Dear Reader,
It appears that a $1 trillion coronavirus stimulus package just wasn’t enough… Why not make it $2 trillion?
There was an agreement between the White House and policymakers yesterday on how to put the $2 trillion to work for the U.S. economy.
Many Americans will be receiving checks. Unemployment insurance will be expanded, and hundreds of billions of dollars in loans will be offered to both small and large businesses across the country.
And I imagine that just about anything that a health care facility requests regarding COVID-19 will be provided… stat.
And the markets responded accordingly.
The Dow Jones Industrial Average rocketed more than 11%, its largest one day jump since 1933. The S&P 500 was up 9.4%, and the Nasdaq popped 8.1%. This is the kind of move that we would expect.
And we can contrast this to the market drop after the original announcement of a $1 trillion stimulus package. That wasn’t a logical market response. It was being driven by fear. I’m encouraged by seeing the markets react appropriately.
And the $2 trillion stimulus package came with some optimistic news from the U.S. president… mainly that he believes things could begin the process of returning to normal by Easter (April 12). Despite all of the negativity from the press, I believe that timeline is possible.
The U.S. has been in isolation for the better part of the last two weeks. With another 20 days of social distancing and the increase of warmer, more humid weather in the northern states, I believe that the spread will have already peaked during this time frame.
And better yet, I expect that more than two million COVID-19 tests will have been run by then and we’ll have far more accurate data, which will drive rational decision-making.
In short, I expect the U.S. is going to turn the corner in April and begin the process of getting back to work and school. It won’t happen all at once, but it will happen over the weeks leading into summer in the northern hemisphere.
Now let’s get to today’s insights…
Two weeks ago, the world’s most powerful supercomputer at the Oak Ridge National Laboratory, Summit, was turned loose on COVID-19.
Summit analyzed 8,000 different compounds, looking for something that can bind to COVID-19 proteins to render the virus ineffective. And in just a few days, the supercomputer found 77 compounds that might be effective.
I’ll explain what this means with a little background…
Proteins are long chains of amino acids. They are responsible for every function a living organism’s body performs. And a protein’s structure tells us how it will impact living organisms, including humans. The structure also determines what other compounds the protein can bind to.
Now, the reason COVID-19 is so contagious is because it can easily bind to cells inside the human body. In fact, COVID-19 binds about 10 times more tightly than SARS. That’s why it can live in humans for weeks at a time.
But if we can find a compound that is very effective at binding to COVID-19, the virus won’t be able to spread to human cells. That’s what Summit is working on.
And Summit just got a little help…
Recently, teams at the University of Texas at Austin and the National Institutes of Health (NIH) successfully mapped COVID-19’s protein structure. They produced the clearest, most detailed analysis to date.
This new research was fed back into Summit, and the supercomputer narrowed its 77 compounds down to the seven most promising candidates. Further research will be done on these candidates to see if any can be used to create a vaccine for COVID-19.
So this is yet another example of how the best scientific minds in the world are leveraging bleeding-edge technology to address the current pandemic.
And the fact that they narrowed down seven prime therapeutic candidates in just a couple weeks is amazing. As we talked about yesterday, this kind of thing just wouldn’t be possible without the advanced computing power we have today.
Prominent blockchain project Tezos just agreed to settle a series of class action lawsuits for $25 million. This is an interesting story that harkens back to the “Wild West” of unregulated initial coin offerings (ICOs) three years ago.
Tezos is a smart contract platform with a strong emphasis on governance and the formal verification of contracts. It has been one of the more promising blockchain projects over the last few years.
Smart contracts are agreements between two parties that self-execute once the terms of the contract are satisfied. The purpose is to make rent-seeking intermediaries unnecessary, thus reducing transaction costs and improving security.
Smart contracts are, in fact, one of the more promising applications of blockchain technology. And that’s why Tezos’ ICO generated a lot of hype.
The project managed to raise a whopping $232 million, denominated in bitcoins (BTC) and ether (ETH), back in 2017… with just a white paper. In other words, Tezos was just an idea at the time. There was no working technology.
But there was a catch…
Tezos classified the funds it raised as “non-refundable donations.” That meant its investors weren’t investors at all. The team at Tezos positioned them as “donors.” And as donors, they waived the right to participate in class action lawsuits against Tezos. In exchange, they received Tezos tokens (XTZ).
