had spread nat­u­ral­ly, “but almost cer­tain­ly not from the Wuhan food mar­ket.”

    ————-

    “Sen­a­tor Tom Cot­ton Repeats Fringe The­o­ry of Coro­n­avirus Ori­gins” by Alexan­dra Steven­son; The New York Times; 02/17/2020

    “A pletho­ra of mis­in­for­ma­tion has led World Health Orga­ni­za­tion work­ers to call it an “info­dem­ic.”

    An “info­dem­ic”. That’s how the World Health Orga­ni­za­tion is char­ac­ter­iz­ing the mis­in­for­ma­tion around the Wuhan virus. And of course Steve Ban­non and the right-wing media was lead­ing the way on that “info­dem­ic”. It was on Fox News on Sun­day that Sen­a­tor Cot­ton gave a big boost the Ban­non’s mis­in­for­ma­tion when he sug­gest­ed that the lack of evi­dence that the dis­ease orig­i­nat­ed at the Wuhan mar­ket should make us sus­pect it actu­al­ly orig­i­nat­ed at a Chi­nese biowar­fare lab:

    ...
    Speak­ing on Fox News, Sen­a­tor Tom Cot­ton, Repub­li­can of Arkansas, raised the pos­si­bil­i­ty that the virus had orig­i­nat­ed in a high-secu­ri­ty bio­chem­i­cal lab in Wuhan, the Chi­nese city at the cen­ter of the out­break.

    “We don’t have evi­dence that this dis­ease orig­i­nat­ed there,” the sen­a­tor said, “but because of China’s duplic­i­ty and dis­hon­esty from the begin­ning, we need to at least ask the ques­tion to see what the evi­dence says, and Chi­na right now is not giv­ing evi­dence on that ques­tion at all.”

    Mr. Cot­ton lat­er walked back the idea that the coro­n­avirus was a Chi­nese bioweapon run amok. But it is the sort of tale that res­onates with an expand­ing cho­rus of voic­es in Wash­ing­ton who see Chi­na as a grow­ing Sovi­et-lev­el threat to the Unit­ed States, echo­ing the anti-Com­mu­nist think­ing of the Cold War era.
    ...

    And Fox News isn’t the only Mur­doch-owned out­let being used to pro­mote this meme. The Dai­ly Mail has already run sto­ries pro­mot­ing this idea, as well as the Uni­fi­ca­tion Church-owned Wash­ing­ton Times:

    ...
    Right-wing media out­lets fan the anger. Bei­jing, with its heavy-hand­ed cen­sor­ship and stran­gle­hold on infor­ma­tion, unwit­ting­ly gives the con­spir­a­cy the­o­ries a boost.

    The idea of the coro­n­avirus as an escaped weapon has been car­ried through inter­na­tion­al news out­lets like the British tabloid The Dai­ly Mail and The Wash­ing­ton Times, which sug­gest­ed that the virus was being devel­oped as part of China’s biowar­fare pro­gram.

    ...

    Fox News has also dab­bled in the the­o­ry, in one arti­cle draw­ing a con­nec­tion between a 1980s thriller by Dean Koontz that “pre­dict­ed coro­n­avirus.” The book is about a Chi­nese mil­i­tary lab that cre­ates a bio­log­i­cal weapon.
    ...

    And then there’s Steve Ban­non’s whole new pod­cast ded­i­cat­ed to the coro­n­avirus: “War Room: Pan­dem­ic”. That’s how ded­i­cat­ed Ban­non is to this project. He’s got a whole pod­cast about it:

    ...
    Last month, Mr. Ban­non invit­ed Bill Gertz, a Wash­ing­ton Times reporter, to be a guest on the inau­gur­al episode of his radio show “War Room: Pan­dem­ic,” a spin­off of his “War Room: Impeach­ment,” which defend­ed Mr. Trump dur­ing the Sen­ate impeach­ment tri­al.

    “Bill Gertz had an amaz­ing piece in The Wash­ing­ton Times about the bio­log­i­cal labs that hap­pen to be in Wuhan,” Mr. Ban­non said on his Jan. 25 show. Mr. Gertz appeared on anoth­er show sev­er­al days lat­er to con­tin­ue putting for­ward the bioweapons the­o­ry.
    ...

    And note how, fol­low­ing Cot­ton’s com­ments on Fox News, Guo Wen­gui goes onto his G News plat­form to brag about how he pre­dict­ed a year ago that the Chi­nese gov­ern­ment was going to cre­ate a pan­dem­ic “before it dies”. So Guo has been pro­mot­ing this meme before the pan­dem­ic even start­ed. On the one hand, pre­dic­tions of that nature are pret­ty stan­dard for the Info Wars-style media envi­ron­ment Guo occu­pies. But on the oth­er hand, if we were to learn that this virus real­ly was inten­tion­al­ly released at this point it seems like the staunch oppo­nent of the Chi­nese gov­ern­ment who has been active­ly stok­ing and try­ing to prof­it off of this pan­dem­ic should prob­a­bly be one of the prime sus­pects, espe­cial­ly if he’s been pre­dict­ing this before it hap­pened:

    ...
    Hours after Mr. Cot­ton made his com­ments on Fox News, Mr. Guo took to his own media plat­form, G News, to boast in a 30-minute video that he had pre­dict­ed that Chi­na would man­u­fac­ture a cri­sis like the virus out­break.

    “I said a year ago that Chi­nese Com­mu­nist Par­ty might cre­ate a mas­sive human­i­tar­i­an cri­sis or a nat­ur­al dis­as­ter or a pan­dem­ic before it dies,” Mr. Guo said from his $68 mil­lion apart­ment on the edge of Cen­tral Park in New York.

    “On a wall at the entrance to Wuhan P4 lab, there is a slo­gan: When you step into this build­ing, you enter into Pandora’s box,” Mr. Guo added, refer­ring to the high-secu­ri­ty lab.

    He claimed that the lab has mil­i­tary con­nec­tions, includ­ing that sol­diers from the People’s Lib­er­a­tion Army serve as guards. He did not offer proof.

    Mr. Guo is no stranger to con­spir­a­cy the­o­ries. The web­site for G News — which car­ries the slo­gan “Truth, Free­dom” — is pop­u­lat­ed with head­lines like “Break­ing news: Chi­na will admit coro­n­avirus com­ing from its P4 lab” and “Dead: founder of Canada’s P4 Lab, key to Wuhan coro­n­avirus inves­ti­ga­tion.”

    He has also advanced oth­er claims with­out evi­dence. In 2018, he claimed that HNA, a Chi­nese con­glom­er­ate, had played a role in the death of its co-chair­man, Wang Jian, in an acci­dent in France. The French author­i­ties ruled Mr. Wang’s death an acci­dent. The com­pa­ny declined to com­ment at the time on Mr. Guo’s claims.

    Mr. Guo waged his war against the Chi­nese gov­ern­ment from Face­book and Twit­ter for months, but then both social media plat­forms sus­pend­ed his accounts after he post­ed the per­son­al infor­ma­tion of Chi­nese peo­ple online.

    Mr. Guo has had more suc­cess as views about Chi­na in Wash­ing­ton have grown more sin­is­ter. Mr. Cot­ton on Sun­day helped make them part of the Amer­i­can polit­i­cal estab­lish­ment.
    ...

    Now here’s a Busi­ness Insid­er arti­cle from a cou­ple of weeks ago about Sen­a­tor Cot­ton claim­ing the Wuhan virus is “worse than Cher­nobyl” and may have come from a Chi­nese “super­lab­o­ra­to­ry”. Yep, a super lab. He’s refer­ing to the Wuhan Nation­al Biosafe­ty Lab­o­ra­to­ry of the Chi­nese Acad­e­my of Sci­ences, which is a Biosafe­ty Lev­el 4 lab that inves­ti­gates “the most dan­ger­ous pathogens.” The evi­dence Cot­ton cites of his con­vic­tion that the virus def­i­nite­ly did­n’t come from the Wuhan mar­ket is that 14 of the 40 orig­i­nal cas­es of the Wuhan virus had no con­tact with the mar­ket, includ­ing patient zero, accord­ing to Cot­ton. Cot­ton was refer­ring to an arti­cle pub­lished in The Lancet that stat­ed that the first known case of some­one with the virus did­n’t have direct con­tact with the Wuhan mar­ket. So based on that data points — patient zero not hav­ing con­tact with the Wuhan mar­ket jux­ta­posed to the Chi­nese gov­ern­ment con­clu­sion that it arose from the mar­ket — Cot­ton was already strong­ly hint­ing that came from the Wuhan “super­lab”:

    Busi­ness Insid­er US

    Repub­li­can sen­a­tor sug­gests ‘worse than Cher­nobyl’ coro­n­avirus could’ve come from Chi­nese ‘super­lab­o­ra­to­ry’

    David Choi,
    Feb­ru­ary 3, 2020

    * Repub­li­can Sen. Tom Cot­ton sug­gest­ed that Chi­nese offi­cials mis­led the pub­lic on the ori­gins of the nov­el coro­n­avirus from Wuhan, Chi­na, say­ing it may have orig­i­nat­ed in a “super­lab­o­ra­to­ry.”
    * At a Sen­ate hear­ing with US mil­i­tary lead­ers on Thurs­day, Cot­ton said the coro­n­avirus was “worse than Cher­nobyl.”
    * Cot­ton qual­i­fied his remarks by say­ing “we still don’t know where” the virus orig­i­nat­ed, but his com­ments come amid numer­ous con­spir­a­cy the­o­ries on its ori­gins – includ­ing one alleg­ing the virus “orig­i­nat­ed in lab linked to China’s biowar­fare pro­gram.”

    Repub­li­can Sen. Tom Cot­ton sug­gest­ed that Chi­nese offi­cials mis­led the pub­lic on the ori­gins of the nov­el coro­n­avirus that has killed at least 362 peo­ple and infect­ed more than 17,400 oth­ers, say­ing it may have orig­i­nat­ed in a “super­lab­o­ra­to­ry.”

    At a Sen­ate Armed Ser­vice Com­mit­tee hear­ing with US mil­i­tary lead­ers on Thurs­day, Cot­ton described the coro­n­avirus as the “biggest and most impor­tant sto­ry in the world” and “worse than Cher­nobyl.”

    Cot­ton, a long­time Chi­na hawk, sug­gest­ed Bei­jing had not been as forth­com­ing about the num­ber of infec­tions and was “lying about it from the very begin­ning” to down­play the seri­ous­ness of the epi­dem­ic. Chi­nese offi­cials have been accused of low­er­ing the num­ber of cas­es and tamp­ing down on reports weeks before it was for­mal­ly acknowl­edged by the gov­ern­ment.

    “They also claimed, for almost two months until ear­li­er this week, that it orig­i­nat­ed in a seafood mar­ket in Wuhan,” Cot­ton said, refer­ring to a study pub­lished by The Lancet. “That is not the case.”

    Ini­tial stud­ies linked the virus to var­i­ous sources, includ­ing a seafood mar­ket in Wuhan, Chi­na, and bats. In one of the stud­ies from the Wuhan Insti­tute of Virol­o­gy, six of the sev­en virus sam­ples were from patients who worked at the Hua­nan whole­sale seafood mar­ket.

    “Of the orig­i­nal 40 cas­es, 14 of them had no con­tact with the seafood mar­ket, includ­ing patient zero,” Cot­ton said. “I would note that Wuhan also has China’s only bio-safe­ty lev­el four ‘super­lab­o­ra­to­ry’ that works with the world’s most dead­ly pathogens to include, yes, coro­n­avirus.”

    Cot­ton was refer­ring to China’s first Biosafe­ty Lev­el 4 lab, the Wuhan Nation­al Biosafe­ty Lab­o­ra­to­ry of the Chi­nese Acad­e­my of Sci­ences, which inves­ti­gates “the most dan­ger­ous pathogens,” accord­ing to the US Cen­ters for Dis­ease Con­trol and Pre­ven­tion.

    While Cot­ton qual­i­fied his remarks by say­ing “we still don’t know where” the virus orig­i­nat­ed, his com­ments come amid numer­ous con­spir­a­cy the­o­ries about the virus’s ori­gins – includ­ing one that says the virus “orig­i­nat­ed in lab linked to China’s biowar­fare pro­gram.”

    The amount of false infor­ma­tion spread­ing across social-media plat­forms has prompt­ed sev­er­al com­pa­nies, includ­ing Face­book, to lim­it the reach of such posts. In a state­ment, Face­book said it would dis­play “accu­rate infor­ma­tion” and noti­fy users if they are sus­pect­ed of shar­ing false or mis­lead­ing infor­ma­tion.

    Chi­na accused the US of “fear and over­re­ac­tion” after Pres­i­dent Don­ald Trump imposed a tem­po­rary trav­el ban on peo­ple who had vis­it­ed Chi­na with­in the past 14 days.

    ...

    ———–

    “Repub­li­can sen­a­tor sug­gests ‘worse than Cher­nobyl’ coro­n­avirus could’ve come from Chi­nese ‘super­lab­o­ra­to­ry’” by David Choi; Busi­ness Insid­er US; 02/03/2020

    “At a Sen­ate Armed Ser­vice Com­mit­tee hear­ing with US mil­i­tary lead­ers on Thurs­day, Cot­ton described the coro­n­avirus as the “biggest and most impor­tant sto­ry in the world” and “worse than Cher­nobyl.”

    Worse than Cher­nobyl and the most impor­tant sto­ry in the world. That’s how Sen­a­tor Cot­ton was describ­ing the sit­u­a­tion. And he based much of that descrip­tion on an arti­cle in The Lancet that stat­ed that the very first case in ear­ly Decem­ber 2019 had no direct con­tact with the Wuhan Mar­ket

    ...
    “They also claimed, for almost two months until ear­li­er this week, that it orig­i­nat­ed in a seafood mar­ket in Wuhan,” Cot­ton said, refer­ring to a study pub­lished by The Lancet. “That is not the case.”

    Ini­tial stud­ies linked the virus to var­i­ous sources, includ­ing a seafood mar­ket in Wuhan, Chi­na, and bats. In one of the stud­ies from the Wuhan Insti­tute of Virol­o­gy, six of the sev­en virus sam­ples were from patients who worked at the Hua­nan whole­sale seafood mar­ket.

    “Of the orig­i­nal 40 cas­es, 14 of them had no con­tact with the seafood mar­ket, includ­ing patient zero,” Cot­ton said. “I would note that Wuhan also has China’s only bio-safe­ty lev­el four ‘super­lab­o­ra­to­ry’ that works with the world’s most dead­ly pathogens to include, yes, coro­n­avirus.”

    Cot­ton was refer­ring to China’s first Biosafe­ty Lev­el 4 lab, the Wuhan Nation­al Biosafe­ty Lab­o­ra­to­ry of the Chi­nese Acad­e­my of Sci­ences, which inves­ti­gates “the most dan­ger­ous pathogens,” accord­ing to the US Cen­ters for Dis­ease Con­trol and Pre­ven­tion.

    While Cot­ton qual­i­fied his remarks by say­ing “we still don’t know where” the virus orig­i­nat­ed, his com­ments come amid numer­ous con­spir­a­cy the­o­ries about the virus’s ori­gins – includ­ing one that says the virus “orig­i­nat­ed in lab linked to China’s biowar­fare pro­gram.”
    ...

    It’s impor­tant to keep in mind that the first found case is not the same thing as the first per­son to con­tract the virus. We have no idea who the real “patient zero” is in terms of the first per­son to con­tact the virus. It’s entire­ly pos­si­ble this first patient con­tract­ed the virus from anoth­er per­son who did pick it up from the mar­ket.

    At the same time, it’s true that the virus could have emerged from that Wuhan lab. But once we enter the realm of spec­u­lat­ing about inten­tion­al releas­es of the virus there’s no rea­son to assume it came from that par­tic­u­lar lab. After all, if a group of peo­ple want­ed to desta­bi­lize Chi­na with a nov­el virus, it could be released any­where and select­ing a city with a “super­lab” would be a log­i­cal place to do it. Note that here’s what The Lancet arti­cle actu­al­ly said about those first patients:

    The Lancet

    Clin­i­cal fea­tures of patients infect­ed with 2019 nov­el coro­n­avirus in Wuhan, Chi­na

    Chaolin Huang, et al.
    Vol­ume 395, Issue 10223, 15–21 Feb­ru­ary 2020, Pages 497–506

    ...

    Results

    By Jan 2, 2020, 41 admit­ted hos­pi­tal patients were iden­ti­fied as lab­o­ra­to­ry-con­firmed 2019-nCoV infec­tion in Wuhan. 20 [49%]) of the 2019-nCoV-infect­ed patients were aged 25–49 years, and 14 (34%) were aged 50–64 years (fig­ure 1A). The medi­an age of the patients was 49·0 years (IQR 41·0–58·0; table 1). In our cohort of the first 41 patients as of Jan 2, no chil­dren or ado­les­cents were infect­ed. Of the 41 patients, 13 (32%) were admit­ted to the ICU because they required high-flow nasal can­nu­la or high­er-lev­el oxy­gen sup­port mea­sures to cor­rect hypox­aemia. Most of the infect­ed patients were men (30 [73%]); less than half had under­ly­ing dis­eases (13 [32%]), includ­ing dia­betes (eight [20%]), hyper­ten­sion (six [15%]), and car­dio­vas­cu­lar dis­ease (six [15%]).

    27 (66%) patients had direct expo­sure to Hua­nan seafood mar­ket (fig­ure 1B). Mar­ket expo­sure was sim­i­lar between the patients with ICU care (nine [69%]) and those with non-ICU care (18 [64%]). The symp­tom onset date of the first patient iden­ti­fied was Dec 1, 2019. None of his fam­i­ly mem­bers devel­oped fever or any res­pi­ra­to­ry symp­toms. No epi­demi­o­log­i­cal link was found between the first patient and lat­er cas­es. The first fatal case, who had con­tin­u­ous expo­sure to the mar­ket, was admit­ted to hos­pi­tal because of a 7‑day his­to­ry of fever, cough, and dys­p­noea. 5 days after ill­ness onset, his wife, a 53-year-old woman who had no known his­to­ry of expo­sure to the mar­ket, also pre­sent­ed with pneu­mo­nia and was hos­pi­talised in the iso­la­tion ward.
    ...

    ———-

    “Clin­i­cal fea­tures of patients infect­ed with 2019 nov­el coro­n­avirus in Wuhan, Chi­na” by Chaolin Huang, et al.; The Lancet; Vol­ume 395, Issue 10223, 15–21 Feb­ru­ary 2020, Pages 497–506

    No epi­demi­o­log­i­cal link was found between the first patient and lat­er cas­es. So yes, there’s a mys­tery as to how the first patient con­tract­ed the virus. But it does­n’t appear that the first known patient had a clear link to the oth­er ear­ly patients. In oth­er words, the first known patient prob­a­bly was­n’t the first per­son to actu­al­ly con­tract the dis­ease. Some­one else was spread­ing it around. Did that mys­te­ri­ous per­son catch it from the Wuhan Mar­ket? We have no idea. We just know that a clus­ter of the ear­li­est patients were found to have direct con­tact with that mar­ket and mar­ket where wildlife is sold is a log­i­cal ori­gin for a virus to jump to humans.

    It all rais­es the ques­tion of what is actu­al­ly con­clu­sive­ly known about the ori­gins and nature of the Wuhan coro­n­avirus. And that brings us to the fol­low­ing LA Times arti­cle describes what it know about the virus’s lethal­i­ty. At this point, based on the num­ber of known cas­es, the virus appears to have a death rate of around 2%, which is far less than the apoc­a­lyp­tic death rates seen for SARS or MERS, but still far more than the death rate of the nor­mal flu that’s less than 0.1%. So a 2% per­cent death rate is a very big deal. But as the arti­cle notes, while much is not known about this virus, one thing we can say with very high con­fi­dence is that the death rate is actu­al­ly much low­er than 2%. Why? Because we can be con­fi­dent that all of the non-lethal cas­es aren’t being record­ed. If some­one catch­es the Wuhan flu and does­n’t report or does­n’t even real­ize they have it, per­haps because they’re asymp­to­matic, those cas­es aren’t going to get fac­tored into the death rate cal­cu­la­tions. If some­one dies from, on the oth­er hand, they are high­ly like­ly to be includ­ed in the count­ed cas­es. So there’s an asym­me­try with our abil­i­ty to count the num­ber of cas­es in that more severe cas­es are far more like­ly to be count­ed than the less severe cas­es. So while one of the charges Sen­a­tor Cot­ton makes against the Chi­nese gov­ern­ment is that it’s been hid­ing or under­es­ti­mat­ing the num­ber of cas­es is prob­a­bly a valid charge, it’s the kind of charge that only makes it more like this virus is much less dead­ly than alarmists like Cot­ton would pre­fer us to believe:

    The Los Ange­les Times

    How dead­ly is the new coro­n­avirus? Sci­en­tists race to find the answer

    By EMILY BAUMGAERTNER
    STAFF WRITER
    FEB. 12, 2020 11:49 AM

    Of all the ques­tions sci­en­tists hope to answer about the new coro­n­avirus sweep­ing across the globe, the most press­ing is this: How dead­ly is it?

