Dear Reader,
A headline caught my eye late on Friday evening: “Key coronavirus forecast predicts over 410,000 total U.S. deaths by Jan. 1: ‘The worst is yet to come.’”
Oh my! The pandering of fear and panic continues…
Even when I know something is false, I still like to see what the assumptions are and where the numbers are coming from.
In this case, the projection came from the Institute for Health Metrics and Evaluation (IHME), a part of the University of Washington.
If we just use some common sense, we can figure out pretty quickly that the projection doesn’t add up:
The first officially documented case of COVID-19 in the U.S. was back in January of this year.
To date, 193,587 deaths are considered related to COVID-19.
Since January, that is an eight-month period.
We can clearly see that daily new cases are falling quickly in the U.S.
We can clearly see that daily deaths are falling quickly in the U.S.
As per the CDC, only 6% of the 193,587 claimed deaths were from just COVID-19 (all other deaths had two or three other underlying conditions responsible).
And as much as 90% of all “positive” PCR tests are false positives caused by an overly sensitive cycle setting on the PCR machines.
But despite all this, we are to believe that in less than four months, the COVID-19 death count will more than double? No way.
This made me very suspicious of the IHME projections. So I chose a baseline country that we could analyze… Sweden.
As we know from The Bleeding Edge, Sweden’s unique, courageous, and logical approach to dealing with COVID-19 has produced incredible results. It is highly likely that Sweden has already reached herd immunity.
As we can see below, in less than four months, Sweden went from the outset of the pandemic to near zero daily deaths. Since the beginning of July, daily deaths were typically less than 10, and since the beginning of August, many days have seen less than five deaths or even zero.
What’s remarkable about Sweden is that the country accomplished this without economic lockdowns, without mandating masks, and without closing schools. No fear, no panic, no riots, and no mask requirements.
That’s why I wanted to see what the IHME is predicting for Sweden. Let’s have a look:
The line on the left side of the graph represents daily deaths. And then we can see two projections into the future.
The green line that continues until January 1 at near zero daily deaths assumes that everyone suddenly begins to wear masks. The red line that projects a massive spike to 700 deaths per day – seven times higher than Sweden’s April peak – assumes the Swedes don’t all wear masks.
Does that make any sense at all? Of course not. It’s lunacy.
Sweden managed a controlled spread of COVID-19 to the low-risk parts of its population – without requiring masks. But we are now somehow supposed to believe that if the Swedes don’t wear masks, the next four months will become seven times worse than the last eight months?
You’ve got to be kidding me. Absolute nonsense.
Why is this happening? Why are our academic institutions and scientific communities failing us when we need them the most?
Sadly… money. COVID-19 is the hottest topic right now, and by adding fuel to the fire to make the “crisis” appear bigger than it actually is, more funding ends up being driven to academic and scientific research.
Scientists who wrote and spoke about the facts related to COVID-19 have been excoriated by the academic and scientific communities. Their careers have been badly damaged for not “toeing the line” or “playing along.”
Michael Levitt, a biophysicist and expert in structural biology at Stanford, and John Ioannidis, another Stanford professor who is an expert in evidence-based medicine and epidemiology, are two perfect examples.
I have tremendous respect for their willingness to simply tell the truth and share the facts about COVID-19… even if it comes at personal expense.
Sweden too was severely criticized by the scientific community for its approach to managing COVID-19. But in the end, Sweden will be proven right. Sweden will have the last laugh.
And so will we… because we know that the “game” is nearly up.
And please make sure to check in tomorrow in The Bleeding Edge. I promise to spill some ink on the “breather” that we are experiencing in the stock markets that started on Thursday last week.
Now let’s turn to today’s insights…
We haven’t talked much about security tokens recently, but they are an asset class that will ultimately transform the financial industry. And there has been a major development.
The first Securities and Exchange Commission (SEC)-approved security token initial public offering (IPO) has gone live.
We’ll talk about the IPO in a minute, but first, we need to bring new readers up to speed on this brand-new asset class…
Security tokens are digital assets that work like a cryptocurrency. They are held in a digital wallet, and holders can trade them 24/7, 365 days a week. The transactions are recorded on a blockchain, creating a digital ledger that cannot be altered.
Unlike cryptocurrency, however, security tokens offer some level of ownership interest in the underlying asset. It could be an ownership stake in the company, just like a traditional stock. Or it could be the right to receive some amount of the revenue or cash flow generated by the company.
There are many ways in which security tokens can be structured. That’s one reason they are so interesting.
Here’s a great visual:
Security Token Structures
Source: INX
And another interesting aspect of these tokens is that security token trades can settle almost instantly on digital asset exchanges. When an investor buys a security token, he or she immediately becomes the registered owner of that asset.
This may sound like a given, but that’s not how stocks trade today.
When an investor buys a stock, the stock is typically held under the brokerage firm’s “street name.” That means the brokerage holds the stock in its own name – it does not register the shares in the investor’s name.
Then, when that investor sells the stock, the transaction flows through a clearinghouse. This is a third-party intermediary that validates the transaction and ensures that it clears correctly.
This extra step is why it typically takes three days for a stock transaction to settle. And it adds extra costs to the transaction as well. That reduces the brokerage firm’s margins unless it passes those costs on to customers.
Don’t believe me? Give this a shot. Sell your stocks in your portfolio, and then try to transfer the proceeds to your bank account once the stock is sold.
