January 6th Revelations, Russian Offensive
170: Global news and financial markets round up
Happy Thursday folks.
Comprehensive global markets and news updates today.
Excited to announce we are in the process of putting out the first podcast episode through Arbitrage Andy. Looking forward to fielding questions, building out a new medium for our community, and enjoying the perks that comes with not being censored or worrying about people being able to hear and engage with our content.
Feel free to email or DM us questions you want us to answer on the first episode as we will take some time to do a more general intro on our background, aims for the podcast, and some of the guests we will push to bring on.
If you’re liking Arb Letter, the content we cover, and the no nonsense approach we have to covering news, markets, and life I suspect you will enjoy it.
If yall missed our last two premium posts you can read the below - they were some of our most read:
Markets
Jerome Powell testified before congress this week on a variety of economic and inflation related issues.
He found himself having to defend the Fed’s policy over the last two years and he took heat from Elizabeth Warren among others on the potential ramifications of the Fed’s policy and decisions that will hav to be made in the coming months — chiefly as it relates to unemployment numbers.
Powell made sure to reiterate that the Fed has yet. to make a decision on the size of the rate hike when the Federal Open Market Committee (FOMC) meets later in March.
Markets have been less than ideal chopping viciously with more speculative assets like tech and crypto slowly bleeding out below their averages over the last several weeks.
Fears of a recession are growing on many fronts due to trends we are starting to see with cars, homes, and traditionally inflation resistant assets.
Traditional markets have been bogged down. On Thursday, the stock market experienced a momentary increase as traders analyzed remarks made by Federal Reserve Chairman Jerome Powell, and anticipated significant employment data that could significantly impact the central bank's upcoming interest rate determination.
The Bear Traps Report founder Larry McDonald, who is known for his best selling book on the collapse of Lehman Brothers, said this week in an interview with Yahoo Finance that "Our 21 Lehman systemic risk indicators that look at equity and credit point to one of the highest probabilities of a crash in the stock market looking out 60 days”.
Lovely.
The US Yield curve has inverted and has hit the deepest inversion since 1981.
Lebanon's commercial banks do not have enough liquidity to pay back depositors, the secretary general of the country's banking association has said.
Adidas projects their first annual loss in 30 years after the high profile split with Kanye West last year. The company is projecting an estimated $738 million total loss in 2023
Visa and Mastercard have supposedly paused efforts to track gun purchases
42% of typical buy now, pay later users made late payments toward those outstanding loans, according to CNBC
President Biden is calling to double capital gains tax from 20% to 40%.
The Global head of commodities research at Societe Generale, Michael Haigh, has supposedly left the firm according to Bloomberg
Prices for Rolex, Patek Philippe and Audemars Piguet watches appreciated by an average of 20% a year since mid-2018, outpacing the S&P 500 Index, as values for pre-owned luxury timepieces surged (Bloomberg Wealth)
JPMorgan Chase sued former high-level executive Jes Staley over his ties to Jeffrey Epstein, naming him as the official involved in a sexual assault case against the firm. They are attempting to claw back salary and bonuses paid out during this time period
Size Queen Cathie Wood and ARK Invest on Wednesday purchased 51,960 shares of TSLA stock for the ARK Innovation ETF (ARKK) and 17,369 shares for the ARK Next Generation Internet ETF (ARKW) (Investors.com)
Citadel has assembled a strong team of at least 20 of weather scientists within its commodities trading business and i looking to add to the ranks, Balyasny is as well. Apparently the weather team was instrumental in Citadel’s returns over the last two years
Crypto has been suffering from a slow bleed over the last several weeks from further contagion impacts regarding Silvergate and a hesitancy for trader’s to get long with an unclear Fed rate hike schedule.
Surprisingly there have been some lukewarm comments and positions shared that make us optimistic for positive regulatory progress:
The Federal Reserve’s Michael Barr said recently crypto needs guardrails to realize full benefits
Key rulings re: Voyager and Binance have not gone in the SEC’s favor. In addition to the ruling on the Daubert motions in the Ripple case, the SEC has also encountered harsh setbacks with respect to the cases against Binance.US for its acquisition of Voyager and in the case against Grayscale, which started yesterday, over the rejection of a spot-based Bitcoin ETF (Bitcoinist).
Chainlink, Matic, and other alts we like have gotten hammered pretty hard with recent market moves.
Personally unless you’re sitting on a huge wad of cash that you are waiting to deploy we are going to sit on our hands right now and just focus on saving more cash. In our experience most people try to day trade bear markets to win back realized losses.
This almost never works (similar to doubling down or chasing losses at the casino). Instead let’s run through a basic hypothetical scenario.
Let’s say at the height of the crypto bull market you had $50,000 invested in select crypto assets. Now that’s $25,000.
Instead of dwelling on that unrealized loss (hopefully you didn’t sell) you should focus on making more cash. Get a promotion, side hustle, consulting gig, coaching gig, whatever. Find a way to stack and save more cash right now and do it long enough so that you look at that sunken $25,000 position and say to yourself “that’s no longer an amount of money I truly care about” or “I’m okay leaving that position open and forgetting about it until the market turns”.