    The only way to know is to fig­ure out how many peo­ple have been infect­ed — and that’s the real chal­lenge.

    More than 60,000 infec­tions have been con­firmed, but experts are cer­tain there are at least tens of thou­sands more. Some cas­es haven’t been count­ed because patients didn’t have bio­log­i­cal sam­ples sent to a lab. Some nev­er saw a doc­tor, and oth­ers had such mild symp­toms that they didn’t even know they were sick.

    With­out a true pic­ture of the total num­ber of cas­es, it’s impos­si­ble to cal­cu­late a fatal­i­ty rate. That’s why scores of epi­demi­ol­o­gists and math­e­mati­cians are work­ing to solve one of the most com­plex mod­el­ing prob­lems of their time.

    Sit­u­a­tion reports from the World Health Orga­ni­za­tion pro­vide an upper bound­ary of the mor­tal­i­ty rate. As of Wednes­day, there were more than 60,150 lab­o­ra­to­ry-con­firmed infec­tions around the world, result­ing in at least 1,365 deaths. A bit of sim­ple arith­metic indi­cates that slight­ly more than 2% of those infec­tions were fatal.

    But because the cur­rent infec­tion count is too low, that death rate — known for­mal­ly as a “case fatal­i­ty rate” or “case fatal­i­ty ratio” — is too high.

    “That’s one thing we can pret­ty much say with cer­tain­ty,” said Josh Michaud, who was an infec­tious dis­ease epi­demi­ol­o­gist with the Defense Depart­ment dur­ing the H1N1 influen­za pan­dem­ic in 2009.

    Dr. Nan­cy Mes­son­nier, direc­tor of the Nation­al Cen­ter for Immu­niza­tion and Res­pi­ra­to­ry Dis­eases at the Cen­ters for Dis­ease Con­trol and Pre­ven­tion, said the 2% fatal­i­ty rate “has been rel­a­tive­ly sta­ble” so far in the out­break. “But whether that actu­al­ly is a real case fatal­i­ty ratio or not, I just don’t think that we have the infor­ma­tion right now to say.”

    When an out­break involves a nev­er-before-seen virus, there are no short­cuts epi­demi­ol­o­gists can take to deter­mine how many peo­ple have got­ten sick and how many have died. They’ll need to dig into a vari­ety of sources to see how many coro­n­avirus deaths were mis­tak­en­ly blamed on oth­er caus­es, and vice ver­sa. They’ll also need to fig­ure out how many infect­ed peo­ple nev­er inter­act­ed with the med­ical sys­tem.

    Researchers at Impe­r­i­al Col­lege Lon­don have mod­eled the infection’s spread based on the num­ber of con­firmed cas­es and the flow of trav­el­ers in and out of Wuhan, Chi­na, before quar­an­tines took effect. The team assumed that the virus had a five- to six-day incu­ba­tion peri­od before symp­toms appeared and that infect­ed trav­el­ers were detect­ed when they reached their des­ti­na­tions.

    The result was a case count between 1,000 and 9,700 as of Jan. 18, a date when the offi­cial tal­ly of infec­tions was below 300. Uncer­tain­ties in the mod­el result­ed in a wide error range, but the true num­ber of infect­ed peo­ple was prob­a­bly around 4,000, the team report­ed.

    The WHO is cre­at­ing its own research con­sor­tium to inves­ti­gate the orig­i­nal source of the new strain of coro­n­avirus and how read­i­ly it spreads. By hon­ing in on those para­me­ters, the WHO can make its mod­els more accu­rate.

    “The more time you have, the more evi­dence you have to work with, the bet­ter your esti­mate will be,” said Dr. Car­los del Rio, a glob­al health epi­demi­ol­o­gist at Emory Uni­ver­si­ty.

    A good out­break mod­el is a lot like an ice­berg, said Marc Lip­sitch, an infec­tious dis­ease epi­demi­ol­o­gist at Harvard’s T.H. Chan School of Pub­lic Health.

    The iceberg’s tip — the part you see — is the patients who die. This is the eas­i­est num­ber to assess for the sim­ple rea­son that deaths are hard to miss.

    All the oth­er infect­ed peo­ple are the part of the ice­berg that’s under­wa­ter. Epi­demi­ol­o­gists divide them into tiers.

    Just below the sur­face are the patients who get sick enough to be hos­pi­tal­ized. Below them are patients who seek basic med­ical atten­tion. The next tier is made up of peo­ple who nurse their ill­ness­es at home, and the last is the peo­ple who have no symp­toms.

    In 2009, when Lip­sitch was help­ing the CDC deter­mine the sever­i­ty of the H1N1 flu, he and his fel­low researchers rec­og­nized that no sin­gle data source could cap­ture all five tiers. So they gath­ered sur­veil­lance data from var­i­ous parts of the U.S. health sys­tem and pieced them togeth­er to gen­er­ate their ice­berg mod­el.

    One key con­trib­u­tor was the New York City Depart­ment of Health and Men­tal Hygiene. Offi­cials there didn’t try to count every sin­gle per­son who became infect­ed. Instead, they focused on care­ful­ly doc­u­ment­ing every patient who was hos­pi­tal­ized. Thanks to that pre­ci­sion, researchers could deter­mine the rela­tion­ship between hos­pi­tal­iza­tions and deaths.

    Mean­while, in the much small­er city of Mil­wau­kee, there weren’t enough deaths to make cal­cu­la­tions that were sta­tis­ti­cal­ly sig­nif­i­cant. Instead, offi­cials decid­ed to count every sin­gle H1N1 patient who sought some kind of med­ical atten­tion. Their records allowed researchers to gauge the rela­tion­ship between vis­it­ing a pri­ma­ry care doc­tor and being admit­ted to a hos­pi­tal.

    At the CDC, work­ers con­duct­ed tele­phone sur­veys to ask peo­ple whether they had come down with flu-like symp­toms around the time the out­break began in April and May and, if so, whether they’d seen a doc­tor. (Luck was on their side, Lip­sitch said, because any­one with a flu-like ill­ness in the spring almost cer­tain­ly had the new H1N1 strain because the sea­son­al flu had sub­sided. That’s not the case this time because the coro­n­avirus took off in the midst of flu sea­son.)

    With­in eight months, sci­en­tists had a reli­able mod­el of the H1N1 virus that includ­ed every­one except those who were infect­ed with­out real­iz­ing it. To count them, researchers would need to col­lect blood sam­ples from ran­dom­ly select­ed mem­bers of the pub­lic and test them for H1N1 anti­bod­ies, a sign that the per­son had been exposed and their immune sys­tem had respond­ed. But such tests were too time-con­sum­ing and expen­sive to jus­ti­fy.

    In any out­break, dis­ease sever­i­ty data tend to skew high at first, for the sim­ple rea­son that the sick­est patients are most notice­able.

    “The patients who are worse off are more like­ly to seek med­ical care and be diag­nosed,” Mes­son­nier said.

    In the ear­ly days of the H1N1 influen­za pan­dem­ic, which was traced to pigs in Mex­i­co, it looked like 10% of peo­ple infect­ed there were dying of the flu. Then health work­ers iden­ti­fied a slew of infec­tions so mild that peo­ple didn’t even see a doc­tor. Once those cas­es were tak­en into account, the death rate plunged below 0.1%, Lip­sitch said.

    “In the end, that flu was no more dead­ly than reg­u­lar sea­son­al flu,” Michaud said.

    There’s anoth­er rea­son experts think the coro­n­avirus case count is off: miss­ing data.

    Whether they acknowl­edge it or not, the out­break has Chi­nese health offi­cials strapped for time and resources. Work­ers may not have the band­width to keep records of patients with mild infec­tions, even though they belong in the total case count, Michaud said. Nor are there enough test kits avail­able to diag­nose every patient they sus­pect is infect­ed. Even the death count — the most reli­able fig­ure — could be too low.

    Experts also sus­pect Chi­nese offi­cials are with­hold­ing data that could be embar­rass­ing to them, such as the num­ber of med­ical work­ers who have died so far.

    ...

    Anoth­er com­pli­cat­ing fac­tor is that death rates for an infec­tion can vary across the globe. Dis­par­i­ties in the qual­i­ty of med­ical care are exac­er­bat­ed in an out­break, when peo­ple and resources are stretched to their lim­its.

    “Short­ages will cer­tain­ly cause more deaths in Wuhan,” Del Rio said. Mean­while, if a few dozen patients “popped up in Atlanta, they’d be treat­ed in lux­u­ry.”

    The pat­terns of infec­tion out­side Chi­na will be more use­ful for health offi­cials around the world than any data from Bei­jing. The virus’ behav­ior in the oth­er 27 coun­tries and ter­ri­to­ries that have it will pro­vide a bet­ter pic­ture of its typ­i­cal sever­i­ty — and what would hap­pen if it began spread­ing in the Unit­ed States.

    Sci­en­tists aren’t rul­ing out the pos­si­bil­i­ty that the virus will evolve in a way that makes it more lethal, or that helps it spread from per­son to per­son (or both). But they point out that it wouldn’t be in a virus’ best inter­ests to kill its host before it can spread to a new one.

    At this point, the new coro­n­avirus seems to have more in com­mon with the reg­u­lar flu than with exot­ic dis­eases like Ebo­la or Mid­dle East res­pi­ra­to­ry syn­drome (MERS), both of which had fatal­i­ty rates around 40%. Among a group of 17,000 peo­ple with con­firmed coro­n­avirus infec­tions, 3% were clas­si­fied as crit­i­cal, 15% had severe infec­tions and 82% were mild, said Dr. Maria Van Kerk­hove, the WHO’s act­ing head of emerg­ing dis­eases. Of the 2% who died, many were elder­ly with under­ly­ing health issues that made them more vul­ner­a­ble.

    “We can say pret­ty con­fi­dent­ly that this isn’t killing peo­ple left and right,” Del Rio said.

    A 2% fatal­i­ty rate may sound low, but it’s high enough to cause real dam­age in a worst-case sce­nario where the virus isn’t stopped.

    “If you can’t con­tain the spread, all bets are off,” Del Rio said. “Two per­cent of China’s pop­u­la­tion — 28 mil­lion peo­ple — is still pret­ty darn high. And 2% of the world? That would be a dis­as­ter.”

    ————

    “How dead­ly is the new coro­n­avirus? Sci­en­tists race to find the answer” by EMILY BAUMGAERTNER; The Los Ange­les Times; 02/12/2020

    At this point, the new coro­n­avirus seems to have more in com­mon with the reg­u­lar flu than with exot­ic dis­eases like Ebo­la or Mid­dle East res­pi­ra­to­ry syn­drome (MERS), both of which had fatal­i­ty rates around 40%. Among a group of 17,000 peo­ple with con­firmed coro­n­avirus infec­tions, 3% were clas­si­fied as crit­i­cal, 15% had severe infec­tions and 82% were mild, said Dr. Maria Van Kerk­hove, the WHO’s act­ing head of emerg­ing dis­eases. Of the 2% who died, many were elder­ly with under­ly­ing health issues that made them more vul­ner­a­ble.”

    Much close to the reg­u­lar flu than Ebo­la or MERS. That’s what we can con­fi­dent­ly assess so far. Still, a 2% death rate is a lot high­er than the flu. But that’s just the ini­tial esti­mate. An esti­mate based on case num­bers that sys­tem­at­i­cal­ly miss the least severe cas­es. As one expert puts it, the one thing we can pret­ty much say with cer­tain­ty is that the 2% “case fatal­i­ty rate” is too high:

    ...
    More than 60,000 infec­tions have been con­firmed, but experts are cer­tain there are at least tens of thou­sands more. Some cas­es haven’t been count­ed because patients didn’t have bio­log­i­cal sam­ples sent to a lab. Some nev­er saw a doc­tor, and oth­ers had such mild symp­toms that they didn’t even know they were sick.

    ...

    Sit­u­a­tion reports from the World Health Orga­ni­za­tion pro­vide an upper bound­ary of the mor­tal­i­ty rate. As of Wednes­day, there were more than 60,150 lab­o­ra­to­ry-con­firmed infec­tions around the world, result­ing in at least 1,365 deaths. A bit of sim­ple arith­metic indi­cates that slight­ly more than 2% of those infec­tions were fatal.

    But because the cur­rent infec­tion count is too low, that death rate — known for­mal­ly as a “case fatal­i­ty rate” or “case fatal­i­ty ratio” — is too high.

    “That’s one thing we can pret­ty much say with cer­tain­ty,” said Josh Michaud, who was an infec­tious dis­ease epi­demi­ol­o­gist with the Defense Depart­ment dur­ing the H1N1 influen­za pan­dem­ic in 2009.
    ...

    The 2009 H1NA flu that ini­tial­ly looked like it had a 10% death rate end­ed up plung­ing below 0.1% when all of the data was tak­en into account. It’s an exam­ple of the kind of vast uncer­tain­ty we’re forced to deal with in the ear­ly stages of an out­break;

    ...
    A good out­break mod­el is a lot like an ice­berg, said Marc Lip­sitch, an infec­tious dis­ease epi­demi­ol­o­gist at Harvard’s T.H. Chan School of Pub­lic Health.

    The iceberg’s tip — the part you see — is the patients who die. This is the eas­i­est num­ber to assess for the sim­ple rea­son that deaths are hard to miss.

    All the oth­er infect­ed peo­ple are the part of the ice­berg that’s under­wa­ter. Epi­demi­ol­o­gists divide them into tiers.

    Just below the sur­face are the patients who get sick enough to be hos­pi­tal­ized. Below them are patients who seek basic med­ical atten­tion. The next tier is made up of peo­ple who nurse their ill­ness­es at home, and the last is the peo­ple who have no symp­toms.

    In 2009, when Lip­sitch was help­ing the CDC deter­mine the sever­i­ty of the H1N1 flu, he and his fel­low researchers rec­og­nized that no sin­gle data source could cap­ture all five tiers. So they gath­ered sur­veil­lance data from var­i­ous parts of the U.S. health sys­tem and pieced them togeth­er to gen­er­ate their ice­berg mod­el.

    ...

    In the ear­ly days of the H1N1 influen­za pan­dem­ic, which was traced to pigs in Mex­i­co, it looked like 10% of peo­ple infect­ed there were dying of the flu. Then health work­ers iden­ti­fied a slew of infec­tions so mild that peo­ple didn’t even see a doc­tor. Once those cas­es were tak­en into account, the death rate plunged below 0.1%, Lip­sitch said.

    “In the end, that flu was no more dead­ly than reg­u­lar sea­son­al flu,” Michaud said.
    ...

    And note how the offi­cial Chi­nese gov­ern­ment tal­ly of infec­tions appeared to be sig­nif­i­cant­ly under­es­ti­mat­ing the num­ber of cas­es. It’s a prob­lem, but it’s the kind of prob­lem that is like­ly to make the virus seem more dead­ly than it actu­al­ly is:

    ...
    Dr. Nan­cy Mes­son­nier, direc­tor of the Nation­al Cen­ter for Immu­niza­tion and Res­pi­ra­to­ry Dis­eases at the Cen­ters for Dis­ease Con­trol and Pre­ven­tion, said the 2% fatal­i­ty rate “has been rel­a­tive­ly sta­ble” so far in the out­break. “But whether that actu­al­ly is a real case fatal­i­ty ratio or not, I just don’t think that we have the infor­ma­tion right now to say.”

    When an out­break involves a nev­er-before-seen virus, there are no short­cuts epi­demi­ol­o­gists can take to deter­mine how many peo­ple have got­ten sick and how many have died. They’ll need to dig into a vari­ety of sources to see how many coro­n­avirus deaths were mis­tak­en­ly blamed on oth­er caus­es, and vice ver­sa. They’ll also need to fig­ure out how many infect­ed peo­ple nev­er inter­act­ed with the med­ical sys­tem.

    Researchers at Impe­r­i­al Col­lege Lon­don have mod­eled the infection’s spread based on the num­ber of con­firmed cas­es and the flow of trav­el­ers in and out of Wuhan, Chi­na, before quar­an­tines took effect. The team assumed that the virus had a five- to six-day incu­ba­tion peri­od before symp­toms appeared and that infect­ed trav­el­ers were detect­ed when they reached their des­ti­na­tions.

    The result was a case count between 1,000 and 9,700 as of Jan. 18, a date when the offi­cial tal­ly of infec­tions was below 300. Uncer­tain­ties in the mod­el result­ed in a wide error range, but the true num­ber of infect­ed peo­ple was prob­a­bly around 4,000, the team report­ed.
    ...

    The is one type of hid­den or miss­ing data that would push the death rate in the oppo­site direc­tion: hid­den deaths. But, again, that’s just much hard­er to hide than a non-severe case:

    ...
    There’s anoth­er rea­son experts think the coro­n­avirus case count is off: miss­ing data.

    Whether they acknowl­edge it or not, the out­break has Chi­nese health offi­cials strapped for time and resources. Work­ers may not have the band­width to keep records of patients with mild infec­tions, even though they belong in the total case count, Michaud said. Nor are there enough test kits avail­able to diag­nose every patient they sus­pect is infect­ed. Even the death count — the most reli­able fig­ure — could be too low.

    Experts also sus­pect Chi­nese offi­cials are with­hold­ing data that could be embar­rass­ing to them, such as the num­ber of med­ical work­ers who have died so far.

    ...

    So, yes, the thing we can say with cer­tain­ty at this point is that the death rate is below 2%. Is it less than 0.1% like a nor­mal flu? We’ll have to wait and see.
    And we can’t ignore the poten­tial for muta­tions that make the virus more dead­ly. But for now, it’s look­ing a lot more like anoth­er strain of the flu than some sort of apoc­a­lypse virus. But we would­n’t want such facts to get in the way of a good “info­dem­ic”.

    Posted by Pterrafractyl | February 18, 2020, 2:08 pm
  3. @Pterrafractyl–

    Per­haps the best indi­ca­tor that the coro­n­avirus event is part of a “bio-psy-op” is the cov­er­age itself.

    Just look­ing at the cov­er­age in the NYT (West­ern Edi­tion) today is remark­able.

    Page after page after page of cov­er­age of the coro­n­avirus, it’s eco­nom­ic effects, etc.

    Sec­ond front page sto­ry in two days about the cruise ship in Japan.

    Last count–roughly 70,000 infect­ed, rough­ly ‘1,800 deaths.

    This is in a coun­try five times the size of the U.S.

    In the U.S., the flu epi­dem­ic of 2017–2018–the worst in 40 years–infected 45 mil­lion and killed 80,000, accord­ing to the CDC.

    And yet, we did­n’t hear Chick­en Lit­tle warn­ing that “the sky is falling”!

    Note a pas­sage in the NYT arti­cle you includ­ed in your com­ment (and which failed to men­tion that J. Kyle Bass is an asso­ciate of Steve Ban­non, Guo Wen­gui and a prob­a­ble invest­ment part­ner of Tom­my Hicks and that Bass–and prob­a­bly Hicks–have mon­ey invest­ed in bet­ting against the Chi­nese econ­o­my.)

    Hicks is tied to the Com­merce Depart­ment and oth­er gov­ern­ment agen­cies who are going all out on the Huawei squeeze.

    That pas­sage ” . . . .Although much remains unknown about the coro­n­avirus, experts gen­er­al­ly dis­miss the idea that it was cre­at­ed by human hands. Sci­en­tists who have stud­ied the coro­n­avirus say it resem­bles SARS and oth­er virus­es that come from bats. While con­ta­gious, so far it appears to large­ly threat­en the lives of old­er peo­ple with chron­ic health issues, mak­ing it a less-than-effec­tive bioweapon. . . .”

    Does­n’t sound too dead­ly to me.

    Note, also that just such a virus WAS syn­the­sized in a U.S. lab, as report­ed in 2008: ” . . . . Here, we report the design, syn­the­sis, and recov­ery of the largest syn­thet­ic repli­cat­ing life form, a 29.7‑kb bat severe acute res­pi­ra­to­ry syn­drome (SARS)-like coro­n­avirus (Bat-SCoV), a like­ly prog­en­i­tor to the SARS-CoV epi­dem­ic. Syn­thet­ic recom­bi­nant bat SARS-like coro­n­avirus is infec­tious in cul­tured cells and in mice. . . .”

    https://www.researchgate.net/publication/23500739_Synthetic_recombinant_bat_SARS-like_coronavirus_is_infectious_in_cultured_cells_and_in_mice

    Note, also, that no major U.S. news out­let report­ed on the drug cock­tail that appar­ent­ly was quite suc­cess­ful against the virus when used in Thai­land.

    WHY NOT?!! If this virus is so damn awful, why not report this?

    Reuters did as did Agence France Presse–major wire ser­vices.

    Note that the exhalt­ed “New York Times” DID man­age to report that remdesivir–which just hap­pens to be made by Gilead, one of Robert Mer­cer’s hedge fund’s biggest holdings–has enjoyed some suc­cess and that the Chi­nese have applied to a patent.

    Sher­lock Holmes not­ed the sig­nif­i­cance of “the dog that did­n’t bark.”

