Morning.
I had a feeling it would end up being a three post week with everything going on in the world.
By my judgement it’s time we begin to take a much more serious look at what is transpiring around across the globe.
Something is cooking and it does not look good.
This month we’ve put some solid effort into prepping refreshers which you can find below. These guides cover financial, social, physical, and mental components of prepping for adverse events, black swans, and disruption in the modern age.
19 Things to Have Before You Need Them
Prepping With a SEAL Commander
I am urging you to read them. Take the time and you will be 100% more prepared than you are this morning if something goes down.
Yesterday, after sending out our second prepping guide this month, we saw a whole host of massive developments in markets and global headlines
The crypto exchange Binance experienced the largest financial hack/hiest in history, reportedly being drained of around $6.3B.
Crypto markets dumped hard on the news with Bitcoin now trading around $77,000 and $ETH around $2,250 this morning
Ukraine struck a Russian oil refinery ending the recent truce/pause the WSJ reported this morning
The Pentagon announced that they suspect that a cyberattack was behind freezer malfunctions targeting food supplies at US military bases in late August. Similar freezer attacks happened in France this year
More cyber attacks hit Polymarket, US FEC, and the Florida education system
Big tech is getting clobbered this week. AMZN 0.00%↑ fell over -12%, INTC 0.00%↑ is down 26%, and GOOG 0.00%↑ fell after weak earnings shedding $500 billion in market value
I want to impose upon all of you the 100 foot view here.
AI and technology have clearly exponentially grown the range of threats and risks to the stability of our world. We are seeing new examples everyday and financial markets are beginning to reflect that volatility. There are endless opportunities for things to go wrong online now and that ordinarily wouldn’t be an issue except the entire modern world runs online.
On top of that, we already have a tinderbox of physical real world events like the War in Ukraine, the unrest in the Middle East, and the social tension in Western nations over issues like immigration, inflation, job markets, and living conditions.
A brutal recipe.
This is the kind of game board some folks would likely prefer to just flip over rather than deal with each issue individually if you catch my drift.
It definitely feels as if we are on the brink of a major event.
Why are world governments telling people to be prepared?
What is actually going on with these endless hacks on the internet targeting infrastructure, financial exchanges, and structural organizations?
How do the midterms, Iran, and our geopolitical foes play into it all?
Let’s discuss the events of the last 24 hours to get an idea of what might be coming down the pipe.
The Cyber Threat & Global Stage
Now take my opinion with a grain of salt.
But, as someone who was pretty spot on during Covid and over the last 6 years, my thoughts on what might be coming center around a digital disruption or massive cyber attack.
That could come in many forms. It could be power outages, grid failures, a massive financial sector cyber attack (Binance?), or it could be something even more drastic like an EMP or total blackout.
The big questions:
Is this simply rogue AI or swarms or AI? We know the internet is experiencing unprecedented amounts of attacks. My gut tells me leaders know this is now out of control…..
Is it operating independently or is it being leveraged by someone?
If it is being leveraged or used, is it a country (Russia, China, North Korea, Iran?) or is it a group or organization?
If it is not AI is it a new cyber capability used by the aforementioned groups?
How might governments use this chaos to their advantage (i.e. what convenient solution might they impose on us to “save us” if this comes to pass
And if you have any doubts about the possibility that this could be an intentional or “scripted” plot at hand here, I would remind you of what Klaus Schwab, the founder and executive chairman of the World Economic Forum, said about the threats we are seeing this month.
He referenced a future "cyber pandemic" that could disrupt critical infrastructure like power grids, water systems, and financial networks with consequences potentially more severe than COVID-19.
Huh. Sounds pretty spot on doesn’t it?
So that’s what my gut tells me. This is digital and tech based in nature and that might be the platform or shape this “thing” or “event” ends up taking.
Now again, as I said on X, to me and to most of you, it won’t matter if this ends up being a government operation/false flag OR if it is some organic event put in place by AI, a rogue actor, nation state, etc. The consequences and disruption that a massive cyber event or grid issue would bring to our daily lives is almost inconceivable.
Believe me when I say that.
Most of us are not ready. Imagine what happens if this goes sideways and scales:
Hospitals can lose power
Refrigerated food goes bad
Grids go down
Traffic lights out
Emergency services are crippled
Water plants go down
Supply chains collapse
Financial sector collapses/panic ensues
Gas stations go out
There’s also the CBDC, digital ID angle here if you are looking for a “okay but why"?”.
These are documented plans/ideas, not far fetched theories.
The monkey brained version?
Crash the internet, bank accounts, and markets and then provide the solution……
A controlled, government issued currency that you need to provide a digital ID to obtain. Not so different from a vaccine for a man made virus huh?!
Elon Musk said this week that super intelligence AI agents are going to eventually hack financial systems to obtain money for themselves, not humans (WatcherGuru).
Is it that far fetched to assume that as we sit here this morning there are swarms of rogue AI entities online probing and prodding any potential targets and vulnerabilities?
I don’t believe so. In fact I think that it is likely.
If you have read my prepping guides you know my basic approach to all of this. The only thing I will say is last night with the Binance news I kind of entered a new gear.
There are so many possible black swans at play we have:
A US build up in the Middle East/likely Iran strikes coming
Midterm election outcomes
Cyber/AI Threats
Financial market volatility and potential vulnerability
I will be stocking up on some more basics today.