I’ll save you the time. It is impossible to do. Consumers cannot extract their money from the brokerage account until after the transactions have settled. It takes several days before that happens.
With security tokens, the blockchain automates the clearinghouse function. That’s how trades can settle on the same day and assets can be registered in the owner’s name. In fact, transfer of ownership – settlement – happens in a matter of minutes, or sometimes seconds.
The first SEC-approved security token offering is for a digital asset exchange called INX. INX is a fully regulated exchange that allows investors to trade digital assets on a platform that looks and feels just like a traditional brokerage.
With its security token IPO, INX is looking to raise $117 million to help grows its business. The company wants to increase its staff and ramp up marketing efforts to grow its customer base.
As for its security token itself, INX will distribute 40% of its operating cash flow each year to token holders. That means investors will be paid a proportionate share of INX’s cash flow each year. So the security token is like a call on the company’s future cash flows.
This is a major milestone for the blockchain industry. The INX token offering is the first of what will be thousands of security token offerings coming over the next several years. In fact, 2021 is setting up to be a big year for security tokens.
So I’m very excited to watch this new asset class blossom. Readers can expect to hear a lot more about security tokens in these pages going forward.
And just to be clear, this is not a recommendation to buy into INX… It’s simply an exciting development in the blockchain industry.
In June 2019, I attended the Amazon re:MARS 2019 conference in Las Vegas. The focus of the invite-only conference was Machine learning, Automation, Robotics, and Space.
There, Amazon’s Prime Air division unveiled its new drone. Here’s the picture I snapped with my phone:
Amazon Revealing Its New Drone
Pretty cool. Amazon demonstrated some prerecorded video of the drone in flight at the event.
And finally, just days ago, Amazon has received approval from the Federal Aviation Administration (FAA) to start testing drone deliveries here in the United States.
That means it is getting real… The field of players is now full. FedEx, UPS, and Google’s Wing division have also received FAA approval for their own drone deliveries. Amazon was the last to get the FAA’s nod.
I expect Amazon to aggressively build its drone fleet and start testing deliveries in certain parts of the country. These drone deliveries make the most sense in places where people have larger yards with plenty of room for the drones to land. So we probably won’t see Amazon’s drones in urban areas for quite a while.
And these drones are designed to operate within 7.5 miles of an Amazon distribution center. That means Amazon will need to build out its infrastructure to cover the small cities and towns that aren’t close to a larger facility.
So we’ll see smaller “hubs” feeding into rural America.
And here’s the best part…
Once Amazon’s Prime Air delivery service is up and running, the company expects to make deliveries in 30 minutes. How incredible is that?
We can place an order as soon as we realize we need something and have it shuttled in from the sky in half an hour. That brings urban convenience to suburban and rural areas.
I expect Amazon Prime Air to be the top drone delivery service in the U.S. Amazon’s ground-based logistics network already runs circles around everybody else. I’m sure its air-based logistics will as well.
We’ll wrap up today by coming back to TikTok. As a reminder, this is the China-based social media company owned by ByteDance that will be banned in the U.S. for data privacy violations unless its U.S. operations are sold.
We’ve watched as Microsoft, Twitter, and Oracle each made a run at buying TikTok’s U.S. operations. What’s so interesting here is that acquisition discussions like these are usually kept quiet until a deal is announced.
But that hasn’t been the case with TikTok. We have been able to watch the developments unfold in real time.
And in addition to the companies above, we just learned that Walmart originally teamed up with Google and Softbank to try to acquire TikTok’s U.S. operations. But then that alliance fell apart, and Walmart teamed up with Microsoft, which we talked about a few weeks ago.
We have also learned that U.K. private equity firm Centricus put in a $20 billion proposal for TikTok’s operations in the U.S., Australia, New Zealand, and India. It teamed up with Indian social media company Triller to try to get that deal done.
But the word is that ByteDance wants $30 billion for TikTok’s U.S. operations. That’s a hefty valuation for just part of the company. So it doesn’t look like Centricus’ deal is going to happen.
And if this weren’t chaotic enough, the Chinese government just stepped in and blocked TikTok from exporting its artificial intelligence (AI) engine.
This means any deal would come without TikTok’s key software that drives the application’s recommendation engine. That throws a huge wrench in the discussions.
The AI engine profiles users and recommends TikTok videos they will like. It’s what makes TikTok so “sticky.” That makes it the most valuable technological aspect of the platform.
Stripping the AI engine out of the acquisition would make TikTok worth a fraction of the $30 billion ByteDance is asking for. And that’s raised a lot of questions about whether a deal will get done.
And now there’s a bigger underlying story…
China’s move to strip AI out of the TikTok deal may have been in retaliation to the U.S. government’s ban. Whatever happens with TikTok will set a precedent for how the U.S. and China will handle intellectual property (IP) issues going forward.
After all, China has a stated national policy to become the world leader in artificial intelligence by 2030. That’s not far away. So it’s easy to understand why it doesn’t want to sell the technology behind one of its most successful AI companies to a U.S. company.
And that has major implications for the trade agreements that the two countries have put in place.
This could be another reason for the U.S. to separate its business and supply chains from China. In fact, I recently put together a presentation describing this trend – the reduction of U.S. dependence on China and China-based companies.
If you’d like to find out more, go right here to watch.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