    Too bad Amer­i­cans can’t fig­ure out that this is “ele­men­tary, my dear Wat­son!”

    Do take note of the oth­er aspects of what has been report­ed in the shows done to date.

    The years-long mora­to­ri­um on the test­ing of these virus­es was end­ed at the end of 2017.

    In Octo­ber of 2019, there just hap­pened to be a major exer­cise in New York City about “Virus X”–which may well be dri­ving the sen­sa­tion­al­ist, weaponized cov­er­age of this virus.

    All of this is tak­ing place in the con­text of an obvi­ous desta­bi­liza­tion effort against Chi­na.

    Keep up the great work!

    Best,

    Dave

    Posted by Dave Emory | February 18, 2020, 5:49 pm
  4. Here’s a set of arti­cles about the eco­nom­ic impact already hit­ting Chi­na’s econ­o­my from the coro­n­avirus. Keep in mind that bet­ting on a crash­ing Chi­nese econ­o­my is one of the core finan­cial bets made by J. Kyle Bass, so the worse things get for Chi­na’s econ­o­my the more mon­ey we should expect Bass and his co-investors to make:

    First, here’s an arti­cle about how a grow­ing num­ber of Chi­nese com­pa­nies aren’t able to afford to pay their work­ers. In many cas­es it’s work­ers who aren’t com­ing into work because of the coro­n­avirus. Many com­pa­nies are also cut­ting salaries in response to the eco­nom­ic slow­down. It’s unclear how many com­pa­nies are cut­ting or elim­i­nat­ing work­er pay at this point but a sur­vey of the Chi­nese recruit­ment web­site Zhaopin found that a third of respon­dees said they were aware it was a pos­si­bil­i­ty that they would­n’t get paid or might not get paid their full salaries. Small busi­ness are thought to be espe­cial­ly vul­ner­a­ble to the eco­nom­ic shock and most like­ly not to pay their employ­ees. It’s a reminder that that while the coro­n­avirus’s impact on Chi­na is going to have eco­nom­ic impact around the world due to Chi­na’s key role in glob­al sup­ply chains, it’s the Chi­nese domes­tic econ­o­my that’s prob­a­bly going to be hit the hard­est. As Chang Shu, Chief Asia Econ­o­mist for Bloomberg Intel­li­gence, warned, “The coro­n­avirus may hit Chi­nese con­sump­tion hard­er than SARS 17 years ago, and SARS wal­loped con­sump­tion”:

    Bloomberg News

    Chi­nese Com­pa­nies Say They Can’t Afford to Pay Work­ers Now

    By Lulu Yilun Chen and Jin­shan Hong
    Feb­ru­ary 18, 2020, 8:02 PM CST Cor­rect­ed Feb­ru­ary 18, 2020, 11:45 PM CST

    * Coro­n­avirus pre­cau­tions are keep­ing cus­tomers, trav­el­ers home
    * The pri­vate sec­tor, China’s fastest-grow­ing, is hard­est hit

    A grow­ing num­ber of China’s pri­vate com­pa­nies have cut wages, delayed pay­checks or stopped pay­ing staff com­plete­ly, say­ing that the eco­nom­ic toll of the coro­n­avirus has left them unable to cov­er their labor costs.

    To slow the spread of the virus that’s claimed more than 2,000 lives, Chi­nese author­i­ties and big employ­ers have encour­aged peo­ple to stay home. Shop­ping malls and restau­rants are emp­ty, amuse­ment parks and the­aters are closed, non-essen­tial trav­el is all but for­bid­den.

    What’s good for con­tain­ment has been lousy for busi­ness. With class­es can­celed at a cod­ing-and-robot­ics school in Hangzhou, employ­ees will lose 30% to 50% of their wages. The Lion­s­gate Enter­tain­ment World theme park in Zhuhai is closed, and work­ers have been told to use up their paid vaca­tion time and get ready for unpaid leave.

    “A week of unpaid leave is very painful,” said Jason Lam, 32, who was fur­loughed from his job as a chef in a high-end restau­rant in Hong Kong’s Tsim Sha Tsui neigh­bor­hood. “I don’t have enough income to cov­er my spend­ing this month.”

    Across Chi­na, com­pa­nies are telling work­ers that there’s no mon­ey for them — or that they shouldn’t have to pay full salaries to quar­an­tined employ­ees who don’t come to work. It’s too soon to say how many peo­ple have lost wages as a result of the out­break, but in a sur­vey of more than 9,500 work­ers by Chi­nese recruit­ment web­site Zhaopin, more than one-third said they were aware it was a pos­si­bil­i­ty.

    The salary freezes are fur­ther evi­dence of the eco­nom­ic hit to China’s volatile pri­vate sec­tor — the fastest grow­ing part of the world’s sec­ond-biggest econ­o­my — and among small firms espe­cial­ly. It also sug­gests the stress will extend beyond the health risks to the finan­cial pain that comes with job cuts and salary insta­bil­i­ty. Unsur­pris­ing­ly, hir­ing has all but ground to a halt: Zhaopin esti­mates the num­ber of job resumes sub­mit­ted in the first week after the Jan­u­ary out­break was down 83% from a year ear­li­er.

    “The coro­n­avirus may hit Chi­nese con­sump­tion hard­er than SARS 17 years ago,” said Chang Shu, Chief Asia Econ­o­mist for Bloomberg Intel­li­gence. “And SARS wal­loped con­sump­tion.”

    By law, com­pa­nies have to com­ply with a full pay cycle in Feb­ru­ary before cut­ting wages to the min­i­mum, said Edgar Choi, author of “Com­mer­cial Law in a Minute” and host of a legal-advice account on WeChat. For com­pa­nies that aren’t mak­ing enough to cov­er pay­roll, it’s per­mis­si­ble to delay salaries, as long as staff get the mon­ey they’re owed even­tu­al­ly.

    Choi said he’s heard from thou­sands of for­eign work­ers who say their pay­ments have been cut in half this month or halt­ed althogeth­er. That, he said, is ille­gal. “A lot of these employ­ees are for­eign­ers, they don’t know Chi­nese,” he said. “What­ev­er their boss tells them, that’s it. It’s easy for them to get bul­lied.”

    NIO Inc., an elec­tric car-mak­er based in Shang­hai, recent­ly delayed pay­checks by a week. The company’s chair­man William Li also encour­aged employ­ees to accept restrict­ed stock units in lieu of a cash bonus.

    At Fox­conn Tech­nol­o­gy Group’s Shen­zhen fac­to­ry, work­ers return­ing from the Lunar New Year break are quar­an­tined in the dorms before they can return to work. They’re get­ting paid, but only about one-third of what they’d earn if they were work­ing.

    With­out full, reg­u­lar pay­checks and few places to spend them these days any­way, Chi­nese con­sumers could cut spend­ing in some cat­e­gories to zero, said Bloomberg’s Shu. And it may not bounce back: For exam­ple, she said, if you skip your dai­ly lat­te for two months, you’re not like­ly to make up for those missed drinks lat­er in the year.

    With lim­it­ed reserves and less by way of remote tech­nolo­gies, the small­er com­pa­nies that under­pin China’s vast pri­vate sec­tor are par­tic­u­lar­ly vul­ner­a­ble. Among broad­er efforts to help firms stay afloat, pol­i­cy mak­ers have called on state-run banks to make loans at cheap­er rates to small busi­ness­es in par­tic­u­lar.

    ...

    ———-

    “Chi­nese Com­pa­nies Say They Can’t Afford to Pay Work­ers Now” by Lulu Yilun Chen and Jin­shan Hong, Bloomberg News, 02/18/2020

    “To slow the spread of the virus that’s claimed more than 2,000 lives, Chi­nese author­i­ties and big employ­ers have encour­aged peo­ple to stay home. Shop­ping malls and restau­rants are emp­ty, amuse­ment parks and the­aters are closed, non-essen­tial trav­el is all but for­bid­den.

    Emp­ty malls, closed parks, and non-essen­tial trav­el for­bid­den. That’s quite an eco­nom­ic shock. Worse than SARS, a virus that was far dead­lier.

    ...
    Across Chi­na, com­pa­nies are telling work­ers that there’s no mon­ey for them — or that they shouldn’t have to pay full salaries to quar­an­tined employ­ees who don’t come to work. It’s too soon to say how many peo­ple have lost wages as a result of the out­break, but in a sur­vey of more than 9,500 work­ers by Chi­nese recruit­ment web­site Zhaopin, more than one-third said they were aware it was a pos­si­bil­i­ty.

    The salary freezes are fur­ther evi­dence of the eco­nom­ic hit to China’s volatile pri­vate sec­tor — the fastest grow­ing part of the world’s sec­ond-biggest econ­o­my — and among small firms espe­cial­ly. It also sug­gests the stress will extend beyond the health risks to the finan­cial pain that comes with job cuts and salary insta­bil­i­ty. Unsur­pris­ing­ly, hir­ing has all but ground to a halt: Zhaopin esti­mates the num­ber of job resumes sub­mit­ted in the first week after the Jan­u­ary out­break was down 83% from a year ear­li­er.

    “The coro­n­avirus may hit Chi­nese con­sump­tion hard­er than SARS 17 years ago,” said Chang Shu, Chief Asia Econ­o­mist for Bloomberg Intel­li­gence. “And SARS wal­loped con­sump­tion.”
    ...

    And it’s the small­er com­pa­nies that are the most vul­ner­a­ble, prompt­ing offi­cials to call on state-run banks to make cheap loans tar­get­ing small busi­ness­es:

    ...
    With lim­it­ed reserves and less by way of remote tech­nolo­gies, the small­er com­pa­nies that under­pin China’s vast pri­vate sec­tor are par­tic­u­lar­ly vul­ner­a­ble. Among broad­er efforts to help firms stay afloat, pol­i­cy mak­ers have called on state-run banks to make loans at cheap­er rates to small busi­ness­es in par­tic­u­lar.
    ...

    Now here’s an arti­cle about how new bank loans in Chi­na hit a record high in Jan­u­ary, pre­sum­ably reflect­ing the grow­ing need for cash just to keep the busi­ness­es oper­at­ing and employ­ees (maybe) paid. The PBOC, Chi­na’s cen­tral bank, also cut its bench­mark lend­ing rate today as part of a push to ease the financ­ing costs for busi­ness. As the arti­cle notes, it’s the small and rur­al banks that the most at risk in this envi­ron­ment and a stress test last year by the PBOC found that 13 per­cent of banks were con­sid­ered “high risk”. So the num­ber of “high risk” Chi­nese banks is going to be high­er than 13 per­cent by now, with a lot more dis­tressed small and rur­al banks:

    Reuters

    Chi­na Jan new bank loans hit record, more pol­i­cy sup­port seen

    Judy Hua, Kevin Yao
    Feb­ru­ary 20, 2020 / 3:04 AM / Updat­ed

    BEIJING (Reuters) — New bank loans in Chi­na rose more than expect­ed to a record high in Jan­u­ary, as author­i­ties step up sup­port for an econ­o­my hit by trade ten­sions and fac­ing a new threat from a fast-spread­ing coro­n­avirus out­break.

    Chi­nese banks tend to front-load loans at the begin­ning of the year to get high­er-qual­i­ty cus­tomers and win mar­ket share.

    Banks extend­ed a record 3.34 tril­lion yuan ($476.42 bil­lion) in new yuan loans in Jan­u­ary, up from 1.14 tril­lion yuan in Decem­ber and exceed­ing ana­lyst expec­ta­tions, accord­ing to data released by the People’s Bank of Chi­na (PBOC) on Thurs­day.

    Ana­lysts polled by Reuters had pre­dict­ed new yuan loans would rise to 3.00 tril­lion yuan in Jan­u­ary, com­pared with the pri­or record 3.23 tril­lion yuan a year ear­li­er.

    House­hold loans, most­ly mort­gages, fell to 634.1 bil­lion yuan in Jan­u­ary from 645.9 bil­lion yuan in Decem­ber, while cor­po­rate loans rock­et­ed to 2.86 tril­lion yuan from 424.4 bil­lion yuan, accord­ing to Reuters cal­cu­la­tion based on cen­tral bank data.

    Chi­nese reg­u­la­tors have been try­ing to boost bank lend­ing and low­er financ­ing costs for over a year, espe­cial­ly for small­er and pri­vate com­pa­nies which gen­er­ate a size­able share of the country’s eco­nom­ic growth and jobs.

    Growth in the world’s sec­ond-biggest econ­o­my slowed to 6.1% in 2019, the weak­est pace since 1990, as demand at home and abroad slowed in part due to the Sino‑U.S. trade war.

    On Thurs­day, the PBOC cut the bench­mark lend­ing rate — the loan prime rate (LPR), as the author­i­ties move to low­er financ­ing costs for busi­ness­es to help sup­port the econ­o­my jolt­ed by the virus out­break.

    “We expect fur­ther mon­e­tary eas­ing in the com­ing weeks, both tar­get­ed and broad based, in an effort to shore up cred­it growth and eco­nom­ic activ­i­ty,” Julian Evans-Pritchard at Cap­i­tal Eco­nom­ics said.

    The Lunar New Year, which fell at the end of Jan­u­ary, and China’s extend­ed hol­i­day break and lock­down of sev­er­al cities to con­trol the spread­ing epi­dem­ic, is like­ly to put a brake on lend­ing for some time.

    But the cen­tral bank and reg­u­la­tors are gear­ing up to boost lend­ing and low­er fund­ing costs. Chi­nese banks have doled out more than 537 bil­lion yuan in cred­it to help fight the virus out­break, offi­cials have said.

    ...

    MORE POLICY STEPS EXPECTED

    Annu­al growth of out­stand­ing total social financ­ing (TSF), a broad mea­sure of cred­it and liq­uid­i­ty in the econ­o­my, stood at 10.7% in Jan­u­ary, unchanged from in Decem­ber.

    TSF includes off-bal­ance sheet forms of financ­ing that exist out­side the con­ven­tion­al bank lend­ing sys­tem, such as ini­tial pub­lic offer­ings, loans from trust com­pa­nies and bond sales.

    In Jan­u­ary, TSF jumped to 5.07 tril­lion yuan from 2.103 tril­lion yuan in Decem­ber. Ana­lysts polled by Reuters had expect­ed Jan­u­ary TSF of 4.3 tril­lion yuan.

    Pol­i­cy sources have told Reuters the gov­ern­ment plans to roll out more sup­port mea­sures as the coro­n­avirus epi­dem­ic, which has killed more than 2,100 peo­ple and infect­ed over 74,000, is expect­ed to have a dev­as­tat­ing impact on first-quar­ter growth.

    Over the past two years, Bei­jing has been rely­ing on a mix of mon­e­tary and fis­cal mea­sures to weath­er the down­turn, cut­ting tax­es and issu­ing local gov­ern­ment bonds to fund infra­struc­ture projects while try­ing to spur lend­ing, espe­cial­ly for small firms.

    The PBOC has cut reserve require­ment ratios (RRR) eight times since ear­ly 2018, with the lat­est reduc­tion tak­ing effect on Jan. 6.

    A sharp drop in cor­po­rate sales and cash flow caused by the out­break is like­ly to put more stress on China’s’s finan­cial sys­tem, par­tic­u­lar­ly small, rur­al banks. A stress test by the PBOC last year said more than 13% of lenders were con­sid­ered “high risk”.

    Some relief could come from the trade front after Bei­jing and Wash­ing­ton signed a Phase 1 deal last month to defuse a pro­tract­ed tar­iff war.

    ———–

    “Chi­na Jan new bank loans hit record, more pol­i­cy sup­port seen” by Judy Hua, Kevin Yao, Reuters, 02/20/2020

    “A sharp drop in cor­po­rate sales and cash flow caused by the out­break is like­ly to put more stress on China’s’s finan­cial sys­tem, par­tic­u­lar­ly small, rur­al banks. A stress test by the PBOC last year said more than 13% of lenders were con­sid­ered “high risk”.”

    13 per­cent of Chi­nese banks were “high risk”. That’s what the PBOC found in Novem­ber of 2019, so this 13 per­cent esti­mate is based on data that pre­cedes the coro­n­avirus out­break. It was a time­ly stress test giv­en the enor­mous stress­es the coun­try’s finan­cial sys­tem is now fac­ing.

    Now here’s a Finan­cial Times arti­cle about a warn­ing from Stan­dard & Poors that Chi­na’s bank­ing sys­tem could face a surge in non-per­form­ing loans (NPLs) this year in response to the virus. S&P esti­mates that the vol­ume of NPLs could grow as much as 7.7 tril­lion Rmb ($1.1 tril­lion), from a cur­rent lev­el of just under 2.5 tril­lion Rmd. The range of S&P esti­mates was a “upside” surge of only 3.4 tril­lion Rmb, a “base­line” surge of 5.4 tril­lion Rmb, and the worst-case “down­side” surge of 7.7 tril­lion Rmb. Sim­i­lar­ly, S&P expects a best-case sce­nario of GDP growth of 5.5 per­cent (which is very low com­pared to recent years and below the 6.1 per­cent for 2019), a base­line sce­nario of 5 per­cent GDP growth (which would be the low­est in three decades) and a worst-case sce­nario of 4.4 per­cent GDP growth for 2020. So, at best, S&P expects a some­what slow­ing econ­o­my and the num­ber of NPLs in Chi­na’s bank­ing sys­tem to more than dou­ble and at worst they expect a dra­mat­i­cal­ly slow­ing econ­o­my and the NPLs to quadru­ple:

    The Finan­cial Times

    Coro­n­avirus lat­est: China’s banks to face up to $1.1tn surge in ques­tion­able loans, S&P warns

    China’s key lend­ing rate has been cut as Bei­jing attempts to steady the country’s econ­o­my, which is reel­ing from the Covid-19 out­break. More than 75,000 peo­ple have been infect­ed with coro­n­avirus glob­al­ly, with South Korea report­ing on Thurs­day a sharp rise in cas­es.

    * Coro­n­avirus puts stocks at ‘high’ risk of cor­rec­tion, Gold­man warns
    * Coro­n­avirus: cruise indus­try caught in the eye of the storm
    * Virus expos­es west­ern uni­ver­si­ties’ reliance on Chi­na
    * US warns against releas­ing cruise ship pas­sen­gers in Japan

    Alice Wood­house, Adam Sam­son
    02/19/2020 10:43 pm

    Chi­na’s lenders may be hit with an increase of as much as Rmb7.7tn ($1.1tn) in ques­tion­able loans as the coro­n­avirus out­break deals a heavy blow to Chi­na’s econ­o­my, S&P Glob­al Rat­ings has warned.

    The Covid-19 out­break, which has prompt­ed Chi­na to lock down large swaths of its sprawl­ing econ­o­my, will cause some indi­vid­u­als and com­pa­nies to “have dif­fi­cul­ty with debt repay­ment,” S&P said in a report issued on Thurs­day in Hong Kong.

    In a worst-case sce­nario in which the out­break does not peak until April, S&P fore­casts Chi­na’s econ­o­my, the sec­ond biggest in the world, will expand 4.4 per cent in 2020. That would mark a dra­mat­ic slow­down from the 6.1 per cent growth in 2019 and be the weak­est pace since 1990, accord­ing to World Bank data.

    [see plot of ques­tion­able loans in Chi­na’s bank­ing sys­tem show cur­rent lev­el just under 2.5 tril­lion Rmb]

    S&P’s base sce­nario, in which the virus peaks next month, points to 2020 growth of 5 per cent, which would also be the low­est in three decades. Even in the best case in which the virus peaks in Feb­ru­ary, GDP growth is fore­cast at 5.5 per cent.

    The “growth shock” would cause the val­ue of non-per­form­ing loans in Chi­na’s bank­ing sec­tor to surge by Rmb7.7tn to Rmb10.1tn in S&P’s worst-case sce­nario. In the base case, the fig­ure would jump Rmb5.4tn to Rmb7.8tn. In the best case, the NPLs would rise Rmb3.4tn to Rmb5.8tn. The ratio of NPLs to total loans would be 7.8 per cent, 6 per cent and 4.5 per cent in the worst, base and best case sce­nar­ios, respec­tive­ly.

    S&P said it also expects Chi­nese reg­u­la­tors to relax rules for what counts as a bad loan and poten­tial­ly give cer­tain loans to affect­ed com­mu­ni­ties and busi­ness “spe­cial con­sid­er­a­tion” in how they are account­ed for on bank bal­ance sheets.

    The rat­ings firm said it “may take years for domes­tic banks to revert to nor­mal stan­dards, with long-term reper­cus­sions for the cred­it­wor­thi­ness of some insti­tu­tions.”

    ...

    [see chart of sce­nar­ios for Chi­na’s econ­o­my that show an “Upside” increase in Non-per­form­ing loans (NPLs) by 3.4 tril­lion, a Base­line increase of 5.4 tril­lion, and a “Down­side” increase of 7.7 mil­lion loans]

    ————

    “Coro­n­avirus lat­est: China’s banks to face up to $1.1tn surge in ques­tion­able loans, S&P warns” by Alice Wood­house, Adam Sam­son, The Finan­cial Times, 02/19/2020

    “In a worst-case sce­nario in which the out­break does not peak until April, S&P fore­casts Chi­na’s econ­o­my, the sec­ond biggest in the world, will expand 4.4 per cent in 2020. That would mark a dra­mat­ic slow­down from the 6.1 per cent growth in 2019 and be the weak­est pace since 1990, accord­ing to World Bank data.