Easy enough right?
Basically if you’re hurting and finding yourself hyper focused on your big losses, unrealized or realized — just focus the energy and bandwith into making that no longer a major concern. Then, when the sun shines again you’ll have $65,000, and hopefully a fat amount of cash socked away to play with.
I find people rarely make the mistake of over exposure more than once.
While we think everyone should perform their own diligence re: speculative investments but re-emphasize that right now we are largely sitting on our hands to see how things play out with small monthly adds to the S&P500, our dividend portfolio, and our 401K/retirement accounts.
We remain long term bullish on crypto - nothing has changed for us except the need to patiently wait out this regulatory whirlwind and macro conditions impacting legacy markets and the US economy as a whole.
Market Sentiment
"We're not making any real decisions, we're doing kind of early stage experimentation – how would this work? Does it work? What's the best technology, what's efficient – early stage, but we're making progress on technological issues"
— Jerome Powell on a potential US CBDC
"Given that good news is bad news for markets, we think this would likely cause equities to sell-off further and support the case for an outsize Fed hike”
— Citi Economist Alex Saunders (via CNBC)
Global News
According to multiple reports and sources Russia ramped up an offensive last night peppering different parts of Ukraine with heavy missile fire. This comes on the heels of what looks like a key loss in the city of Bakhmut.
Estimates indicate 40 percent of Kiev is without heat and electricity after the morning missile attacks.
In the US this week the big talk of the town was Tucker Carlson’s release of January 6th footage. Our thoughts are below.
The CIA warned Germany and other European allies in the summer about the preparation by a “group” to attack the Nord Stream pipelines — WSJ (WarMonitor)
Ukraine’s SBU security service has identified six more members of Russia’s FSB agent network
Mayor Eric Adams is now telling stores to have customers remove their face masks to reassure store workers they're not criminals after crime rates skyrocket
French senators early on Thursday voted in favor of raising the legal retirement age to 64 from 62
The Pentagon is blocking the Biden administration from sharing evidence with the International Criminal Court in The Hague about Russian atrocities in Ukraine - NYT
North Korea fired a short-range ballistic missile toward Yellow Sea according to the South Korean military and Yonhap
House Speaker Kevin McCarthy has rejected an invitation from Ukrainian President Volodymyr Zelensky to visit Ukraine.
Iran has provided Russia with about 100 million bullets, over 300,000 artillery shells and ammunition for rocket launchers, grenades and mortars and is planning to send more ammunition, according to Sky News
The Department of Treasury said recently that: The US has "successfully blocked or frozen more than $58 billion worth of sanctioned Russians’ assets" (Market Rebellion).
California will not renew a $54 million contract with Walgreens, $WBA, over the chain's decision to not dispense abortion pills in some states where abortion remains legal, per Axios (Unusual Whales)
On March 1 Pfizer and BioNTech Submitted for U.S. Emergency Use Authorization of Omicron BA.4/BA.5-Adapted Bivalent COVID-19 Booster in Children Under 5 Years
China reported a sharp drop in inflation to just one percent marking the 4th lowest inflation rate by country if true. Probably not true lol.
NIH money was funneled through US universities and ultimately funded military research in China
U.S. Senate Minority Leader Mitch McConnell was taken to hospital Thursday after falling at D.C. hotel
The House of Representatives has defeated a proposed measure to withdraw US forces from Syria. The final vote ended up being 103-321.
US lawmakers advanced a bill forward Thursday that is aimed at banning transgender women and girls from sports teams that match their gender identity
January 6th
Lots of large revelations this week on January 6th.
And let’s be clear here, because I know we’re going to get people all up in arms about this - REPUBLICANS as well as Democrats didn’t want the footage released to the public.
Both parties lied to the US public.
What does that tell you?
Tucker Carlson of Fox News broke stories this week related to the 44,000 hours of footage on January 6th given to Fox News by Kevin McCarthy. Regardless of how you feel about Fox or Tucker the video revealed some pretty damning holes and obfuscated facts that the Democrats, select RINOs, and January 6th committee failed to release to the public.
You know the phrase “you only take flak over the target?”.
Well that’s what is happening as the entire mainstream media machine loses their collective minds about the concept of us being able to see all the video from this day. It’s really so predictable.
These idiots are actually trying to tell us that the video is a “lie”.
Video evidence guys…….
The so called QAnon Shaman (Ox Man) who was sentenced to 4 years in prison, was virtually given a tour by Capitol Police the entire time he was present in the capital. They were even trying to open doors for him. Worth mentioning the same dudes who you see week after week shooting people and committing violent crimes in major US cities aren’t even receiving sentences like that.
Tarik Johnson, who was there that day as a former Capitol Police Lieutenant testified that there were many things that simply did not add up — including the fact nobody answered his calls for help. After nobody responded to his calls to evacuate the Senate on J6, Tarik Johnson was fired for being pictured in a MAGA hat (which he wore to safely navigate crowds), lost his pension, and was never called to testify before the J6 Committee.
