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US COVID-19 Relief Plan Will Use Fintech, but Crypto Not Welcome

US COVID-19 Relief Plan Will Use Fintech, but Crypto Not Welcome

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U.S. fintech lenders are helping small businesses affected by the COVID-19 crisis, but crypto players are unable to join.

American financial technology firms are now able to help Main Street businesses affected by the COVID-19 crisis via a federal relief plan, but cryptocurrency-native companies apparently don’t fit the bill.

Last week, the United States Small Business Administration released an application form for nonbanks to sign on as lenders under the federal Paycheck Protection Program, referred to as the PPP, so that they can provide low-interest, forgivable loans to small businesses affected by the pandemic. Since then, a number of high-profile fintech companies have joined the scheme, but none of the crypto-focused lenders interviewed by Cointelegraph said they were going to enroll.

While some crypto actors deliberately chose not to partake in the PPP, others pointed out that they couldn’t join even if they wanted to, as the application form didn't take their specifics into account.

Introduction to the PPP

The PPP is a two-year loan designed to mitigate the economic impact of the COVID-19 pandemic on small businesses, which are defined as companies that have 500 employees or less, although exclusions apply. It covers eight weeks of payroll expenses for employers that continue to pay their employees during the pandemic and has an interest rate of 1%. Businesses applying for the PPP can borrow up to a maximum of $10 million.

The agency will ostensibly forgive PPP loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest or utilities, but at least 75% of the forgiven amount must have been used for payroll. Ultimately, all costs will be covered by a federal government grant.

The $350 billion small business loan program is a part of the U.S. government’s wider $2 trillion relief package called the Coronavirus Aid, Relief and Economic Security Act, otherwise known as the CARES Act, that was signed into law by President Donald Trump on March 27.

There has been an immediate demand for the PPP, as well as for other forms of financial assistance for small businesses. By April 11, the SBA had processed over 1 million loan applications for around $250 billion, more than a half of the program’s total budget. Due to the large number of applications, media reports suggest that some banks have begun stalling loan approvals, often prioritizing existing customers over other candidates.

Fintech comes to the rescue

On April 9, the SBA extended the PPP to nonbank entities if the lender “originates, maintains, and services business loans or other commercial financial receivables” as part of its business, meaning that fintech lenders are allowed to join the scheme. Notably, Financial Innovation Now, an alliance of information technology juggernauts with members as large as Amazon, Google and Apple, had been lobbying since March to be included in the PPP as alternative lenders.

Fintech firms seem to have certain advantages over traditional lenders, such as agility, as John Pitts — the head of policy at the San Francisco-based financial services company Plaid — previously explained to Cointelegraph: “Fintech lenders are digital-first and can process loans quickly — a matter of hours versus days compared to traditional lenders.”

Pitts also stressed that “fintech lenders will become a life-line” for firms that may have never needed a small business loan before or are too small to qualify for a loan from a traditional bank. Indeed, a number of fintech firms have since applied to become PPP lenders, including players like Intuit and Paypal, which has already announced the issuance of its first loans.

Crypto is locked out of the PPP

Despite fintech getting a greenlight, there are no cryptocurrency-native lenders on the list. The closest participant in that regard is Jack Dorsey’s payment firm Square Capital; its parent company Square Inc. supports Bitcoin (BTC) trading on its Cash App application and therefore is generally seen as crypto-friendly.

Alex Mashinsky, the CEO of the crypto lending platform Celsius Network, explained that industry entities are deemed asset-backed lenders while all SBA-approved lenders are balance sheet lenders or banks that “lend other people (depositors) money on a fractional reserve basis.” Mashinsky told Cointelegraph that “because of this and other licensing issues I don't see crypto lenders joining or being approved for the PPP.”

Indeed, none of the remaining crypto lending firms interviewed by Cointelegraph said they were going to partake in the PPP. Salt and Nexo declined to comment, while press teams from Gemini and Genesis Capital have yet to return the request for comment. A representative for CoinLoan said it hadn’t fully understood all the requirements at the time, but was not interested in working with forgivable loans.

A spokesperson for BlockFi said that it wasn’t participating in the PPP program, but is “reviewing information as it becomes available, including eligibility for crypto-specific lending companies.” The representative added that the company is supportive of such programs, as fintech firms are generally more efficient when it comes to small business lending:

“Since the 2008 recession, banks largely pulled out of small business lending due to lack of tools to quickly assess risk and make profit off these loans – which is exactly why today there are a surge of fintech lending companies that specialize with small business lending specifically (where they can assess and turn a loan around sometimes in 24 hours or less compared to weeks with a bank).”

Similarly, a representative for YouHodler said it does not service U.S. citizens at this time, which is why it cannot get involved with the PPP initiative. Nonetheless, the spokesperson added that the company has “a few features of our own designed to support our European clients in times of economic hardship,” elaborating:

“For example, we started a new loan plan using BTC as collateral and features zero fees. This zero-fee loan plan is already up and running and will go until the end of the lockdown period.”

Using cryptocurrency assets — which currently amount to almost $2 billion on the market — as collateral is an efficient move that could theoretically be picked up by traditional banks or government institutions. Jack Purdy, an analyst at the crypto research firm Messari, suggested this in an email conversation with Cointelegraph:

“Commercial banks already underwrite loans using a wide array of collateral like intangible assets or otherwise highly illiquid assets that can actually be riskier than Bitcoin given a market might not exist. When these loans default, there can be substantial haircuts to the value they receive versus what they expected to at the time of underwriting. In addition, banks spend considerable resources trying to claw back some money through collateral sales whereas if Bitcoin were used this would not be an issue.”

“We're already seeing the market for cash loans collateralized by crypto growing substantially through lenders such as Gemini, BlockFi, Celsius,” Purdy added, referencing his firm’s research on the matter. “As more traditional institutions look for higher-yielding opportunities they will naturally gravitate to this market where they may see higher interest payments on loans that aren't necessarily any riskier.”

However, Celsius’s Mashinsky, who recently claimed to run the first profitable major crypto lending platform on the market, reminded Cointelegraph that there are also certain disadvantages experienced by fintech firms that traditional institutions are immune to:

“While many fintech companies are more flexible and faster they do not have access to the 0% cost of capital banks and so generally can not compete on the large and medium size businesses who work with large banks.”

Mashinsky then went on to criticize the design of the PPP, arguing that it gives banks an upper hand when it comes to dealing with the relief program’s applicants. “Banks such as BOA have required users to have an account or CC or a loan outstanding to apply for PPP even though the money is provided by the government and guaranteed by them.”

Regarding the CARES Act, Mashinsky told Cointelegraph, “As usual most of the $2.2T will end up in the hands of the well connected and the too big to fail instead of the pizza shop owner or the barber down the street.” That sentiment echoes other reports suggesting that the PPP is only efficient for companies that have experienced minimal impact because of the lockdown, while businesses that have lost most of their revenue “might be walking into a financial buzz saw.” Nonetheless, the program has only been online for a couple of weeks, and the current deadline for PPP applications is June 30, so the line should not be drawn just yet.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

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

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

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

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

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

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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