    A dra­mat­ic slow­down for Chi­na’s econ­o­my. That’s S&P’s worst case sce­nario. But the best case sce­nario is still a slow­down. And even the base­line sce­nario would be the slow­est growth for Chi­na in three decades. And under any of their sce­nar­ios, the non-per­form­ing loans would surge:

    ...
    S&P’s base sce­nario, in which the virus peaks next month, points to 2020 growth of 5 per cent, which would also be the low­est in three decades. Even in the best case in which the virus peaks in Feb­ru­ary, GDP growth is fore­cast at 5.5 per cent.

    The “growth shock” would cause the val­ue of non-per­form­ing loans in Chi­na’s bank­ing sec­tor to surge by Rmb7.7tn to Rmb10.1tn in S&P’s worst-case sce­nario. In the base case, the fig­ure would jump Rmb5.4tn to Rmb7.8tn. In the best case, the NPLs would rise Rmb3.4tn to Rmb5.8tn. The ratio of NPLs to total loans would be 7.8 per cent, 6 per cent and 4.5 per cent in the worst, base and best case sce­nar­ios, respec­tive­ly.
    ...

    And note the expec­ta­tion by S&P that Chi­nese reg­u­la­tors are going to relax rules for what counts as bad loans:

    ...
    S&P said it also expects Chi­nese reg­u­la­tors to relax rules for what counts as a bad loan and poten­tial­ly give cer­tain loans to affect­ed com­mu­ni­ties and busi­ness “spe­cial con­sid­er­a­tion” in how they are account­ed for on bank bal­ance sheets.

    The rat­ings firm said it “may take years for domes­tic banks to revert to nor­mal stan­dards, with long-term reper­cus­sions for the cred­it­wor­thi­ness of some insti­tu­tions.”
    ...

    Now here’s an arti­cle from May of 2019 that describes how Chi­nese reg­u­la­tors were encour­ag­ing more lend­ing to small and mid-sized busi­ness­es but also tight­en the stan­dards for what con­sti­tutes a bad loan. As the arti­cle not­ed, the NPLs at that point were already at a 16 year high. Keep in mind that 2003, when that high was last expe­ri­enced, was the same year SARS hit Chi­na. So Chi­na’s bank­ing sys­tem was already show­ing signs of stress in May of 2019, long before the coro­n­avirus out­break. Although note that it appears that NPLs were at a 16-year-high in absolute terms, not as a per­cent of total loans in Chi­na’s finan­cial sys­tem which has grown sub­stan­tial­ly since 2003. The indus­try-wide (NPL) ratio actu­al­ly declined slight­ly to 1.8% at the end of the first quar­ter of 2019. So there were signs of stress but it was­n’t yet at SARS-cri­sis lev­els as of May of 2019, although small and mid-sized busi­ness­es were already strug­gling. And steps were being tak­en to strength­en the lend­ing stan­dards over­all, which are prob­a­bly going to the steps that get reversed by reg­u­la­tors as NPLs surge and Chi­na attempts to ward off a full blown bank­ing cri­sis:

    Reuters

    Chi­na bank first-quar­ter bad loans hit 16-year-high as reg­u­la­tor tight­ens over­sight

    Cheng Leng, Shu Zhang
    May 10, 2019 / 3:30 AM

    BEIJING/SINGAPORE (Reuters) — The amount of non-per­form­ing loans (NPLs) at China’s com­mer­cial banks rose to 2.16 tril­lion yuan ($317.66 bil­lion) at the end of March, the high­est since the end of 2003, offi­cial data showed on Fri­day, as Bei­jing steps up efforts to curb finan­cial risks.

    While NPLs rose 95.7 bil­lion yuan from the start of the year, the indus­try-wide (NPL) ratio declined slight­ly to 1.8% at the end of the first quar­ter, com­pared with 1.89% at the end of 2018, Liu Zhiqing, deputy head of the sta­tis­tics depart­ment at the Chi­na Bank­ing and Insur­ance Reg­u­la­to­ry Com­mis­sion (CBIRC) told reporters.

    The dip in the NPL ratio like­ly stemmed from record bank lend­ing in the quar­ter. Many ana­lysts believe that the NPL ratio of Chi­nese banks is sig­nif­i­cant­ly high­er than report­ed.

    The bad-loan data comes at a time Chi­nese author­i­ties have been push­ing banks to sharply hike their lend­ing to small and mid-sized busi­ness­es, to help com­bat a slow­down in eco­nom­ic growth.

    To fend off poten­tial sys­temic finan­cial risks, Bei­jing is tight­en­ing grips on its 276 tril­lion yuan bank­ing sec­tor, with stricter over­sight of lenders’ asset qual­i­ty.

    New draft rules released last month require lenders to rec­og­nize not only bad loans but also default­ed bonds, sour­ing inter­bank assets and off-bal­ance sheet busi­ness­es as non-per­form­ing assets, and that the lenders should set aside more cap­i­tal as a buffer.

    The draft rules also require banks to clas­si­fy loans that are more than 90 days over­due as NPLs, even if those loans are backed by col­lat­er­al.

    Liu, com­ment­ing on the draft rules, said they would have “lim­it­ed impact” on banks’ asset qual­i­ty, and would not trig­ger a spike in non-per­form­ing assets.

    He said the reg­u­la­tor would encour­age banks capa­ble of doing so of clas­si­fy­ing loans more than 60 days over­due as NPLs, but that was not com­pul­so­ry.

    ...

    ———–

    “Chi­na bank first-quar­ter bad loans hit 16-year-high as reg­u­la­tor tight­ens over­sight” by Cheng Leng, Shu Zhang, Reuters, 05/10/2019

    “The bad-loan data comes at a time Chi­nese author­i­ties have been push­ing banks to sharply hike their lend­ing to small and mid-sized busi­ness­es, to help com­bat a slow­down in eco­nom­ic growth.”

    Ris­ing non-per­form­ing loans at the same time Chi­nese author­i­ties were try­ing to encour­age a sharp increase in the lend­ing to small and mid-sized busi­ness­es. So there was pre­sum­ably a spike in loans to small and mid-sized Chi­nese busi­ness in the months lead­ing up to the eco­nom­ic shock from this virus that’s hit­ting small and mid-sized busi­ness­es par­tic­u­lar­ly hard. It’s pret­ty omi­nous.

    At the same time, reg­u­la­tors did strength­en lend­ing stan­dards and required lenders to clas­si­fy more bad loans as offi­cial­ly non-per­form­ing. Offi­cials were assur­ing mar­kets that the new rules would not trig­ger a spike in NPLs:

    ...
    To fend off poten­tial sys­temic finan­cial risks, Bei­jing is tight­en­ing grips on its 276 tril­lion yuan bank­ing sec­tor, with stricter over­sight of lenders’ asset qual­i­ty.

    New draft rules released last month require lenders to rec­og­nize not only bad loans but also default­ed bonds, sour­ing inter­bank assets and off-bal­ance sheet busi­ness­es as non-per­form­ing assets, and that the lenders should set aside more cap­i­tal as a buffer.

    The draft rules also require banks to clas­si­fy loans that are more than 90 days over­due as NPLs, even if those loans are backed by col­lat­er­al.

    Liu, com­ment­ing on the draft rules, said they would have “lim­it­ed impact” on banks’ asset qual­i­ty, and would not trig­ger a spike in non-per­form­ing assets.
    ...

    And at the time, the rule changes may not have caused a spike. But it seems like a sure bet that there’s going to be more loans that get clas­si­fied as NPLs today with Chi­na’s econ­o­my at a stand­still as a result of these new rules which is why the spec­u­la­tion by S&P and oth­ers that the def­i­n­i­tions for a bad loan will be weak­ened seems like a rea­son­able pre­dic­tion. A whole lot of those loans made to small and mid-sized busi­ness­es over the last year are prob­a­bly going bad right about now or about to go bad. After all, if com­pa­nies can’t pay their employ­ees, they prob­a­bly can’t pay their debts either.

    So as the coro­n­avirus grinds Chi­na’s econ­o­my to a halt, it’s going to be quite a test of the Chi­nese gov­ern­men­t’s abil­i­ty to man­age an eco­nom­ic shock that threat­ens to become a finan­cial sys­tem shock. There are clear­ly huge dan­gers ahead for Chi­nese banks and busi­ness­es but the scope of those dan­gers remains unclear. It might be just kind of bad or might be real­ly, real­ly, real­ly bad. And that mas­sive eco­nom­ic dan­ger for Chi­na looms whether or not the coro­n­avirus itself ends up being excep­tion­al­ly nasty or no worse than the typ­i­cal flu.

    Posted by Pterrafractyl | February 20, 2020, 2:52 pm
  5. Here’s a chill­ing set of updates on the nature of the coro­n­avirus, which is now being offi­cial­ly named SARS-CoV­‑2, and how it spreads: a new study pub­lished in the New Eng­land Jour­nal of Med­i­cine has found that SARS-CoV­‑2 is unlike all pre­vi­ous­ly dis­cov­ered coro­n­avirus­es in terms of how it spreads. Unlike SARS, which only infect­ed deep in the low­er res­pi­ra­to­ry tract, the new SARS-CoV­‑2 virus infects both the low­er and upper res­pi­ra­to­ry tracts giv­ing it the abil­i­ty to spread via air­borne trans­mis­sions. That makes it spread much more like the flu or com­mon cold than like any oth­er known coro­n­avirus.

    In addi­tion, the researchers found that lev­els of the virus increased soon after symp­toms first appeared, with high­er amounts in the nose than in the throats, which is also more con­sis­tent with influen­za than SARS. Of the 18 patients they exam­ined, one had mod­er­ate lev­els in their nose and throat but no symp­toms, so peo­ple who are asymp­to­matic can still poten­tial­ly spread the virus. It’s this com­bi­na­tion of air­borne trans­mis­sions and asymp­to­matic patients who are still shed­ding the virus that makes this a par­tic­u­lar­ly infec­tious dis­ease.

    This sud­den anom­alous new abil­i­ty to infect the upper res­pi­ra­to­ry tract, of course, brings up the chill­ing exper­i­ments where researchers mod­i­fied the H5N1 bird flu virus until it was capa­ble of air­borne trans­mis­sions between fer­rets. That’s the same research that was banned by the NIH fol­low­ing the uproar but has sub­se­quent­ly been real­lowed in ear­ly 2019. That orig­i­nal 2012 study specif­i­cal­ly found that it was muta­tions that gave the virus the abil­i­ty to infect the upper res­pi­ra­to­ry tracts of the fer­rets that made it an air­borne virus. We have yet to year if the SAR-CoV­‑2 virus had the same or sim­i­lar muta­tions to those that were induced in the H5N1 bird flu virus exper­i­ment but it seems like­ly.

    So the infec­tious­ness of the SARS-CoV­‑2 coro­n­avirus is unprece­dent­ed based on this new study. As one immu­nol­o­gist put it, “This virus is clear­ly much more capa­ble of spread­ing between humans than any oth­er nov­el coro­n­avirus we’ve ever seen. This is more akin to the spread of flu”:

    Reuters

    New coro­n­avirus spreads more like flu than SARS: Chi­nese study

    Julie Steen­huy­sen
    Feb­ru­ary 19, 2020 / 5:32 PM

    CHICAGO (Reuters) — Sci­en­tists in Chi­na who stud­ied nose and throat swabs from 18 patients infect­ed with the new coro­n­avirus say it behaves much more like influen­za than oth­er close­ly relat­ed virus­es, sug­gest­ing it may spread even more eas­i­ly than pre­vi­ous­ly believed.

    In at least in one case, the virus was present even though the patient had no symp­toms, con­firm­ing con­cerns that asymp­to­matic patients could also spread the dis­ease.

    Although pre­lim­i­nary, the find­ings pub­lished on Wednes­day in the New Eng­land Jour­nal of Med­i­cine, offer new evi­dence that this nov­el coro­n­avirus, which has killed more than 2,000 peo­ple most­ly in Chi­na, is not like its close­ly-relat­ed coro­n­avirus cousins.

    “If con­firmed, this is very impor­tant,” said Dr. Gre­go­ry Poland, a virol­o­gist and vac­cine researcher with the Mayo Clin­ic in Rochester, Min­neso­ta, who was not involved with the study.

    Unlike Severe Acute Res­pi­ra­to­ry Syn­drome (SARS), which caus­es infec­tions deep in the low­er res­pi­ra­to­ry tract that can result in pneu­mo­nia, COVID-19 appears to inhab­it both the upper and low­er res­pi­ra­to­ry tracts. That would make it not only capa­ble of caus­ing severe pneu­mo­nia, but of spread­ing eas­i­ly like flu or the com­mon cold.

    Researchers in Guang­dong province mon­i­tored the amount of coro­n­avirus in the 18 patients. One of them, who had mod­er­ate lev­els of the virus in their nose and throat, nev­er had any dis­ease symp­toms.

    Among the 17 symp­to­matic patients, the team found lev­els of the virus increased soon after symp­toms first appeared, with high­er amounts of virus present in the nose than in the throats, a pat­tern more sim­i­lar to influen­za than SARS.

    The lev­el of virus in the asymp­to­matic patient was sim­i­lar to what was present in patients with symp­toms, such as fever.

    “What this says is clear­ly this virus can be shed out of the upper res­pi­ra­to­ry tract and that peo­ple are shed­ding it asymp­to­mati­cal­ly,” Poland said.

    The find­ings add to evi­dence that this new virus, though genet­i­cal­ly sim­i­lar, is not behav­ing like SARS, said Kris­t­ian Ander­sen, an immu­nol­o­gist at Scripps Research in La Jol­la who uses gene sequenc­ing tools to track dis­ease out­breaks.

    “This virus is clear­ly much more capa­ble of spread­ing between humans than any oth­er nov­el coro­n­avirus we’ve ever seen. This is more akin to the spread of flu,” said Ander­sen, who was not involved with the study.

    ...

    ———–

    “New coro­n­avirus spreads more like flu than SARS: Chi­nese study” by Julie Steen­huy­sen; Reuters; 02/19/2020

    “Unlike Severe Acute Res­pi­ra­to­ry Syn­drome (SARS), which caus­es infec­tions deep in the low­er res­pi­ra­to­ry tract that can result in pneu­mo­nia, COVID-19 appears to inhab­it both the upper and low­er res­pi­ra­to­ry tracts. That would make it not only capa­ble of caus­ing severe pneu­mo­nia, but of spread­ing eas­i­ly like flu or the com­mon cold.”

    That’s pret­ty scary. At the same time, it more or less sounds like human influen­za virus­es which also infect both the upper and low­er res­pi­ra­to­ry tracts in humans. Note the rea­son the H5N1 strain that was mod­i­fied in 2012 in those fer­ret exper­i­ments could­n’t already infect human upper res­pi­ra­to­ry tracts is that it was an avian virus that had just jumped to humans and had­n’t yet evolved the abil­i­ty infect upper res­pi­ra­to­ry tracts in humans. Human influen­za virus­es can nor­mal­ly infect both the upper and low­er res­pi­ra­to­ry tracts. The tru­ly scary part of this new find­ing on the SARS-CoV­‑2 coro­n­avirus is the unprece­dent­ed nature of it in a coro­n­avirus and the fact that it’s now emerg­ing not long after researchers learned how to dri­ve the evo­lu­tion of virus­es to give them the abil­i­ty to infect human upper res­pi­ra­to­ry tracts.

    It’s a scary find­ing, but as the fol­low­ing arti­cle describes, we should­n’t assume air­borne trans­mis­sions are the only way the virus is spread­ing or even nec­es­sar­i­ly the pri­ma­ry means of trans­mis­sion. At this point we don’t know. For exam­ple, the virus has also been found in human feces, much like the norovirus, mak­ing food-borne trans­mis­sion an option. And as researchers found with the SARS virus, the SARS virus was dis­cov­ered to have spread from aerosolized droplets of con­t­a­m­i­nat­ed feces, which is an exam­ple of how virus­es that haven’t yet devel­oped the abil­i­ty to spread through the air like the flu (or like this new coro­n­avirus) can still be spread through the air if the droplets or feces that the virus is con­tained in some­how becomes air­borne. And for all we know at this point it might be aerosolized droplets that are caus­ing most of the infec­tions. As one research put it, “both of these state­ments can coex­ist: Asymp­to­matic shed­ders could spread the virus, but it prob­a­bly is not the main dri­ver of this epi­dem­ic”:

    Vox

    How does the new coro­n­avirus spread? These new stud­ies offer clues.

    They also show why Covid-19 might be hard­er to con­tain than SARS.

    By Julia Bel­luz
    Updat­ed Feb 21, 2020, 6:47am EST

    How does the new coro­n­avirus dis­ease, Covid-19, spread? That’s just one of many basic, unan­swered ques­tions about this lat­est pan­dem­ic threat.

    The virus that caus­es Covid-19 — known as SARS-CoV­‑2 — has already infect­ed more than 75,000 peo­ple in two months. (Of them, 2,130 have died.) And the best expla­na­tion for this rapid spread is that it’s being passed through droplets from cough­ing or sneez­ing. When these virus-laden droplets from an infect­ed per­son reach the nose, eyes, or mouth of anoth­er, they can trans­mit the dis­ease.

    But are there oth­er ways SARS-CoV­‑2 moves between peo­ple? And what do they tell us about why this dis­ease seems to be even more con­ta­gious than SARS and MERS? The lat­est sci­ence on the virus offers pos­si­ble answers to these ques­tions — and why Covid-19 might be par­tic­u­lar­ly dif­fi­cult to stop. Here’s what we know so far.

    Peo­ple have lots of virus in their bod­ies ear­ly on in ill­ness — or even when they have no symp­toms

    Res­pi­ra­to­ry ill­ness­es gen­er­al­ly fall into two cat­e­gories: upper res­pi­ra­to­ry — infec­tions in the nose, phar­ynx, or lar­ynx, like the com­mon cold and sea­son­al influen­za; and low­er res­pi­ra­to­ry ill­ness­es, like pneu­mo­nia, which infect the lungs.

    The orig­i­nal SARS virus that spread around the world in 2003 was thought to be a low­er res­pi­ra­to­ry infec­tion: It repli­cat­ed in the cells deep with­in the lungs and caused the pneu­mo­nia. Peo­ple also seemed to only spread the virus days into their ill­ness, when it was already clear they were sick. This made SARS more dif­fi­cult to pass on to oth­ers and the job of con­tain­ing it rel­a­tive­ly easy.

    The new virus that caus­es Covid-19 dis­ease appears to be a dif­fer­ent beast: While it also can even­tu­al­ly lead to pneu­mo­nia, the virus does a great job of repli­cat­ing in the upper res­pi­ra­to­ry tract, even when peo­ple don’t have any symp­toms or just begin to feel sick.

    Check out this new New Eng­land Jour­nal of Med­i­cine paper. Chi­nese researchers mon­i­tored how much virus could be found in the upper res­pi­ra­to­ry tracts — noses and throats — of 18 patients in Guang­dong, Chi­na. One of the 18 nev­er had any symp­toms.

    The big find­ing? The way peo­ple shed this virus, poten­tial­ly expos­ing oth­ers, looked a lot more like the flu than the first SARS, which might help explain why Covid-19 appears to be more infec­tious. You can see why in this chart from the study, focused on the patients who expe­ri­enced symp­toms: Just as they were start­ing to feel ill, they had the high­est con­cen­tra­tions of virus in their noses:

    [See plot of viral counts from nasal swabs after days of the onset of symp­toms]

    ...

    In a sep­a­rate, new­ly pub­lished New Eng­land Jour­nal of Med­i­cine paper, researchers in Ger­many were also able to iso­late the virus from patients’ upper res­pi­ra­to­ry tract even before they showed any symp­toms or were very mild­ly symp­to­matic — more evi­dence of the poten­tial for spread of the virus from the nose and throat when peo­ple bare­ly know they’re sick.

    So what does this imply about the con­ta­gious­ness of Covid-19 and stop­ping the out­break? “For a virus pret­ty close­ly relat­ed to SARS, it shows very effec­tive per­son-to-per­son trans­mis­sion, some­thing nobody real­ly expect­ed,” Stephen Morse, a pro­fes­sor of epi­demi­ol­o­gy at Colum­bia Uni­ver­si­ty Mail­man School of Pub­lic Health, told Vox. Researchers cur­rent­ly believe one infect­ed per­son gen­er­al­ly infects two to more than three oth­ers, which would make the new coro­n­avirus more con­ta­gious than sea­son­al flu, SARS and MERS.

    [See plot com­par­ing trans­mis­sion rates of the Covid-19 (coro­n­avirus) to oth­er virus­es]

    Sec­ond, it means stop­ping the out­break might be more dif­fi­cult, since peo­ple start to become infec­tious ear­ly on in their dis­ease or may even spread the virus when they’re asymp­to­matic.