Also remember that the FBI was asked point blank in front of congress if they used agent provocateurs/insiders on Jan 6th and they refused to answer
Absolute farce.
Hours and hours of footage simply showed peaceful crowds inside the capitol — in direct variance to what was reported by mainstream media for months on months.
It really is quite absurd.
Much to the disgust of some we’ve stood by our initial take on January 6th which is that the whole thing was a Reichstag Fire - esque media opp for the left and the RINOs in DC that are colluding together to form one large elite uniparty
That’s obvious now. January 6th wasn’t worse than 9/11 or Pearl Harbor, it wasn’t this massive violent insurrection that the media repeatedly told the entire nation it was for nearly 2 years. I don’t care how much you despise Trumpers or MAGA red hat fatties — this entire event was grossly misrepresented in the media.
January 6th was amplified and manipulated by key individuals like Nancy Pelosi to put the nail in the coffin on Trump’s legacy, solidify a power transition to the Biden Administration, and most importantly — give the highly politicized FBI and government, the opportunity to jail political opponents and go after so called domestic “extremists” in this country.
Pelosi denied reinforcement requests ( to amplify the problem optically), police let protestors inside the building, the media lied about cops being killed (Democrats knew Officer Brian Sicknick WAS NOT murdered by a ‘Trump Mob’) but they chose to push that lie. Joe Biden's Attorney General Merrick Garland claimed 5 officers were killed on 1/6. This is a literal lie.
You’ll likely remember Twitter took the chance to de-platform Trump despite his calls for peaceful protests, and the entire tech world used this as carte blanche to amplify their already vicious shadowbanning and censorship campaign against conservative politicians and figures online — which has now ALSO been proven by the Twitter Files. The FBI and DHS were both involved.
Isn’t it wild when it all comes together? Again - we aren’t supporting Trump here but our allegiance is to the truth and it’s obvious that this was entirely misrepresented.
Mitch McConnell, Mitt Romney, the whole lot of these guys don’t represent Republican or conservative interests — they are merely in DC to acquire as much power, money, and influence as possible and they are more than willing to throw supporters into the flames to do so.
Do we think the minority of people should’ve been breaking into the capitol, breaking shit, and being a nuisance? No of course not — we won’t deny that.
Bottom line here is that both parties colluded to obfuscate key details and video evidence of what actually happened on January 6th and severely impacted the public’s understanding of what actually happened that day.
Instead of releasing the video and all associated details, thereby allowing all to come to judgement — it was deliberately withheld and lies were propagated to serve political end goals — not so different say, from lying about Covid Origins, Vaccine efficacy, the War in Ukraine, crime levels in the US, and so much more.
Shits getting old and the conspiracy theorists are up 10-0 at this point.
Big government is a massive problem for all of us — left or right.
New Twitter Files
Journalist Matt Taibbi dropped a new series of Twitter Files Today. In it he covers gross oversteps of power by Twitter execs colluding with the government including organizations we are routinely told aren’t compromised or political including the FBI, DHS, NSA, and others.
Matt Explains:
“With other tech firms it held a regular “industry meeting” with FBI and DHS, and developed a formal system for receiving thousands of content reports from every corner of government: HHS, Treasury, NSA, even local police”
The recent #TwitterFiles show the principals of this incestuous self-appointed truth squad moving from law enforcement/intelligence to the private sector and back, claiming a special right to do what they say is bad practice for everyone else: be fact-checked only by themselves.
Pay attention guys.
This shit is serious and it shows how complex and insidious these tech companies are when it comes to policing what you think, understand, and see. As someone who has built a following to 250,000 people on Instagram and is suffering from reach throttling and shadow ban BS, I shudder thinking how bad the extent of this shit is on that platform or for example on google.
Probably much much worse.
That’s half the reason we are launching our podcast.
To make sure people, particularly young people have access to a voice that isn’t going to shy away from the truth, regardless of which side of the political aisle you fall on.
It’s becoming more and more difficult to simply get the true facts on major events and issues that impact all of us and we are going to work to alleviate that issue.
See you all on Tuesday for a deep dive into the 10 things we learned in our time in the financial services industry.
Have a great weekend.
"Our government built a cozy relationship with big tech, they primed them for a hack and leak operation [Hunter Biden laptop], they funded the think-tank which further primed big tech and big media, they leaked information to undermine the good work of two US Senators, and then 51 former intelligence officials closed the deal with their letter. The information op was run on we the people."
— US Congressman Jim Jordan, opening statement for the Weaponization of the Federal Government and the Twitter Files Hearing
*None of this should be construed as formal financial or life advice. I am a former commodities trader and tech sales exec who grew a financial meme page and digital brand. I now commentate financial market developments, global news, and life for over 18,700 investors.
So they want to tax 40% of 0 instead of 20% of 0, nice.
Excellent update / airplane reading material. Really love the news snippets as well and looking forward to the podcast. Keep it up, Andy.