This was done in an attempt to avoid securities regulations. That was back before the SEC started to come down hard on blockchain projects and ICOs, so it went largely without notice.
The founders of Tezos, Arthur and Kathleen Breitman, set up the Tezos Foundation, a nonprofit entity that provides governance and oversight, to manage the ICO funds. This has been a common practice in the industry.
The foundation acts as an independent steward on behalf of the best interest of the project. In other words, its job is to make sure the founders don’t run off with all the money.
But not long after the ICO, the Breitmans got into a big fight with the foundation over how it was being run. This became very public after Reuters ran a story on it.
To make a long story short: the Tezos launch was delayed by a year. The XTZ token plummeted by 50%. And a series of class action lawsuits alleged that the ICO was an illegal sale of an unregistered security.
Amazingly, Tezos managed to settle these lawsuits for just $25 million. Considering that the $232 million it raised in bitcoin and ether is now worth $635 million, the settlement is a drop in the bucket. And Tezos has somehow managed to avoid problems with the SEC as well.
So what does this have to do with us as investors?
As my longtime readers know, I don’t plan on making cryptocurrency recommendations any time soon. The industry needs more time to mature, and it is still struggling with a multiyear correction since December 2017.
Additionally, the SEC stepped up its enforcement actions against blockchain projects in 2019, which has continued this year.
The story of Tezos is an extraordinary one. It would be unheard of for a company with only an idea to raise $232 million right out of the gates prior to the ICOs that we saw in 2017.
And it has brought to light the issues that are created when a startup raises too much money without having to give up any equity or control.
The issue for investors is that there is board-level representation acting on behalf of those who invested in Tezos. Tezos can survive for more than a decade with all of the cash that it has on hand and never go public. It may not even work that hard to proliferate its blockchain technology, which would result in its cryptocurrency decreasing in value rather than increasing.
We need to see significant progress in the industry from a regulatory standpoint, from a capital formation standpoint, and from the perspective of real-world adoption of blockchain technology before I get more excited about investment opportunities in this space.
Waymo is making moves to further its secret agenda…
Back in August of last year, Waymo released its self-driving data set containing 1.2 million labels. These are important to help the cars identify people, animals, and objects they will encounter on the road.
Labeling objects that a vehicle might encounter in tens of thousands of different situations on roads is one of the most tedious and time-consuming tasks required to train an artificial intelligence (AI).
This data set is used to train self-driving AI on how to recognize and categorize objects and driving conditions. Waymo made the data set open source so developers all over the world could use it to improve AI used for self-driving technology.
Waymo just announced that it has added 10.6 million new labels to the open-source dataset. That’s right. It has made 10 times more data available to any developer interested in working with it.
What’s more, Waymo launched a developer challenge. It is offering prizes of up to $110,000 to developers who can improve self-driving AIs’ detection and tracking abilities.
That raises the question… Why is Waymo doing this?
And the answer is simple. Waymo is seeding the autonomous vehicle industry. It is building a developer community around its self-driving technology.
Put even more simply, it’s quietly creating a workforce that knows how to work with its technology and data sets.
This will allow Waymo to identify and recruit the top talent in the space. And it will give developers the skills they need to help the world’s biggest carmakers implement Waymo’s self-driving technology.
That’s the key to advancing Waymo’s secret agenda.
Remember, Waymo wants to license its self-driving tech to carmakers. It has no interest in becoming a car manufacturer or even operating a fleet of self-driving cars.
These latest moves will accelerate the deployment of self-driving cars. And it will allow Waymo’s parent company, Google, to collect massive amounts of data from inside those cars.
Driving patterns… temperature preferences… music preferences… how often we talk on the phone… if we are generally pleasant or angry… how much we weigh… Google will know it all once Waymo’s technology is in our cars…
And it will be able to surveil consumers an additional hour or more every day as it captures our time spent in our cars.
Plus, there will be a big screen in the car where Google can serve us ads on our daily commute. That hasn’t been possible before.
So Waymo is kicking the secret plan into high gear. We may not approve of Google’s plan to surveil us and capture even more of our data. I certainly don’t.
But this is yet another sign that self-driving technology is almost ready to go live.
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.