    But to con­firm these two find­ings, we’ll need more sci­ence, said Jen­nifer Nuz­zo, an infec­tious dis­ease expert and senior schol­ar at the Johns Hop­kins Cen­ter for Health Secu­ri­ty. “We still don’t know to what extent peo­ple with­out symp­toms can infect,” she point­ed out.

    It’s also pos­si­ble that trans­mis­sion ear­ly in the ill­ness or from asymp­to­matic peo­ple won’t end up being impor­tant con­trib­u­tors to the out­break, said Mar­i­on Koop­mans, who stud­ies emerg­ing infec­tious dis­eases and heads the depart­ment of virol­o­gy at the Eras­mus Med­ical Cen­ter in Rot­ter­dam, Nether­lands. In most parts of the world where trav­el­ers with Covid-19 turned up, she added, the spread of the dis­ease has been con­tained by only test­ing peo­ple with symp­toms. But, she added, “both of these state­ments can coex­ist: Asymp­to­matic shed­ders could spread the virus, but it prob­a­bly is not the main dri­ver of this epi­dem­ic.”

    The virus might spread through feces

    Anoth­er way virus­es can spread is through poop. Think of the norovirus, the extreme­ly con­ta­gious bug that can be passed along by ingest­ing the stool of an infect­ed per­son, often through food or touch­ing a con­t­a­m­i­nat­ed sur­face. This is known as the “fecal-oral” route of dis­ease trans­mis­sion.

    Now there’s some sug­ges­tion in the emerg­ing lit­er­a­ture that Covid-19 could be passed through expo­sure to virus-laden feces, too.

    In this new paper from the Chi­nese Cen­ter for Dis­ease Con­trol and Pre­ven­tion, researchers man­aged to iso­late live virus from stool sam­ples of Covid-19 patients. And they’re not the first to find the virus in stool.

    As with norovirus, this means the dis­ease could be passed around when there’s less than opti­mal hygiene. “If true, it would not be sur­pris­ing,” Morse said. “A num­ber of oth­er coro­n­avirus are excret­ed from the intestines, and infec­tious virus can be found in stool.”

    That’s why the Chi­na CDC rec­om­mend­ed tak­ing mea­sures to stop the spread of the virus this way, includ­ing:

    main­tain­ing envi­ron­men­tal health and per­son­al hygiene; drink­ing boiled water, avoid­ing raw food con­sump­tion, and imple­ment­ing sep­a­rate meal sys­tems in epi­dem­ic areas; fre­quent­ly wash­ing hands and dis­in­fect­ing of sur­faces of objects in house­holds, toi­lets, pub­lic places, and trans­porta­tion vehi­cles; and dis­in­fect­ing the exc­re­ta and envi­ron­ment of patients in med­ical facil­i­ties to pre­vent water and food con­t­a­m­i­na­tion from patients’ stool sam­ples.

    But just because the virus is found in stool doesn’t mean that’s how it’s trans­mit­ting. And, again, more research is need­ed to fig­ure out how impor­tant the fecal-oral route is in the spread of this dis­ease.

    Air­borne trans­mis­sion: One more thing to watch out for

    Poop was also impli­cat­ed in the first SARS out­break, when a large hous­ing estate in Hong Kong called Amoy Gar­dens became ground zero of a pub­lic health night­mare. More than 300 peo­ple were infect­ed with the dis­ease through yet anoth­er viral trans­mis­sion route: air­borne trans­mis­sion of virus-rid­den feces aerosols.

    Air­borne spread hap­pens when the residue from evap­o­rat­ed, infect­ed droplets gets sus­pend­ed in the air and indi­rect­ly infects those who breathe it in. It’s dif­fer­ent from droplet trans­mis­sion, since droplets are too large to float through the air and need to get sprayed direct­ly on someone’s eye, nose, or mouth in order to infect them.

    In the case of Amoy Gar­dens, researchers learned SARS was capa­ble of going air­borne, spread­ing through the building’s faulty plumb­ing and ven­ti­la­tion sys­tems to the peo­ple who lived on the estate. “The infec­tions [were] offi­cial­ly attrib­uted to faulty toi­let traps which were thought to have aerosolized patients’ virus when the toi­let was flushed, allow­ing dis­per­sal of the virus to oth­er res­i­dents,” Morse explained. “This has been demon­strat­ed with SARS and MERS and oth­ers, and there­fore is plau­si­ble, although we cur­rent­ly lack good evi­dence.”

    So researchers and doc­tors are look­ing into whether the news SARS virus spreads this way — and tak­ing pre­cau­tions in case it can. Vito Iacoviel­lo, chief of the divi­sion of infec­tious dis­eases at Mount Auburn Hos­pi­tal in Cam­bridge, Mass­a­chu­setts, and an edi­tor at Dynamed, not­ed that the US Cen­ters for Dis­ease Con­trol and Pre­ven­tion is rec­om­mend­ing peo­ple admit­ted to hos­pi­tals with Covid-19 be put in an air­borne iso­la­tion room. “That’s the pre­cau­tion we use for TB, measles, and chick­en­pox,” he said, and it sug­gests health offi­cials are prepar­ing for the pos­si­bil­i­ty that this virus is capa­ble of air­borne spread.

    But again, for now, there’s no good evi­dence of Covid-19’s air­borne trans­mis­sion. It’s just anoth­er thing to watch out for as our under­stand­ing of this virus, and how it moves through pop­u­la­tions, evolves.

    ———-

    “How does the new coro­n­avirus spread? These new stud­ies offer clues.” by Julia Bel­luz; Vox; 02/21/2020

    It’s also pos­si­ble that trans­mis­sion ear­ly in the ill­ness or from asymp­to­matic peo­ple won’t end up being impor­tant con­trib­u­tors to the out­break, said Mar­i­on Koop­mans, who stud­ies emerg­ing infec­tious dis­eases and heads the depart­ment of virol­o­gy at the Eras­mus Med­ical Cen­ter in Rot­ter­dam, Nether­lands. In most parts of the world where trav­el­ers with Covid-19 turned up, she added, the spread of the dis­ease has been con­tained by only test­ing peo­ple with symp­toms. But, she added, “both of these state­ments can coex­ist: Asymp­to­matic shed­ders could spread the virus, but it prob­a­bly is not the main dri­ver of this epi­dem­ic.”

    The SARS-CoV­‑2 virus might be air­borne, but it’s not exclu­sive­ly air­borne. That’s all part of what makes this a com­pli­cat­ed prob­lem to diag­nose. Espe­cial­ly when researchers are find­ing that it’s pos­si­ble to spread SARS-CoV­‑2 in feces:

    ...
    Anoth­er way virus­es can spread is through poop. Think of the norovirus, the extreme­ly con­ta­gious bug that can be passed along by ingest­ing the stool of an infect­ed per­son, often through food or touch­ing a con­t­a­m­i­nat­ed sur­face. This is known as the “fecal-oral” route of dis­ease trans­mis­sion.

    Now there’s some sug­ges­tion in the emerg­ing lit­er­a­ture that Covid-19 could be passed through expo­sure to virus-laden feces, too.

    In this new paper from the Chi­nese Cen­ter for Dis­ease Con­trol and Pre­ven­tion, researchers man­aged to iso­late live virus from stool sam­ples of Covid-19 patients. And they’re not the first to find the virus in stool.

    ...

    But just because the virus is found in stool doesn’t mean that’s how it’s trans­mit­ting. And, again, more research is need­ed to fig­ure out how impor­tant the fecal-oral route is in the spread of this dis­ease.
    ...

    And if feces are indeed the pri­ma­ry route through which the dis­ease spreads, it does­n’t nec­es­sar­i­ly have to hap­pen from eat­ing con­t­a­m­i­nat­ed food or some oth­er means of ingest­ing the fecal mat­ter. Because as we learned from SARS, droplets of feces can be aerosolized from things like faulty toi­lets:

    ...
    Poop was also impli­cat­ed in the first SARS out­break, when a large hous­ing estate in Hong Kong called Amoy Gar­dens became ground zero of a pub­lic health night­mare. More than 300 peo­ple were infect­ed with the dis­ease through yet anoth­er viral trans­mis­sion route: air­borne trans­mis­sion of virus-rid­den feces aerosols.

    Air­borne spread hap­pens when the residue from evap­o­rat­ed, infect­ed droplets gets sus­pend­ed in the air and indi­rect­ly infects those who breathe it in. It’s dif­fer­ent from droplet trans­mis­sion, since droplets are too large to float through the air and need to get sprayed direct­ly on someone’s eye, nose, or mouth in order to infect them.

    In the case of Amoy Gar­dens, researchers learned SARS was capa­ble of going air­borne, spread­ing through the building’s faulty plumb­ing and ven­ti­la­tion sys­tems to the peo­ple who lived on the estate. “The infec­tions [were] offi­cial­ly attrib­uted to faulty toi­let traps which were thought to have aerosolized patients’ virus when the toi­let was flushed, allow­ing dis­per­sal of the virus to oth­er res­i­dents,” Morse explained. “This has been demon­strat­ed with SARS and MERS and oth­ers, and there­fore is plau­si­ble, although we cur­rent­ly lack good evi­dence.”
    ...

    But as the experts keep remind­ing us, we still don’t know if that’s how it’s being spread. All we know is it’s spread­ing at a high­er rate than SARS and MERS and even the sea­son­al flu.

    Still, the fact that SARS-CoV­‑2 is spread­ing faster than oth­er coro­n­avirus­es and has the unique abil­i­ty to man­i­fest in the upper res­pi­ra­to­ry tract for even asymp­to­matic indi­vid­u­als log­i­cal­ly makes that route of trans­mis­sion a like­ly fac­tor in this out­break. And that unique abil­i­ty for a coro­n­avirus is mak­ing it get­ting hard­er and hard­er to ignore the pos­si­bil­i­ty that this virus was cre­at­ed in a lab.

    Giv­en the right-wing media cam­paign to push the idea that the virus was devel­oped at a bio­log­i­cal research facil­i­ty in Wuhan and some­how escaped from there, it’s worth not­ing that Steve Ban­non had a biowar­fare expert on Epis­doe 14 of his “Pan­dem­ic: War Room” pod­cast on Feb­ru­ary 10th who appeared to strong­ly dis­miss the idea that the Wuhan biore­search facil­i­ty was a biowar­fare research lab where new virus­es are gen­er­ate. Guess who that biowar­fare expert was: Stephen Hat­fill. Yep. That Stephen Hat­fill. It turns out Hat­fill has been a reg­u­lar on Ban­non’s Pan­dem­ic pod­casts. But to be fair, he was far and away the voice of san­i­ty and cau­tion on Ban­non’s pod­cast, at least dur­ing that episode. You can hear the Hat­fill seg­ment start­ing around ~25 min­utes into the pod­cast. So accord­ing to Hat­fill, we real­ly should­n’t view that Wuhan research facil­i­ty as the kind of place where new virus­es are being devel­oped. He also empha­sized that these kinds of build­ings aren’t the type of place where a virus is going to be acci­den­tal­ly released because there are just too many back­up sys­tems (this is at ~29 min­utes into the pod­cast). So that’s an inter­est­ing take from Hat­fill.

    At the same time, we can’t for­get one of scari­est find­ings of that ini­tial research that made H5N1 air­borne in fer­rets by caus­ing the virus to infect the upper res­pi­ra­to­ry tract: It was super easy to do. They just need­ed to take the virus from an infect­ed fer­ret, man­u­al­ly pass it on to anoth­er fer­ret, and repeat these process. After about 10 fer­rets, the virus had mutat­ed to the point where it was infect­ing the upper res­pi­ra­to­ry tracts and could go air­borne. That was it. The peo­ple car­ry­ing this out would obvi­ous­ly be at risk if they did­n’t take pre­cau­tions but no super biowar­fare research lab was nec­es­sary to actu­al­ly dri­ve the muta­tions.

    So there’s quite a bit left to be learned about the ori­gin and nature of this virus. But there’s one thing we can be sure of: If some­one does indeed want to devel­op a killer super coro­n­avirus that real­ly could kill off a huge per­cent of the pop­u­lace they have a great head start with SARS-CoV­‑2 and its unique air­borne abil­i­ties.

    Posted by Pterrafractyl | February 21, 2020, 4:23 pm
  6. @Pterrafractyl–

    An inter­est­ing note: the mutat­ed bird flu virus that was adapt­ed to infect fer­rets and man­i­fest­ed air­borne trans­mis­sion between ani­mals was suc­cess­ful­ly treat­ed with oseltamivir, as not­ed in the linked arti­cle.

    That is one of the anti-virals that was includ­ed in the drug cock­tail that Thai doc­tors used to treat the coro­n­avirus.

    There has been no reportage on the Thai treat­ment by any major Amer­i­can media that I can see.

    Best,

    Dave

    Posted by Dave Emory | February 22, 2020, 5:35 pm
  7. The pan­ic is intend­ed. This is large­ly kay­fabe. You’re cor­rect about the psy-ops vs Chi­na and it also is — as you note — being used as a domes­tic psy-op as well.

    One thing worth not­ing that I haven’t yet seen in your cov­er­age (though I may have missed some­thing recent­ly) is the demo­graph­ics of the cur­rent fatal­i­ties, which are large­ly con­fined to the elder­ly.

    Source; https://www.worldometers.info/coronavirus/coronavirus-age-sex-demographics/

    Posted by The Crown & Thorn | February 28, 2020, 6:14 am
  8. oops. I see you did men­tion that briefly. it might be worth more of a spot­light in regard to the pre­sump­tive “salu­tary” effect that a lot of dead peo­ple at once would have on the enti­tle­ment rolls.....

    Posted by nevah mind | February 28, 2020, 6:17 am
  9. @ Crown & Thorn, Nevah Mind et al–

    This is def­i­nite­ly a “bio-psy-op” that will ful­fill many pieces of many agen­das.

    Note the delib­er­ate pan­ick­ing. You did­n’t hear this “Chick­en Lit­tle jour­nal­ism” (“The Sky Is Falling”) when the U.S. had its worst flue sea­son in 40 years in 2017–2018. 45 mil­lion infect­ed; 80,000 dead and that in a coun­try rough­ly one fifth the size of Chi­na.

    I have, indeed, not­ed in the pro­grams that the elder­ly, smok­ers and peo­ple with com­pro­mised immune sys­tems are the most severe­ly afflict­ed.

    Social Secu­ri­ty is NOT in a cri­sis, if one were to grant the peo­ple run­ning this coun­try any degree of san­i­ty.

    How­ev­er the U.S. is going full-on Nazi,and get­ting rid of the “Use­less Bread Gob­blers” will be music to the ears of the Pow­er Elite, who have nev­er accept­ed FDR’s New Deal, nor JFK’s Medicare (passed under LBJ.)

    Note how accept­ing peo­ple are of quar­an­tines and oth­er mass lim­i­ta­tions of human asso­ci­a­tion and assem­bly.

    Note, also, how cell phone track­ing is “help­ing” find out who might be exposed in South Korea, and else­where.

    It will be inter­est­ing to see if that hap­pens here.

    PLEASE do keep up with the cur­rent shows–7 record­ed to date on the Covid-19 out­break.

    The last two are avail­able as tem­po­rary audio files only.

    This has been in the mak­ing for quite some time, I sus­pect.

    I emphat­i­cal­ly rec­om­mend that you devote some time to get­ting the word out on a rel­a­tive­ly mun­dane ther­a­peu­tic reg­i­men devel­oped by doc­tors in Thai­land.

    http://spitfirelist.com/news/lions-and-tigers-and-bears-and-bat-coronaviruses-oh-my/

    There has been no cov­er­age of this in U.S. by major media. Instead we are hear­ing about Gilead­’s Ebo­la drug remde­sivir (spelling?) which did­n’t work well on Ebo­la.

    Robert Mer­cer is heav­i­ly invest­ed in Gilead.

    See what research all of you can do on equi­ties mar­ket players–individual and institutional–that have been “short­ing” rel­e­vant stocks and/or invest­ing in Gilead or oth­er Big Phar­ma enti­ties that stand to prof­it enor­mous­ly from this.

    Best,

    Dave

    Posted by Dave Emory | February 28, 2020, 2:23 pm
  10. It was always clear that hedge fund investor Bill Ack­man was­n’t the only investor who made a mas­sive for­tune from the extreme coro­n­avirus-induced mar­ket volatil­i­ty over the past month. The ques­tion was more a mat­ter of who man­aged to make these incred­i­ble returns as the mar­kets col­lapsed and whether or not there was rea­son to sus­pect they have have had insid­er knowledge/influence. So here’s an arti­cle that describes some of the oth­er investors who made a for­tune from the mar­ket col­lapse. One of those big win­ners includes Uni­ver­sa Invest­ments fund, which is advised by The Black Swan author Nas­sim Taleb and made a return of 3,612% in March alone. Yep, the fund run by the guy who lit­er­al­ly built his career on the idea that high­ly dis­rup­tive ‘Black Swan’ events should be expect­ed and fac­tored into your invest­ment mod­els made a for­tune when a real Black Swan event actu­al­ly hap­pened. It would be a sur­prise if Uni­ver­sa did­n’t make a ton of mon­ey.

    Also note that it does­n’t sound like Uni­ver­sa fund actu­al­ly grew by 36-fold in March. As we’ll see in the third arti­cle below, Uni­ver­sa spent around $100 mil­lion on the put options that end­ed up mak­ing the fund at least $3 bil­lion in March. The fund has around $4.3 bil­lion under man­age­ment. So the $100 mil­lion that made over $3 bil­lion was over 2% of the fund. Which is around what Uni­ver­sa has invest­ed on any giv­en day. Just 2–3%. So in March, that 2–3% of Uni­ver­sa’s $4.3 bil­lion in cap­i­tal was invest­ed in around $100 mil­lion in put options that returned 3,612% that month alone.

    Now, it’s impor­tant to keep in mind that a “tail-risk” fund like Uni­ver­sa is designed to keep mak­ing these kinds of bets and los­ing them over and over for years until the prover­bial ‘Black Swan’ event comes around and the fund recoups its loss­es on those extreme ‘out­side the mon­ey’ bets. Uni­ver­sa’s invest­ment strat­e­gy is pred­i­cat­ed on the assump­tion that big finan­cial shock events hap­pen with some degree of pre­dictabil­i­ty which makes reg­u­lar hedges against extreme events a good invest­ment even if they rou­tine­ly lose. Because when these bets win, they win very big. That’s what just hap­pened with Uni­ver­sa’s remark­able returns because that’s what was sup­posed to hap­pen.

    At least that’s what was sup­posed to hap­pen in the case of Uni­ver­sa. It was entire­ly expect­ed. But there’s still the open ques­tion of how many funds out made big unex­pect­ed bets against extreme mar­ket volatil­i­ty in the peri­od before the mar­ket col­lapse. That pre-March peri­od when the Trump admin­is­tra­tion dithered on the viral response as the same it received reports on the sever­i­ty of the virus and warn­ings that it could be an unusu­al­ly severe pub­lic health emer­gency. That’s a ques­tion that will nev­er be ful­ly answered. But as Uni­ver­sa and Bill Ack­man both made clear, peo­ple were indeed mak­ing vast for­tunes off of that his­toric finan­cial tumult. It was­n’t just Uni­ver­sa and Ack­man. Lots of peo­ple must have made huge returns in March. Were they peo­ple who might have been in a posi­tion to know there was a glob­al eco­nom­ic shut­down just around the cor­ner?

    Also recall how Ack­man’s Per­sh­ing Square Cap­i­tal made a near­ly 100-fold return on its $27 mil­lion mar­ket volatil­i­ty bet but those returns just bal­anced out the mas­sive loss­es else­where in the fund. Ack­man did­n’t make a huge for­tune so much as avoid­ed los­ing a huge for­tune. In the case of Uni­ver­sa’s 36-fold return in March, that was the net actu­al return of the fund’s invest­ments that month. Although just on a lit­tle over 2% of the fund’s cap­i­tal (around $100 mil­lion). As we’ll see, Uni­ver­sa only invests 2–3% of its cap­i­tal at any point in time, prob­a­bly because it needs to keep mak­ing these los­ing bets on low-risk/high pay­out events. Still, a 36-fold growth of 2% of cap­i­tal is a pret­ty good return for a sin­gle month. At the same time, March was the ‘Black Swan’ month the fund was set up to max­i­mal­ly prof­it from. So March was kind of an inevitabil­i­ty for Uni­ver­sa and a basic part of its busi­ness mod­el. Dooms­day or bust. But what about all the oth­er investors who don’t rou­tine­ly bet on ‘Black Swan’ event and just hap­pened to make those bets ear­ly this year and end up with huge net pos­i­tive returns? How many of those investors made mas­sive for­tunes last month and what kind of access to insid­er gov­ern­ment infor­ma­tion might they have had? It’s a fun new mul­ti-tril­lion dol­lar ques­tion that once again involves the already super-rich get­ting more super-rich­er:

    The Guardian

    Hedge funds ‘rak­ing in bil­lions’ dur­ing coro­n­avirus cri­sis

    Man­agers are pock­et­ing large sums while care work­ers can bare­ly scrape by, says TUC

    Rupert Neate Wealth cor­re­spon­dent and Jasper Jol­ly
    Thu 9 Apr 2020 14.05 EDT
    Last mod­i­fied on Fri 10 Apr 2020 03.24 EDT

    Hedge funds have been accused of rak­ing in bil­lions from mar­ket bets dur­ing the coro­n­avirus cri­sis while care work­ers in high-risk envi­ron­ments can bare­ly scrape by.