Water, batteries, oatmeal, peanut butter, powdered milk for the baby, etc. Things I normally like to have a stash of anyways. No need to go into full on panic mode, but I think it would be foolish to ignore all of these signs and events and then have to go scramble when the normie hordes finally realize it is the real deal. Worst case you have extra shit you use anyway. Worst case you are blindsided entirely.
That’s not a spot to be in.
My advice is just take some of these threats seriously.
Sure it might be fear mongering before elections, or psy ops, or noise.
But in the off chance it is not, don’t be caught entirely unprepared and clueless.
Financial Markets
You can’t win em all and this week is a good example in tech stocks.
A few of the names I highlighted in my dip buying guide got hit hard including INTC 0.00%↑ . The Trump Admin’s stake is now down about about $11.34 billion…. Long term? Maybe it is an opportunity but for the moment it’s clear Wall Street’s ambitious expectations are driving down some of the AI run darlings.
But it’s not just Intel. The entire market and the big dogs are getting clapped. Macro Paper reports $3.54 Trillion has been wiped out from just 5 Magnificent Seven stocks since their all time highs…..
Wild stuff.
Full transparency I will be buying more of INTC 0.00%↑ today but it was a surprise for most. I also added some SCHD 0.00%↑ to boost dividends. I also like the relative strength from some defense names like LHX 0.00%↑ and LMT 0.00%↑.
Global equities, particularly in tech and AI are getting murdered. The Chinese CSI 300 index has officially fallen for 12 straight weeks. About $2.4 trillion in market value shed since the May peak according to Bloomberg.
At the time of me writing this (about 9:47am ET) the Nasdaq is down almost 3% and the S&P is down 1.2%. Don’t be surprised to see more dumping today.
And to top it all off Jim Cramer tweeted “buy”. So who knows maybe this is just the beginning of this nasty flush.
My gut instinct tells me this is a great fear driven sale to buy into, I just wouldn’t get overly enthusiastic or reckless.
Crypto was looking phenomenal yesterday as Stan Druckenmiller shouted out HYPE Hyperliquid in his first tweet ever (and Elon replied “interesting”). PEPE was ripping, ETH was looking better, and then we got hit with the Binance hack. Liquidations hit about $1.6B in 24 hours according to CoinTelegraph.
A culprit is still being tracked down by blockchain investigators but TRM Labs is saying it was North Korea’s elite hacking unit TraderTraitor.
Not sure if I buy that and wouldn’t even discount Binance themselves being involved. Who fucking knows man.
I don’t. But this was a massive blow lol.
Could this be the bottom for crypto?
Potentially, if there aren’t repeat instances of hacks that further scare the market. This rhymes a bit with the FTX blowup that marked the market bottom years ago and you would be hard pressed to find a time in the last two years when panic and fear were higher.
Particularly if you factor in the AI hack black swan FUD. Michael Saylor said this morning on X:
Binance has committed its own balance sheet to making customers whole. I expect it to deliver. Our industry will learn from this incident, strengthen security, and emerge stronger and more resilient.
PEPE looks phenomenal this morning and I think it could be a sign that some memes will begin to move without the broader majors rebounding first. Around $35M of PEPE was stolen in the Binance hack and the price barely moved at all.
In regards to BTC/ETH you could reasonably make the argument we’ve held up decently well all things considered. In the past these types of events would lead to instant 15% or 20%+ drops.
I can only reiterate my longstanding advice to you.
Spread out any buys, and do not fully ape what you think is the exact bottom. Keep some more dry powder ready.
Don’t just diversify your investments, diversify how and where you hold them. Multiple bank accounts, multiple crypto cold storage devices/exchanges, and physical metals/cash as well. Spread it out.
If it all goes offline then it doesn’t matter anyway right?
I know it can be unsettling but take these basic steps and you will sleep better at night. As far as broad market sentiment? I am waiting to see how the Midterm/Iran saga plays out. That, and seeing if this “happening” comes to any sort of head before EOY.
I am happy with my current allocations across crypto and equities and I won’t catch any falling knives with the exception of some fire sale buys on names I love like AMD 0.00%↑ PLTR 0.00%↑ and AMZN 0.00%↑.
I would ask you guys, if you are up to it, to share Arb Letter with like minded friends and family. If you think there’s someone in your life (who you care about) that could benefit from some of this information/commentary send it over to them.
Knowledge really is advantage these days and most people don’t know where to get the latest information to inform their decisions.
The point of all of this is not to panic, but to simply be ready for what might happen next. You’re always going to have people who scoff or mock people who want to be prepared.
People joke about the “nothing ever happens bros” and there is some truth to that.
But eventually they are wrong. That’s fine if it’s a hiccup but if it is a larger prolonged event? Not so much.
I believe in providing you guys with the sober reality of our world, not some watered down version of feel good vibes in the face of real issues and developments.
Hopefully you are starting to understand that “prepping” is really just a way of living and viewing the world. Staying aware, working to hedge what you can, and understanding that we now live in wild times where anything can happen.
Have a great weekend. Decompress a bit. I will be playing some Call of Duty MW4 and monitoring the situation. Tonight I will be in the tequila soda vortex by 8pm dressed as Batman.
Make sure to follow on X and join the Discord if you want to make sure you get any breaking news or updates that come in over the weekend. I will see you all Tuesday.
Andy
I’m just tired, boss. Everyday we’re raped by retarded insane news in this sick fucked up world, and it’s gonna get so much worse. Just had a baby last month