    Frances O’Grady, gen­er­al sec­re­tary of the TUC trade union body, launched a sting­ing attack on hedge fund man­agers on Thurs­day after it was revealed one Lon­don hedge fund had made £2.4bn bet­ting on mar­ket moves as investors pan­icked over a glob­al eco­nom­ic shut­down.

    News of the multi­bil­lion-pound wind­fall came as Crispin Odey, the Brex­it sup­port­er who made mil­lions bet­ting against the pound in the run up to the EU ref­er­en­dum, said his fund had made its biggest month­ly gain since the finan­cial cri­sis.

    ...

    Ruf­fer Invest­ment, which was found­ed by mul­ti­mil­lion­aire financier Jonathan Ruf­fer, told clients it had made $2.6bn (£2.4bn) dur­ing the coro­n­avirus pan­dem­ic-induced glob­al stock mar­ket col­lapse after a series of cheap “pro­tec­tive invest­ment” bets on mar­ket volatil­i­ty deliv­ered huge returns. The sto­ry was first report­ed by the Finan­cial Times.

    It also came to light that a US hedge fund made a 4,144% return bet­ting on a stock mar­ket col­lapse in the year to the end of March. The Mia­mi-based Uni­ver­sa Invest­ments fund, which is advised by The Black Swan author Nas­sim Taleb, made a return of 3,612% in March alone. “I think we’ve shown Universa’s method of risk mit­i­ga­tion to be the most effec­tive,” Mark Spitz­nagel, the fund’s pres­i­dent and chief invest­ment offi­cer, said in an investor let­ter seen by Bloomberg.

    Odey Asset Man­age­ment declined to com­ment on the TUC’s call for hedge fund own­ers to pay a “fair share” towards the fight against coro­n­avirus. The fund made a return of 21% in March.

    Odey, who has an esti­mat­ed £800m for­tune, pri­vate­ly told clients that the world was fac­ing a cri­sis as bad as the Great Depres­sion in the 1930s.

    In a let­ter to investors on Thurs­day and report­ed by Bloomberg, Odey said: “This is not like 2008–9, nor 2001–2, nor even 1989–92. The fall in glob­al gross nation­al prod­uct for this year will echo 1931–2. That was a ter­ri­ble time when coun­tries and insti­tu­tions dis­ap­peared and char­ac­ters like Adolf Hitler seized their chance to take over Ger­many.”

    ————-

    “Hedge funds ‘rak­ing in bil­lions’ dur­ing coro­n­avirus cri­sis” by Rupert Neate Wealth and Jasper Jol­ly; The Guardian; 04/09/2020

    It also came to light that a US hedge fund made a 4,144% return bet­ting on a stock mar­ket col­lapse in the year to the end of March. The Mia­mi-based Uni­ver­sa Invest­ments fund, which is advised by The Black Swan author Nas­sim Taleb, made a return of 3,612% in March alone. “I think we’ve shown Universa’s method of risk mit­i­ga­tion to be the most effec­tive,” Mark Spitz­nagel, the fund’s pres­i­dent and chief invest­ment offi­cer, said in an investor let­ter seen by Bloomberg.”

    A 4,144% return for 2020 and a 3,612% return for March alone. That’s how Black Swan funds per­form dur­ing a Black Swan event. But anti-dooms­day bets aren’t the only kinds of invest­ments made by Uni­ver­sa. The fund using its risk hedg­ing as a hedge for aggres­sive risk tak­ing. So it’s more like an alter­na­tive to asset diver­si­fi­ca­tion for bal­anc­ing an invest­ment port­fo­lio. Instead of buy­ing a diverse set of assets that will per­form dif­fer­ent­ly smooth things out, Uni­ver­sa takes out dooms­day pro­tec­tion in a vari­ety of forms and then uses that pro­tec­tion to make aggres­sive bets in those insured areas. A fund pred­i­cat­ed on the fun­da­men­tal bet that the ‘tails’ on tail-risk event prob­a­bil­i­ty dis­tri­b­u­tions aren’t as long as the rest of the mar­ket thinks lead­ing to rel­a­tive­ly cheap dooms­day insur­ance that can allow for aggres­sive long bets now with huge pay­outs when a dooms­day arrives:

    Bloomberg

    Nas­sim Taleb-Advised Uni­ver­sa Tail Fund Returned 3,600% in March

    * CIO says in let­ter fund locked in gains while keep­ing hedge
    * Uni­ver­sa warns cen­tral bank stim­u­lus may be ‘destruc­tive’

    By Erik Schatzk­er
    April 8, 2020, 10:28 AM CDT Updat­ed on April 8, 2020, 11:19 AM CDT

    A tail-risk hedge fund advised by Nas­sim Taleb, author of “The Black Swan,” returned 3,612% in March, pay­ing off mas­sive­ly for clients who invest­ed in it as pro­tec­tion against a plunge in stock prices.

    The fund, man­aged by Uni­ver­sa Invest­ments of Mia­mi, had a year-to-date return of 4,144% through the end of last month, accord­ing to an investor let­ter from Pres­i­dent and Chief Invest­ment Offi­cer Mark Spitz­nagel that was obtained by Bloomberg. He said Uni­ver­sa was able to cash in many of its posi­tions, lock­ing in the gains, while also keep­ing in place pro­tec­tion against more equi­ty sell-offs, “one of the tricks of the trade.”

    “Look­ing ahead, the world remains very much trapped in the moth­er of all glob­al finan­cial bub­bles,” Spitz­nagel, 49, wrote. “It’s the sys­temic vul­ner­a­bil­i­ties cre­at­ed by this unprece­dent­ed cen­tral-bank-fueled bub­ble, and the crazy, naive risk-tak­ing and lever­age that accom­pa­nies it, that makes this pan­dem­ic so poten­tial­ly destruc­tive to the finan­cial mar­kets and the econ­o­my.”

    Tail-risk hedg­ing isn’t an invest­ment strat­e­gy in itself. Instead, Uni­ver­sa tells clients to think of it as cat­a­stro­phe insur­ance that allows them to pur­sue returns more aggres­sive­ly, with­out the need for more tra­di­tion­al approach­es to risk mit­i­ga­tion such as diver­si­fy­ing assets and hold­ing Trea­suries, gold or hedge funds.

    Taleb, in a March 30 inter­view on Bloomberg Tele­vi­sion, said a pan­dem­ic like the coro­n­avirus out­break was pre­dictable and investors who weren’t hedged paid the price with steep loss­es. What’s impos­si­ble to pre­dict is the tim­ing of such an event, he said, which is why insur­ance must be in place at all times.

    “I think we’ve shown Universa’s method of risk mit­i­ga­tion to be the most effec­tive,” Spitz­nagel said through an out­side spokesman. “But it is also very uncon­ven­tion­al. Most peo­ple tend to pre­fer the con­ven­tion­al over the effec­tive.”

    Spitz­nagel includ­ed a chart in his let­ter show­ing that a port­fo­lio invest­ed 96.7% in the S&P 500 and 3.3% in Universa’s fund would have been unscathed in March, a month in which the U.S. equi­ty bench­mark fell 12.4%. The same port­fo­lio would have pro­duced a com­pound­ed return of 11.5% a year since March of 2008 ver­sus 7.9% for the index.

    ...

    ———–

    “Nas­sim Taleb-Advised Uni­ver­sa Tail Fund Returned 3,600% in March” by Erik Schatzk­er; Bloomberg; 04/08/2020

    “Tail-risk hedg­ing isn’t an invest­ment strat­e­gy in itself. Instead, Uni­ver­sa tells clients to think of it as cat­a­stro­phe insur­ance that allows them to pur­sue returns more aggres­sive­ly, with­out the need for more tra­di­tion­al approach­es to risk mit­i­ga­tion such as diver­si­fy­ing assets and hold­ing Trea­suries, gold or hedge funds.”

    Buy dooms­day insur­ance and make big counter-bets. That’s how the Uni­ver­sa describes itself to clients. We can’t pre­dict when the Black Swan events will hap­pen. We just know they’ll hap­pen and that’s why bet­ting on them at all times is required:

    ...
    Taleb, in a March 30 inter­view on Bloomberg Tele­vi­sion, said a pan­dem­ic like the coro­n­avirus out­break was pre­dictable and investors who weren’t hedged paid the price with steep loss­es. What’s impos­si­ble to pre­dict is the tim­ing of such an event, he said, which is why insur­ance must be in place at all times.

    “I think we’ve shown Universa’s method of risk mit­i­ga­tion to be the most effec­tive,” Spitz­nagel said through an out­side spokesman. “But it is also very uncon­ven­tion­al. Most peo­ple tend to pre­fer the con­ven­tion­al over the effec­tive.”
    ...

    And based on the fol­low­ing Forbes piece about Uni­ver­sa’s Chief Invest­ment Offi­cer Mark Spitz­nagel, it was $100 mil­lion in put options that yield­ed over $3 bil­lion in returns that month. That was where the giant returns came from. $100 mil­lion in dooms­day bets which cor­re­sponds to a lit­tle over 2% of the funds $4.3 bil­lion in cap­i­tal. As the arti­cle notes, the fund typ­i­cal­ly has a lit­tle as 2 to 3% of its cap­i­tal wagered at any point in time. So it sounds like almost all of the 2–3% dai­ly cap­i­tal Uni­ver­sa was bet­ting with in March was bet­ting on those dooms­day bets:

    Forbes

    How A Goat Farmer Built A Dooms­day Machine That Just Booked A 4,144% Return

    Antoine Gara
    Bank­ing & Insur­ance
    Apr 13, 2020,06:30am EDT

    It’s ear­ly April and from his farm perched atop a hill on the edge of Lake Michi­gan, hedge fund investor Mark Spitz­nagel is dodg­ing the coro­n­avirus in a set­ting rem­i­nis­cent of a Winslow Homer painting–and rel­ish­ing one of Wall Street’s great­est invest­ing coups.

    Spitznagel’s Idyll Farms on Michigan’s Grand Tra­verse Bay will soon be home to 400 new­born alpine goats that will graze on 200 acres of rolling pas­ture, fat­ten­ing up to pro­duce cheese that will be fla­vored with herbs and hon­ey. “We are as ver­ti­cal­ly-inte­grat­ed as we can pos­si­bly be,” says Spitz­nagel of the nat­u­ral­ly replen­ish­ing abode. When he’s not herd­ing goats, Spitz­nagel, 49, plays in the wildest cor­ners of finan­cial mar­kets, where he’s an expert in trades that car­ry decep­tive risks.

    Spitznagel’s $4.3 bil­lion (assets) firm Uni­ver­sa Invest­ments and his team of about a dozen PhD’s, math­e­mati­cians and trad­ing experts earn their mon­ey by mak­ing trades that near­ly always lose small sums–but very rarely gen­er­ate astro­nom­i­cal pay­outs. Uni­ver­sa buys short-term options con­tracts that pro­tect against a spike in volatil­i­ty, or a plunge in mar­kets, which are high­ly “con­vex” and “out-of-the mon­ey.” In plain Eng­lish that means it would take a sud­den, major crash for the trades to pay off. Every trad­ing day, investors around the world make a lit­tle easy mon­ey by sell­ing Spitz­nagel options.

    Until one day–maybe only every five or ten years–a black swan appears, ter­ror­ists ram jets into sky­scrap­ers or a glob­al pan­dem­ic freezes the glob­al econ­o­my. Then the tables turn hard and Spitz­nagel makes an enor­mous amount of mon­ey, more than enough to make up for all those many days of small loss­es. And those caught feed­ing on Spitznagel’s bait find them­selves trapped in a trade that car­ries almost unfath­omable loss­es. Some­times they’re wiped out entire­ly.

    Take March, a month in which the S&P 500 Index cratered near­ly 30% at its lows, shed­ding tril­lions in mar­ket val­ue. Spitz­nagel had bought puts—or the right to sell the index at a spec­i­fied price—well below the pre­vail­ing mar­ket price, and the firm had its best month ever.

    Universa’s flag­ship “Black Swan Pro­tec­tion Pro­to­col” fund earned its near two dozen insti­tu­tion­al investors a stag­ger­ing 3,612% in March, putting its 2020 gains at 4,144%. From his remote farm, on April 7, Spitz­nagel fires off an update to his investors that is soon read world­wide. “These returns like­ly sur­pass any oth­er invest­ment that you can think of over the peri­od you have been invest­ed with us,” he crowed. “Kudos to you for such a sound “tac­ti­cal” allo­ca­tion to Uni­ver­sa.”

    Spitz­nagel has built a career feast­ing on traders’ greed—prioritizing quick gains over pru­dent risk tak­ing. To earn these easy gains, traders read­i­ly assume “tail risks” or huge but extreme­ly remote poten­tial loss­es. Even­tu­al­ly, some­one gets caught. When a finan­cial pan­ic, or an unex­pect­ed event like the coro­n­avirus sur­faces, Spitznagel’s firm con­verts from what once looked like a char­i­ty into a finan­cial pow­er­house that’s ful­ly stocked with valu­able hedges. Then Spitz­nagel caters to traders’ new imme­di­ate demand, which is fear.

    “We exploit prop­er­ties in mar­kets that take years and years, and even decades, to show them­selves,” he says. At the piv­otal moment of cri­sis, his trades, which cost almost noth­ing to put on dur­ing good times, can be sold at almost infi­nite prices. “Liq­uid­i­ty is real­ly about the price for imme­di­a­cy and we are cap­tur­ing that on both sides of our trade,” Spitz­nagel phi­los­o­phizes.

    In the case of March, Forbes esti­mates that Spitznagel’s pro­tec­tion trades cost under $100 mil­lion to put on and yield­ed at least $3 bil­lion for Universa’s clients, which could be plowed into cra­ter­ing mar­kets, or stored under a mat­tress. The fine print of Universa’s pub­lic fil­ings shows it pro­tects port­fo­lios worth $4.3 bil­lion, but on any giv­en day its actu­al cap­i­tal at work is as lit­tle as 2%-or‑3% of that fig­ure. It’s why no new “tril­lion­aires” were mint­ed in March.

    Universa’s 4,144% pay­out cost its investors about 1% annu­al­ly due to Universa’s hefty “2 and 20” hedge fund fees, per Forbes analy­sis of pub­lic fil­ings. After the March pay­day, its flag­ship Black Swan fund has pro­duced a mean annu­al return on invest­ed cap­i­tal of 76%* since the firm was cre­at­ed in 2008. It’s a good result, but if you were going to make the same cal­cu­la­tion as of Dec. 31 2019, the long-term com­pound­ed return would only be mar­gin­al­ly bet­ter than that of the S&P 500 over the same time peri­od. More­over, the “forces of good” in the mar­ket, like the Fed­er­al Reserve Bank, are now try­ing to foil Spitznagel’s bread-and-but­ter trade.

    Raised in North­port, Michi­gan where his father was a protes­tant min­is­ter, Spitznagel’s big break came as a 16-year old when he vis­it­ed the Chica­go Board of Trade to meet a fam­i­ly friend named Everett Klipp, who ran a futures trad­ing firm. He was mes­mer­ized by the “unmis­tak­able, intri­cate com­mu­ni­ca­tion and syn­chro­nism” of mar­kets and began to obsess over grain prices and crop reports as a clerk for Klipp dur­ing sum­mers away from school.

    Klipp forged in the impres­sion­able Spitz­nagel the virtues of book­ing small loss­es. “I used to come to Everett with stacks of research on corn crops. He’d laugh at me and say it was all crap,” Spitz­nagel remem­bers, “All that mat­ters is you’ve got to take your small loss­es.” Watch­ing a steady stream of traders get wiped out by mar­gin calls—like in the final scene of the 1980s clas­sic film Trad­ing Places—only rein­forced the point.

    At 22, after grad­u­at­ing from Michigan’s Kala­ma­zoo Col­lege in 1993, Spitz­nagel bought a seat at the CBOT and trad­ed trea­sury bond futures and euro-dol­lar futures. The chaot­ic, unruly venue was the front­lines of open out­cry cap­i­tal­ism and a delight to the lib­er­tar­i­an lean­ing Spitz­nagel. To this day, he works in an office with his pit trad­ing out­fit, a “blood­stained” aqua-blue jack­et and an Adam Smith neck­tie, framed on the wall.

    ...

    He then moved to the trad­ing arm of a Japan­ese bank just in time to wit­ness the 1997 Asian finan­cial cri­sis and the default of Rus­sia, which caused the Nobel lau­re­ate backed hedge fund, Long Term Cap­i­tal Man­age­ment, to lose $4.6 bil­lion and col­lapse. This con­vinced Spitz­nagel to hone an invest­ing style that would prof­it from pan­ics. In 1999, Spitz­nagel matric­u­lat­ed to NYU’s Courant Insti­tute for math­e­mat­i­cal sci­ences, study­ing under “Black Swan” the­o­rist Nas­sim Taleb. That year, they launched a hedge fund called Empir­i­ca, which aimed to prof­it from unex­pect­ed “fat tail” finan­cial events. The fund was dis­band­ed in 2005, and after a two-year stint at Mor­gan Stan­ley, Spitz­nagel cre­at­ed Uni­ver­sa months before the 2008 finan­cial cri­sis.

    Uni­ver­sa returned 115% in 2008 and Spitz­nagel used pro­ceeds from his coup to buy a Bel-Air man­sion from singer Jen­nifer Lopez a block from the home of his hero Ronald Rea­gan. Five years lat­er, Spitz­nagel pub­lished The Dao of Cap­i­tal, a dense 368-page lib­er­tar­i­an eco­nom­ic trea­tise that lam­bast­ed cen­tral banks for the cri­sis. Unlike most bears who try to time bub­bles, Spitznagel’s play­book is dif­fer­ent. No mat­ter the cir­cum­stance, he’s always giv­ing away free pen­nies to the mar­ket in order to main­tain an arse­nal of bear­ish bets that could be worth thou­sands of times their cost if mar­kets go hay­wire.

    Despite his grouchy demeanor—“When peo­ple think that mar­kets are cheap right now, they are just kid­ding them­selves. I mean absolute­ly kid­ding themselves!”—Spitznagel’s math­e­mat­i­cal view of the world is in some ways sim­i­lar to capitalism’s ulti­mate opti­mist, War­ren Buf­fett. His sell­ing of imme­di­ate grat­i­fi­ca­tion for a mas­sive pay­day far down the road, after all, is engi­neered to con­jure cash and prof­it, in crash­es. In an inverse way, this is not unlike how Buf­fett accu­mu­lates cash from small insur­ance pre­mi­ums over long peri­ods, build­ing dry pow­der, that he then uses to pounce on bar­gain buys. Spitz­nagel calls his trad­ing mouse­trap a “thing-a-ma-jig­ger” har­poon, based on the Dr. Seuss clas­sic McElligot’s Pool, where­as Buf­fett is famous for aim­ing his “ele­phant guns” when deals abound. He’s also a pros­e­ly­tiz­er of com­pound returns: “The big loss­es are essen­tial­ly ALL that mat­ter to your rate of com­pound­ing,” says Spitz­nagel.

    Besides 2008, Universa’s dooms­day machine kicked in dur­ing the 2011 cri­sis cre­at­ed by the down­grade of the U.S. government’s debt, and the August 2015 crash of the Chi­nese mar­ket. Like­wise dur­ing the down­turn of late 2017 and ear­ly 2018, Uni­ver­sa took advan­tage of the so-called “vol­maged­dons” or surg­ing volatil­i­ty that caused the mar­ket drop. Now comes the moth­er of all black swans, the coro­n­avirus pan­dem­ic of 2020, which has seen stock mar­kets plum­met glob­al­ly in a mat­ter of weeks.

    As the major­i­ty own­er of Uni­ver­sa, Forbes esti­mates Spitznagel’s net worth is now $250 mil­lion, and more than a few in the media and on Wall Street have tak­en notice. Will Spitznagel’s lucra­tive “moat” get arbi­traged away? “It should,” he says, “But do I lose any sleep over it? Not a minute... There’s such a herd men­tal­i­ty in finance.”

    Spitz­nagel is also uncon­cerned about the Fed’s save-the-mar­ket-and-econ­o­my at all costs approach, giv­en that it has already pumped $6 tril­lion of dol­lars into a host of dif­fer­ent secu­ri­ties mar­kets.

    Says Spitz­nagel with the cocky assured­ness of pok­er pro,“There is a lim­it to sov­er­eign debt and there is a lim­it to cen­tral bank bal­ance sheets... When I thank the cen­tral bankers of the world for my busi­ness, I’m not kid­ding.”

    ———–

    “How A Goat Farmer Built A Dooms­day Machine That Just Booked A 4,144% Return” by Antoine Gara; Forbes; 04/13/2020

    Spitznagel’s $4.3 bil­lion (assets) firm Uni­ver­sa Invest­ments and his team of about a dozen PhD’s, math­e­mati­cians and trad­ing experts earn their mon­ey by mak­ing trades that near­ly always lose small sums–but very rarely gen­er­ate astro­nom­i­cal pay­outs. Uni­ver­sa buys short-term options con­tracts that pro­tect against a spike in volatil­i­ty, or a plunge in mar­kets, which are high­ly “con­vex” and “out-of-the mon­ey.” In plain Eng­lish that means it would take a sud­den, major crash for the trades to pay off. Every trad­ing day, investors around the world make a lit­tle easy mon­ey by sell­ing Spitz­nagel options.”

    A $4.3 bil­lion dooms­day fund. But it only gam­bles with a tiny frac­tion of that mon­ey at any point. As lit­tle as 2–3%, which cor­re­sponds to the ~$100 mil­lion in dooms­day options that were sud­den­ly worth $3 bil­lion in March:

    ...
    Until one day–maybe only every five or ten years–a black swan appears, ter­ror­ists ram jets into sky­scrap­ers or a glob­al pan­dem­ic freezes the glob­al econ­o­my. Then the tables turn hard and Spitz­nagel makes an enor­mous amount of mon­ey, more than enough to make up for all those many days of small loss­es. And those caught feed­ing on Spitznagel’s bait find them­selves trapped in a trade that car­ries almost unfath­omable loss­es. Some­times they’re wiped out entire­ly.

    Take March, a month in which the S&P 500 Index cratered near­ly 30% at its lows, shed­ding tril­lions in mar­ket val­ue. Spitz­nagel had bought puts—or the right to sell the index at a spec­i­fied price—well below the pre­vail­ing mar­ket price, and the firm had its best month ever.

    Universa’s flag­ship “Black Swan Pro­tec­tion Pro­to­col” fund earned its near two dozen insti­tu­tion­al investors a stag­ger­ing 3,612% in March, putting its 2020 gains at 4,144%. From his remote farm, on April 7, Spitz­nagel fires off an update to his investors that is soon read world­wide. “These returns like­ly sur­pass any oth­er invest­ment that you can think of over the peri­od you have been invest­ed with us,” he crowed. “Kudos to you for such a sound “tac­ti­cal” allo­ca­tion to Uni­ver­sa.”

    Spitz­nagel has built a career feast­ing on traders’ greed—prioritizing quick gains over pru­dent risk tak­ing. To earn these easy gains, traders read­i­ly assume “tail risks” or huge but extreme­ly remote poten­tial loss­es. Even­tu­al­ly, some­one gets caught. When a finan­cial pan­ic, or an unex­pect­ed event like the coro­n­avirus sur­faces, Spitznagel’s firm con­verts from what once looked like a char­i­ty into a finan­cial pow­er­house that’s ful­ly stocked with valu­able hedges. Then Spitz­nagel caters to traders’ new imme­di­ate demand, which is fear.

    “We exploit prop­er­ties in mar­kets that take years and years, and even decades, to show them­selves,” he says. At the piv­otal moment of cri­sis, his trades, which cost almost noth­ing to put on dur­ing good times, can be sold at almost infi­nite prices. “Liq­uid­i­ty is real­ly about the price for imme­di­a­cy and we are cap­tur­ing that on both sides of our trade,” Spitz­nagel phi­los­o­phizes.

    In the case of March, Forbes esti­mates that Spitznagel’s pro­tec­tion trades cost under $100 mil­lion to put on and yield­ed at least $3 bil­lion for Universa’s clients, which could be plowed into cra­ter­ing mar­kets, or stored under a mat­tress. The fine print of Universa’s pub­lic fil­ings shows it pro­tects port­fo­lios worth $4.3 bil­lion, but on any giv­en day its actu­al cap­i­tal at work is as lit­tle as 2%-or‑3% of that fig­ure. It’s why no new “tril­lion­aires” were mint­ed in March.
    ...

    But as the arti­cle notes, even with the enor­mous returns of 2020, Uni­ver­sa’s annu­al­ized returns going back to 2008 are still only at 76%, which has only been mar­gin­al­ly bet­ter than the S&P over that same peri­od. It’s a reminder that this strat­e­gy of always bet­ting on dooms­day events looks real­ly good in the mid­dle of a dooms­day sce­nario but isn’t going to per­form that well dur­ing a Black Swan dry spell. And if lots of oth­er investors decide to jump into this form of invest­ing it’s pos­si­ble the prof­itabil­i­ty of the strat­e­gy will just get arbi­traged away:

    ...
    Universa’s 4,144% pay­out cost its investors about 1% annu­al­ly due to Universa’s hefty “2 and 20” hedge fund fees, per Forbes analy­sis of pub­lic fil­ings. After the March pay­day, its flag­ship Black Swan fund has pro­duced a mean annu­al return on invest­ed cap­i­tal of 76%* since the firm was cre­at­ed in 2008. It’s a good result, but if you were going to make the same cal­cu­la­tion as of Dec. 31 2019, the long-term com­pound­ed return would only be mar­gin­al­ly bet­ter than that of the S&P 500 over the same time peri­od. More­over, the “forces of good” in the mar­ket, like the Fed­er­al Reserve Bank, are now try­ing to foil Spitznagel’s bread-and-but­ter trade.

    ...

    Besides 2008, Universa’s dooms­day machine kicked in dur­ing the 2011 cri­sis cre­at­ed by the down­grade of the U.S. government’s debt, and the August 2015 crash of the Chi­nese mar­ket. Like­wise dur­ing the down­turn of late 2017 and ear­ly 2018, Uni­ver­sa took advan­tage of the so-called “vol­maged­dons” or surg­ing volatil­i­ty that caused the mar­ket drop. Now comes the moth­er of all black swans, the coro­n­avirus pan­dem­ic of 2020, which has seen stock mar­kets plum­met glob­al­ly in a mat­ter of weeks.

    As the major­i­ty own­er of Uni­ver­sa, Forbes esti­mates Spitznagel’s net worth is now $250 mil­lion, and more than a few in the media and on Wall Street have tak­en notice. Will Spitznagel’s lucra­tive “moat” get arbi­traged away? “It should,” he says, “But do I lose any sleep over it? Not a minute... There’s such a herd men­tal­i­ty in finance.”
    ...

    So while Uni­ver­sa is try­ing to estab­lish that you can make a win­ning invest­ment strat­e­gy by also mak­ing small bets on dooms­day sce­nar­ios, tim­ing still mat­ters if you want to make a super mas­sive for­tune. If Uni­ver­sa had 95% of its cap­i­tal invest­ed in dooms­day puts instead of 3% they would have a lot more mon­ey right now.

    And that, again, returns us to the ques­tion of who made the biggest of these hyper-prof­itable bets last months. Who got the luck­i­est? Was it luck or ‘luck’? It’s the kind of ques­tion that would be inter­est­ing under a ‘nor­mal’ dooms­day cir­cum­stance. But we’re liv­ing in a world run by the far right. Almost every major leader around the globe is some sort of far right nut job run­ning a gov­ern­ment of pirates. Lead­ers who spe­cial­ize in cre­at­ing and exploit­ing polit­i­cal doom now run the place. Prof­it­ing from a cri­sis isn’t exact­ly seen as unseem­ly by today’s elites. And that’s why these ques­tions about who made the biggest overnight for­tunes are such grim­ly rel­e­vant ques­tions. It’s impor­tant to know if the major finan­cial investors in dooms­day sce­nar­ios hap­pen to have ties to the major investors in polit­i­cal doom. That’s the kind of invest­ment strat­e­gy the pub­lic needs to be very care­ful to guard against, espe­cial­ly with the far right in charge of every­thing glob­al­ly, and unfor­tu­nate­ly we can’t just buy a bunch of put options to defend against it. Some sort of anti-far right put options would be pret­ty nice right now. And always.

    Posted by Pterrafractyl | April 14, 2020, 5:23 pm
  11. Well, some­one made a ton of mon­ey. That’s one of the things we can con­clu­sive­ly deter­mine fol­low­ing the his­toric col­lapse in the price of a bar­rel of oil on Mon­day down from $18/barrel to near­ly neg­a­tive $40/barrel. Yes, for a brief moment peo­ple were lit­er­al­ly being paid $40 to take a bar­rel of oil and this was­n’t due to some tech­ni­cal glitch. Peo­ple real­ly were pay­ing oth­er peo­ple to their their oil.

    So after all the sto­ries about traders mak­ing extreme prof­its from deeply ‘out of the mon­ey’ hedges on the finan­cial mar­kets — like Nas­sim Tale­b’s Uni­ver­sa ‘Black Swan’ fund — we have to ask the ques­tion: did any­one make an utter­ly obscene prof­it from this his­to­ry price swing in oil? Who were they lucky indi­vid­u­als and what are the odds that that made their prof­itable bets with­out insid­er infor­ma­tion? Did any­one have futures con­tracts that bet oil was going to drop below zero? If so, what where the returns on those con­tracts?

    Inter­est­ing­ly, as we’re going to see when we look at how this extreme price swing took place at all, part of what makes this extreme price event so unusu­al­ly is the event that cre­at­ed the extreme volatil­i­ty was ful­ly fore­see­able. That would be the spe­cial day April 20 rep­re­sent­ed for the crude oil mar­kets: the day the hold­ers of oil futures con­tracts must take phys­i­cal deliv­ery of deliv­ery of their oil. It was the col­lapse in avail­able oil stor­age space that made it sud­den­ly impos­si­ble for large num­bers of hold­ers of oil futures con­tracts to receive the oil they were con­trac­tu­al­ly oblig­ed to receive. That’s what led to the sud­den price col­lapse. Peo­ple need­ed space to receive their oil that was no longer for rent and that led to a sit­u­a­tion where peo­ple were lit­er­al­ly pay­ing oth­er peo­ple with remain­ing $40/barrel to take their oil:

    The Finan­cial Times

    Explain­er: What neg­a­tive US oil prices mean for the indus­try
    Monday’s price crash in West Texas Inter­me­di­ate crude is a nasty sign of a deeply dis­lo­cat­ed mar­ket

    Derek Brow­er, David Shep­pard and Anjli Raval in Lon­don and Gre­go­ry Mey­er in New York
    April 20, 2020, 11:00 pm

    Bench­mark US crude oil prices trad­ed with neg­a­tive prices for the first time in his­to­ry on Mon­day, send­ing shock­waves through the glob­al ener­gy sec­tor.

    But what are neg­a­tive prices and what do they mean for the wider indus­try?

    What hap­pened?

    US oil prices trad­ed below zero for the first time ever, mean­ing pro­duc­ers or traders were essen­tial­ly pay­ing oth­er mar­ket par­tic­i­pants to take the oil off their hands.

    It is the clear­est sign yet that the coro­n­avirus pan­dem­ic, which has cut oil demand by up to a third world­wide, has turned the US oil mar­ket on its head.

    The price crash came as the US bench­mark oil con­tract, known as West Texas Inter­me­di­ate, head­ed towards its expiry date for May deliv­ery, the month where the demand hit from lock­downs and trav­el restric­tions is expect­ed to peak.

    Each month WTI future con­tracts, which trade on CME Group’s New York Mer­can­tile Exchange, need to be set­tled with phys­i­cal deliv­ery of crude oil, giv­ing a real-world link to one of the world’s most heav­i­ly trad­ed deriv­a­tives.

    Nor­mal­ly this hap­pens each month with­out inci­dent or dra­ma. But Mon­day was dif­fer­ent. Ana­lysts believe a lack of avail­able stor­age capac­i­ty at the WTI contract’s deliv­ery point of Cush­ing, Okla­homa — known as the Pipeline Cross­roads of the World — set off pan­ic among traders still hold­ing deriv­a­tive con­tracts, who found them­selves with nowhere to put the oil.

    WTI opened for trad­ing on Sun­day night at $18 a bar­rel. By the end of the day it had dropped to as low as -$40 a bar­rel.

    “With ade­quate stor­age in Cush­ing unavail­able to those who need it, sell­ing inten­si­fied,” said Ann-Louise Hit­tle at con­sul­tan­cy Wood Macken­zie.

    “This issue is most intense for May WTI because oil demand is at its weak­est, with full coro­n­avirus con­tain­ment mea­sures in place across much of the US. Stor­age at the Okla­homa facil­i­ty is expect­ed to be full with­in weeks.”

    As of April 10, Cushing’s tanks housed 55m bar­rels of crude, or 72 per cent of work­ing stor­age capac­i­ty of 76.1m bar­rels, accord­ing to the Ener­gy Infor­ma­tion Admin­is­tra­tion. The remain­ing capac­i­ty was not nec­es­sar­i­ly avail­able to those who had not already leased it.

    CME Group said its mar­ket was func­tion­ing, adding that the neg­a­tive price sug­gest­ed that spot and futures prices were con­verg­ing as designed.

    “Today’s neg­a­tive set­tle­ment price in the May WTI futures con­tract reflects both the glob­al over­sup­ply of crude oil and high lev­els of stor­age util­i­sa­tion in the Unit­ed States,” the exchange oper­a­tor said late on Mon­day.

    Traders with long-term leas­es were prob­a­bly able to score huge prof­its. WTI con­tracts for deliv­ery in June are still trad­ing above $20 a bar­rel, even though they have fall­en from near $60 at the start of the year. Get paid $30-$40 a bar­rel to take the oil, then sell it for­ward in the futures mar­ket for $20 a bar­rel.

    What will it do to the sec­tor?

    Sev­er­al casu­al­ties will be vis­i­ble as the dust set­tles on Monday’s unprece­dent­ed price rout. They range from traders left hold­ing con­tracts that lost almost $60 a bar­rel in a sin­gle day, to US indus­try exec­u­tives who only a few days ago were hail­ing an Opec deal that was sup­posed to put a floor under the oil price. That floor was oblit­er­at­ed on Mon­day.

    One day’s trad­ing of a con­tract on the eve of expiry will not on its own cause sig­nif­i­cant dam­age to the US ener­gy sec­tor — but sub-zero prices will tar­nish the commodity’s brand as a safe invest­ment, espe­cial­ly among retail investors that piled into oil con­tracts in recent weeks.

    But the biggest wor­ry for the sec­tor is the colos­sal imbal­ance in US sup­ply and demand that under­lies Monday’s flash crash. As the coro­n­avirus lock­downs spread and unem­ploy­ment ris­es, the US is now on its own pro­duc­ing 2m b/d more than its slow­ing refiner­ies need, and lacks avail­able stor­age to han­dle the excess, say ana­lysts. Con­sump­tion has to leap high­er, oil­fields need to be shut soon­er or new unknown stor­age capac­i­ty needs to be found faster.

    Until the imbal­ance is fixed, prices will remain low and volatile, crip­pling the sec­tor and forc­ing wide­spread dis­tress on pro­duc­ers. The May contract’s capit­u­la­tion is a nasty sign of a deeply dis­lo­cat­ed mar­ket.

    How will the main play­ers react?

    Sub-zero oil prices are an embar­rass­ment for Sau­di Ara­bia and Rus­sia, which just over a week ago agreed the biggest co-ordi­nat­ed sup­ply cuts ever — and Pres­i­dent Don­ald Trump, who pushed them to seal the deal.

    Their pow­er­less­ness in the face of the demand col­lapse was plain­ly vis­i­ble in Monday’s capit­u­la­tion. Despite Opec del­e­gates feed­ing rumours of deep­er and swifter cuts and more talks among pro­duc­er nations led by Sau­di Ara­bia and Rus­sia, they are unlike­ly to help.

    Even a dou­bling of the Opec sup­ply reduc­tions, due to start in May, would do noth­ing to add stor­age capac­i­ty in Cush­ing now.

    It is an embar­rass­ment for Mr Trump, who set out to pro­tect the US shale sec­tor after being exten­sive­ly lob­bied by indus­try exec­u­tives in recent weeks. After an agree­ment was reached between glob­al pro­duc­ers he called it “a great deal for all”.

    The fed­er­al gov­ern­ment has some mea­sures it might now pur­sue, includ­ing urg­ing deep­er cuts from Opec; tar­iffs on for­eign oil imports; free­ing up more stor­age capac­i­ty, includ­ing in the Strate­gic Petro­le­um Reserve (SPR); pay­ing pro­duc­ers to keep oil in the ground; or extend­ing finan­cial sup­port to oil com­pa­nies. All have been dis­cussed at var­i­ous lev­els of the US gov­ern­ment.

    Mr Trump reit­er­at­ed on Mon­day evening that he was look­ing at putting as much as 75m bar­rels of US oil in the country’s SPR, fill­ing the emer­gency stock­pile to the brim, but he has strug­gled to win fund­ing from the US Con­gress.

    In Texas, the price col­lapse may alter a recent debate in favour of a pro­pos­al to man­date pro­duc­tion cur­tail­ments on com­pa­nies oper­at­ing in the state. A hear­ing on this idea was held last week and the Texas Rail­road Com­mis­sion will rule on Tues­day. “We now see an emer­gency pro-rationing mea­sure as a viable out­come,” said ana­lysts at Clearview Ener­gy Part­ners in Wash­ing­ton.

    Is this the bot­tom?

    The May WTI con­tract was expect­ed to suf­fer, as demand takes the biggest hit from lock­down mea­sures in force across the US and coin­cides with a flood of sup­ply and stor­age tanks at Cush­ing set to fill up. But the com­ing weeks will see swaths of the coun­try still under trav­el restric­tions.

    Domes­tic pro­duc­tion is even­tu­al­ly expect­ed to fall sharply, pos­si­bly by more than 10 per cent, but it may not hap­pen soon enough as pro­duc­ers endure a war of attri­tion. The June con­tract, which fell 15 per cent on Mon­day but clung on above $20 a bar­rel, is unlike­ly to be in the clear, even if some of the sell­ing pres­sure eas­es.

    Brent crude, the inter­na­tion­al bench­mark, is bet­ter insu­lat­ed as it is a seaborne crude, mak­ing stor­age less of an issue as long as traders can char­ter super­tankers. Brent is trad­ing near $26 a bar­rel.

    ...

    The indus­try is also watch­ing for the knock-on effect on WTI-linked crude grades, as the bench­mark con­tract is used to help price bar­rels from all over the region, includ­ing oil from Cana­da, Mex­i­co and oth­er US region­al crudes.

    ———–

    “Explain­er: What neg­a­tive US oil prices mean for the indus­try” by Derek Brow­er, David Shep­pard and Anjli Raval; The Finan­cial Times; 04/20/2020

    Traders with long-term leas­es were prob­a­bly able to score huge prof­its. WTI con­tracts for deliv­ery in June are still trad­ing above $20 a bar­rel, even though they have fall­en from near $60 at the start of the year. Get paid $30-$40 a bar­rel to take the oil, then sell it for­ward in the futures mar­ket for $20 a bar­rel.

    A sud­den one day price col­lapse of near­ly $60/barrel. On a day that start­ed off with the price near $20/barrel. That’s quite a day for the mar­kets, espe­cial­ly for traders with long-term stor­age leas­es. That appears to be one of the key meth­ods for prof­it­ing for this wild price swing: own­ing long-term oil stor­age leas­es near Cush­ing, Okla­homa.

    And this cur­rent extreme sit­u­a­tion isn’t going away any time soon. The US is still pro­duc­ing more oil than its refiner­ies need. In oth­er words, we could eas­i­ly see more price swings because the under­ly­ing mar­ket imbal­ance did­n’t resolve itself. The extreme stor­age short­age con­tin­ues:

    ...
    But the biggest wor­ry for the sec­tor is the colos­sal imbal­ance in US sup­ply and demand that under­lies Monday’s flash crash. As the coro­n­avirus lock­downs spread and unem­ploy­ment ris­es, the US is now on its own pro­duc­ing 2m b/d more than its slow­ing refiner­ies need, and lacks avail­able stor­age to han­dle the excess, say ana­lysts. Con­sump­tion has to leap high­er, oil­fields need to be shut soon­er or new unknown stor­age capac­i­ty needs to be found faster.

    Until the imbal­ance is fixed, prices will remain low and volatile, crip­pling the sec­tor and forc­ing wide­spread dis­tress on pro­duc­ers. The May contract’s capit­u­la­tion is a nasty sign of a deeply dis­lo­cat­ed mar­ket.

    ...

    Even a dou­bling of the Opec sup­ply reduc­tions, due to start in May, would do noth­ing to add stor­age capac­i­ty in Cush­ing now.

    It is an embar­rass­ment for Mr Trump, who set out to pro­tect the US shale sec­tor after being exten­sive­ly lob­bied by indus­try exec­u­tives in recent weeks. After an agree­ment was reached between glob­al pro­duc­ers he called it “a great deal for all”.

    ...

    Domes­tic pro­duc­tion is even­tu­al­ly expect­ed to fall sharply, pos­si­bly by more than 10 per cent, but it may not hap­pen soon enough as pro­duc­ers endure a war of attri­tion. The June con­tract, which fell 15 per cent on Mon­day but clung on above $20 a bar­rel, is unlike­ly to be in the clear, even if some of the sell­ing pres­sure eas­es.
    ...

    So that describes what hap­pened on Mon­day. But, again, part of what made this even so inter­est­ing is that it’s not like this was a sud­den sur­prise. There has been talk about this exact type of mar­ket-dis­lo­ca­tion event tak­ing place for well over a month now ever since the lock­downs of economies began in March. For exam­ple, here’s an arti­cle from just a few days ago an ener­gy hedge fund’s pro­jec­tion for the price of oil. The way the fund saw it, we could see $100/barrel again even­tu­al­ly, but first prices need to fall even fur­ther to force the clo­sure of pro­duc­ers and a con­sol­i­da­tion in the indus­try. That’s how West­beck Cap­i­tal Man­age­ment sees the oil sec­tor when invest­ing for its Ener­gy Oppor­tu­ni­ty Fund. And the event West­beck Cap­i­tal saw as lead­ing to that fur­ther col­lapse in the price of oil was the lack of oil stor­age capac­i­ty, par­tic­u­lar­ly in Cush­ing, Okla­homa. In par­tic­u­lar, the fund was spec­u­lat­ing about Cush­ing’s stor­age capac­i­ty fill­ing up by mid-May. So an ener­gy fund that is pre­dict­ing a return to $100/barrel, but only after a fur­ther col­lapse from $20/barrel, was mak­ing a pre­dic­tion of that fur­ther col­lapse based on the loom­ing stor­age sup­ply short­age in Cush­ing, Okla­homa. And they made this pro­jec­tion of a pos­si­ble stor­age sup­ply col­lapse tak­ing place in mid-May days before Mon­day’s route due to that exact same stor­age sup­ply issue. So if any investors out there had an even bet­ter esti­mate of the Cush­ing stor­age sup­ply short­ages and pre­dict­ed Mon­day’s sup­ply col­lapse they prob­a­bly made a lot mon­ey:

    Bloomberg Quint

    Ener­gy Hedge Fund That Short­ed Oil Sees Chance for $100 a Bar­rel

    by Cather­ine Ngai and Nis­hant Kumar
    Apr 17 2020, 10:10 PM Apr 20 2020, 5:59 AM

    (Bloomberg) — Even as oil prices are bat­tered down to 18-year lows, one ener­gy fund thinks $100 a bar­rel is achiev­able. But first, prices need to fall even fur­ther.

    West­beck Cap­i­tal Management’s Ener­gy Oppor­tu­ni­ty Fund climbed 20.2% in March after declines in the first two months of the year, accord­ing to an investor let­ter. That puts the com­modi­ties-focused fund up 3.7% in the first quar­ter after U.S. oil futures cratered 66% — their worst quar­ter ever.

    The fund, which gained 40% last year short­ing U.S. shale com­pa­nies, has turned its atten­tion to oil tanks fill­ing up at var­i­ous points around the world, par­tic­u­lar­ly at the biggest U.S. hub in Cush­ing, Okla­homa. With too much oil and not enough places to put it, Cush­ing may reach stor­age lim­its by mid-May, a mar­ket dis­lo­ca­tion that could por­tend the next leg of a price rout.

    “What’s hap­pen­ing now is extreme­ly bull­ish for oil fur­ther out,” Lon­don-based West­beck Chief Exec­u­tive Offi­cer Jean-Louis Le Mee said in an inter­view. “When we are on the oth­er side of the pan­dem­ic, we think oil demand will nor­mal­ize very quick­ly. And next year, we could even see unprece­dent­ed inven­to­ry draws and the world quick­ly run­ning out of spare capac­i­ty.”

    That rout will mean more U.S. shale pro­duc­ers will have to throt­tle back out­put, some of which could be per­ma­nent, he said. The shut-ins, cou­pled with a recent deal by OPEC and allied mem­bers to curb pro­duc­tion, could set the stage for a price rebound in com­ing years.

    Le Mee, who pre­vi­ous­ly co-found­ed ener­gy fund Blue­Gold Cap­i­tal Man­age­ment, said that West Texas Inter­me­di­ate crude could trade around $16 to $17 in the next four to five weeks with stor­age fill­ing up. Fur­ther out, inven­to­ries could start draw­ing down in the sec­ond half of the year pro­vid­ed that the spread of the coro­n­avirus eas­es.

    U.S. ener­gy com­pa­ny shares ral­lied Fri­day on spec­u­la­tion parts of the coun­try would soon begin to emerge from the coro­n­avirus lock­down, which has crushed fuel demand. The S&P 500 Ener­gy Index climbed 7.7%, with EOG Resources Inc. up 12%.

    With U.S. pro­duc­tion not return­ing com­plete­ly giv­en nat­ur­al declines from shale and old­er wells, and unprece­dent­ed cap­i­tal expen­di­ture cuts for long-term projects, a return to nor­mal could mean spare capac­i­ty — the vol­ume of pro­duc­tion that can be brought on quick­ly — could run out. If all that pans out, there will be a buy­ing oppor­tu­ni­ty in oil equi­ties.

    “If you look back at the highs of 2014, a lot of the oil equi­ties are down 90% to 95%. So, if we’re right in pro­ject­ing much high­er oil prices at the end of 2021 and 2022, there’s a huge oppor­tu­ni­ty there,” he said, adding that he favors cer­tain names like Parex Resources Inc., MEG Ener­gy Corp. and White­cap Resources Inc.

    ...

    Rise of Retail

    Some of the volatil­i­ty in recent weeks has been caused by the large amount of mon­ey that’s flowed into the oil exchange-trad­ed prod­ucts space, with a surge of inter­est from retail investors look­ing to find a bot­tom. Investors have added more than $1 bil­lion over the past week to the Unit­ed States Oil Fund. As of April 16, the USO account­ed for more than one-quar­ter of the open inter­est in the June WTI con­tract.

    “We’ve been sur­prised by the amount of mon­ey that’s gone into long ETFs late­ly,” Le Mee said. How­ev­er, when Cush­ing hits tank tops and prices col­lapse, retail investors could sud­den­ly start liq­ui­dat­ing, accel­er­at­ing any sell­off, he said.

    ———–

    “Ener­gy Hedge Fund That Short­ed Oil Sees Chance for $100 a Bar­rel” by Cather­ine Ngai and Nis­hant Kumar; Bloomberg Quint; 04/17/2020

    “The fund, which gained 40% last year short­ing U.S. shale com­pa­nies, has turned its atten­tion to oil tanks fill­ing up at var­i­ous points around the world, par­tic­u­lar­ly at the biggest U.S. hub in Cush­ing, Okla­homa. With too much oil and not enough places to put it, Cush­ing may reach stor­age lim­its by mid-May, a mar­ket dis­lo­ca­tion that could por­tend the next leg of a price rout.”

    It was quite an accu­rate pre­dic­tion in terms of pre­dict­ing that a mar­ket dis­lo­ca­tion event would take place soon if stor­age sup­plies run out. But it was a few weeks off in terms of the tim­ing. West­beck­’s CEO was fore­see­ing WTI trad­ing around $16 to $17 for the next four to five weeks while stor­age fills up. That was their esti­mate as of this inter­view pub­lished on Fri­day. Then, on Mon­day, we have this mar­ket dis­lo­ca­tion event due to Cush­ing’s stor­age sup­ply col­laps­ing. So the nature of this event was­n’t a sur­prise but the tim­ing may have been:

    ...
    Le Mee, who pre­vi­ous­ly co-found­ed ener­gy fund Blue­Gold Cap­i­tal Man­age­ment, said that West Texas Inter­me­di­ate crude could trade around $16 to $17 in the next four to five weeks with stor­age fill­ing up. Fur­ther out, inven­to­ries could start draw­ing down in the sec­ond half of the year pro­vid­ed that the spread of the coro­n­avirus eas­es.
    ...

    Ok, now, to get a sense of how long the mar­kets have been watch­ing this loom­ing stor­age sup­ply issue build up, here’s a Reuters arti­cle from March 17 about how the plung­ing price of oil was lead­ing to a stor­age sup­ply crunch. The arti­cle also gives us a hint of how much mon­ey could have been made by peo­ple who hap­pen to be hold­ing avail­able stor­age con­tracts when the mar­ket melt­ed down yes­ter­day: As of the time of the arti­cle (March 17), the cost of stor­ing a bar­rel of oil in Cush­ing had rough­ly dou­bled over the pre­vi­ous month...to 50 cents a bar­rel. So back in Feb­ru­ary is was ~25 cents a bar­rel to store that oil in Cush­ing. And yes­ter­day peo­ple who had avail­able stor­age capac­i­ty were paid $40 a bar­rel to just take the oil:

    Reuters

    Oil plunge sets off search for tanks on land and at sea

    Devi­ka Krish­na Kumar, Ron Bous­so, Jonathan Saul
    March 17, 2020 / 12:06 AM

    NEW YORK/LONDON (Reuters) — Traders are scram­bling to secure oil stor­age tanks on land and at sea to cope with slump­ing demand result­ing from the coro­n­avirus out­break and a flood of sup­ply from the Sau­di-Rus­sia price war.

    Rates to store oil at the world’s main trad­ing hubs from Japan to South Africa and the Unit­ed States are surg­ing as mil­lions of uncon­sumed bar­rels of oil hit the mar­ket dai­ly.

    Trad­ing house Glen­core (GLEN.L) this week also char­tered one of two of the world’s largest oil tankers, capa­ble of car­ry­ing 3 mil­lion bar­rels of oil, in order to store crude at sea.

    Roy­al Dutch Shell (RDSa.L) has booked at least two large crude tankers for float­ing stor­age, on expec­ta­tions that onshore tank space will not be enough to meet the glut.

    The need for a place to park all that sur­plus crude is breath­ing new life into the mar­ket at Cush­ing, Okla­homa, the nation’s hub for trad­ing of bil­lions of dol­lars of crude a day and the town that bills itself “the pipeline cross­roads of the world”.

    Ana­lysts esti­mate the glut could reach more than 1 bil­lion bar­rels. Some of the excess will be absorbed by nations snap­ping up cheap oil for strate­gic reserves, includ­ing India and the Unit­ed States, but that will only mop up some of the sup­ply.

    ...

    Stor­age rates at Cush­ing dou­bled over the past month, and were seen as high as about 50 cents per bar­rel per month by Fri­day, two traders famil­iar with the mat­ter said. Stor­age for about 540,000 bar­rels at Plains All American’s Cush­ing tanks for sub­lease was offered at 50 cents per bar­rel (cpb) for a term of one year, one source said.

    “We aver­age about 2 deals per day. Last week we booked 60 deals,” said Ernie Barsami­an, founder and CEO of The Tank Tiger, a ter­mi­nal stor­age clear­ing house based in Prince­ton, New Jer­sey.

    The Unit­ed States cur­rent­ly has more than 450 mil­lion bar­rels in crude stor­age, not includ­ing strate­gic reserves. The drop in prices has sparked numer­ous stor­age inquiries, par­tic­u­lar­ly at Cush­ing, the deliv­ery point for bench­mark U.S. crude futures.

    Near­ly 38 mil­lion bar­rels are cur­rent­ly parked there, half the about 76 mil­lion bar­rels in capac­i­ty. The rest of U.S. stor­age is at small­er tank farms or refin­ing facil­i­ties. Inven­to­ries at Cush­ing rose more than 640,000 bar­rels in the week through Fri­day, traders said, cit­ing data from mar­ket intel­li­gence firm Gen­scape.

    “Every­one and their moth­er is scram­bling to fill up tank­age,” one trad­er said.

    EXPORT FALL SEEN

    Once a barom­e­ter for the health of U.S. crude sup­ply, Cushing’s mar­ket clout waned after Wash­ing­ton lift­ed a ban on U.S. crude exports in late 2015 amid the shale oil boom.

    Com­pa­nies have since spent mil­lions of dol­lars build­ing infra­struc­ture to facil­i­tate trad­ing and stor­age at the country’s Gulf Coast ports.

    But with a wave of Sau­di and Russ­ian oil set to hit, U.S. crude exports are expect­ed to plunge by about 1 mil­lion bar­rels per day (bpd) in April and May to about 2.5 mil­lion bpd, sources at the biggest mer­chants in the coun­try said on Fri­day.

    Domes­tic demand has also plunged, with U.S. gaso­line prices plum­met­ing to a record low as trav­el grinds to a halt due to the pan­dem­ic.

    Stor­age at Cush­ing is held by large mid­stream com­pa­nies includ­ing Plains All Amer­i­can (PAA.N), Mag­el­lan Mid­stream (MMP.N)and Enbridge (ENB.TO). Mag­el­lan said Mon­day that it is see­ing increased inter­est for long-term crude stor­age in Cush­ing.

    Plains did not respond to a request for com­ment and Enbridge declined to dis­cuss uti­liza­tion rates at Cush­ing, say­ing it con­tained cus­tomer-spe­cif­ic infor­ma­tion.

    The crude mar­ket is cur­rent­ly trad­ing in what’s known as con­tan­go, where for­ward prices are high­er than imme­di­ate prices. That incen­tivizes traders to park bar­rels into stor­age in the hopes of sell­ing them for a prof­it lat­er.

    The spread between front-month U.S. crude for April deliv­ery and those for deliv­ery in 12 months WTCLc1-WTCLc12 widened to the biggest dis­count in four years last week. The same spread for Brent LCOc1-LCOc12 widened to the biggest dis­count in five years on Mon­day.

    Com­mer­cial crude oil stor­age in South Korea, one of the largest in Asia, was most­ly tak­en up last month when con­tan­go first occurred this year, Asian sources said.

    Barsami­an said that as the spread widens, the cost for stor­age will as well.

    “The con­tan­go will begin to feed on itself and get steep­er, unless the Saud­is and Rus­sia pull an about face.

    ———–

    “Oil plunge sets off search for tanks on land and at sea” by Devi­ka Krish­na Kumar, Ron Bous­so, Jonathan Saul; Reuters; 03/17/2020

    Stor­age rates at Cush­ing dou­bled over the past month, and were seen as high as about 50 cents per bar­rel per month by Fri­day, two traders famil­iar with the mat­ter said. Stor­age for about 540,000 bar­rels at Plains All American’s Cush­ing tanks for sub­lease was offered at 50 cents per bar­rel (cpb) for a term of one year, one source said.”

    A dou­ble of stor­age costs from Feb­ru­ary to March in Cush­ing, OK. That was how this mar­ket dis­clo­ca­tion event was build­ing up a month ago. A dou­ble to 50 cents per bar­rel of stor­age. Any­one for­tu­nate enough to have that stor­age still avail­able as of Mon­day could have been paid $40 to fill up that space that cost 50 cents to rent last month. And then they can sell the oil for what­ev­er at some future point.

    And note that Cush­ing was around half capac­i­ty as of March 17. So it’s basi­cal­ly filled up over the last month. That sug­gests that oth­er small­er stor­age facil­i­ties in the area were prob­a­bly also around half capac­i­ty a month ago. And if any of those facil­i­ties decid­ed for what­ev­er rea­son to not fill up like Cush­ing was over the last month, they could have been paid $40/barrel to fill that capac­i­ty up on Mon­day:

    ...
    Near­ly 38 mil­lion bar­rels are cur­rent­ly parked there, half the about 76 mil­lion bar­rels in capac­i­ty. The rest of U.S. stor­age is at small­er tank farms or refin­ing facil­i­ties. Inven­to­ries at Cush­ing rose more than 640,000 bar­rels in the week through Fri­day, traders said, cit­ing data from mar­ket intel­li­gence firm Gen­scape.

    “Every­one and their moth­er is scram­bling to fill up tank­age,” one trad­er said.
    ...

    Did any small­er stor­age facil­i­ties just hap­pen to have an unusu­al­ly large amount of stor­age capac­i­ty on Mon­day? If so, is there a good expla­na­tion for why there were hold­ing out?

    More gen­er­al­ly, there’s the ques­tion of whether or not the Cush­ing sup­ply crunch that took place Mon­day was a sur­prise to the mar­ket or as expect­ed. As we saw from the first piece, as of April 10 the Cush­ing stor­age facil­i­ty was at about 72 per­cent full. But the prob­a­bly was that the remain­ing stor­age sup­ply may not be avail­able. Some­one was pre­sum­ably already leas­ing the remain­ing sup­ply (some­one who made a lot of mon­ey on Mon­day). In the sec­ond piece, we saw that West­beck hedge fund was pro­ject­ing that WTI would run at about $16–17/barrel for the next month before Cush­ing’s sup­ply runs out in mid-May. And yet this event due to the sup­ply crunch at Cush­ing took place on Mon­day.

    So is the sud­den Cush­ing sup­ply crunch that rocked the mar­kets on Mon­day in keep­ing with mar­ket pro­jec­tions of the stor­age sup­ply sit­u­a­tion at Cush­ing or was there a sur­prise? That’s one of the key ques­tions when it comes to whether or not some­one was essen­tial­ly engag­ing in insid­er trad­ing.

    And yet, it’s hard to imag­ine peo­ple weren’t engag­ing in insid­er trad­ing. All they would need is inside infor­ma­tion on Cush­ing’s stor­age sup­ply mar­kets. How many ran­dom par­ties around the world must have had access to that kind of infor­ma­tion? For exam­ple, here’s a set of tweets from J. Kyle Bass — known for mak­ing a for­tune on short posi­tions — from April 2 where he open­ly talks aobut how he’s hear­ing that Cush­ing won’t take any more crude. He also projects that Cush­ing’s tanks would top out in 22 days. So he was project an April 24 stor­age top­ping date. He was just open­ly tweet­ing about this. So how many peo­ple were watch­ing and wait­ing for exact­ly this kind of event:

    Here in TX (despite Trump’s plea to MBS), the stor­age facil­i­ties are full. Pipelines are full of crude and I was just told Cush­ing won’t take any more crude. What will the price of spot crude oil be when they lit­er­al­ly can’t give it away? #Oil­Price­War @JavierBlas— ??Kyle Bass?? (@Jkylebass) April 2, 2020

    #OOTT Cush­ing can take anoth­er rough­ly 25–30 Mb. Spot arbs pric­ing as such still, with Mid­land pric­ing low enough to flow and fill stor­age econs. Per my crude/products bal­anc­ing for­cast, Cush­ing and Padd 2 hit tank tops in 22 days now, as refy run cuts kick in full nxt week.— Huge Arb Guy (@ArbBuddy) April 2, 2020

    Large oper­a­tor telling me they have the pipes full and are con­tin­u­ing to pump. Wor­ried about where he’s going to put what he’s going to pump in com­ing weeks.— ??Kyle Bass?? (@Jkylebass) April 2, 2020

    Bass is clear­ly demon­strat­ing his access to all sorts of insid­er indus­try knowl­edge about these loom­ing stor­age capac­i­ty issues in these tweets. How much did Bass an oth­er investors with sim­i­lar knowl­edge make on Mon­day?

    So that’s all part of what makes Mon­day’s his­toric mar­ket dis­lo­ca­tion event so his­toric: It was an unprece­dent­ed unthink­able mar­ket rout that at least part of the mar­ket seemed to see com­ing for well over a month. That’s a lot of time to pre­pare for an unprece­dent­ed unthink­able event with unprece­dent­ed unthink­able poten­tial prof­its.

    Posted by Pterrafractyl | April 21, 2020, 10:58 am
  12. Bing Liu: COVID-19 Researcher Dies in Penn­syl­va­nia Mur­der-Sui­cide

    https://heavy.com/news/2020/05/bing-liu/

    Dr. Bing Liu was a Uni­ver­si­ty of Pitts­burgh researcher in Penn­syl­va­nia and mol­e­c­u­lar biol­o­gist who was research­ing the COVID-19 virus and was described as being on the verge of “mak­ing very sig­nif­i­cant find­ings” relat­ing to it.

    His area of exper­tise was “com­pu­ta­tion­al mod­el­ing and analy­sis of bio­log­i­cal sys­tems dynam­ics,” the Uni­ver­si­ty said, adding: com­plex cel­lu­lar inter­ac­tions, Bayesian net­work mod­els and meth­ods, and sta­tis­ti­cal mod­el check­ing and sen­si­tiv­i­ty analy­ses.

    Liu received both his Bach­e­lor of Sci­ence and Ph.D. in com­put­er sci­ence at the Nation­al Uni­ver­si­ty of Sin­ga­pore “under the super­vi­sions of Drs. P.S. Thi­a­gara­jan and David Hsu, and did his post­doc­tor­al stud­ies in the lab of Pro­fes­sor Dr. Edmund Clarke at Carnegie Mel­lon Uni­ver­si­ty,” the School of Med­i­cine states.

    Was he mur­dered because he proved the COVID-19 virus can be man made in a lab and that he had to be liq­ui­dat­ed by Ele­ments of the far right and at the same time use his mur­der to fur­ther sup­port and col­lab­o­rate Trump’s fab­ri­ca­tion that Chi­na is total­ly respon­si­ble for this pan­dem­ic and the Com­mu­nist gov­ern­ment mur­der him in order to cov­er it up and to help turn up the blame Chi­na BS? We shall see how this turns up and where it goes?

    Posted by Roberto Maldonado | May 6, 2020, 7:35 am

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