Things Are Escalating Faster Than Expected

248: Good Ole Fashioned Texas Standoff

Jan 26, 2024

Happy Friday all.

Hope the week is going well.

Quite a bit to cover today - but quick side note.

I took some steps to consolidate all the content I have online into one central place. This includes product recommendations (that I’ve covered in Arb Letter before), my Instagram for financial memes, my Twitter for politically incorrect takes, the Arbitrage Andy merch store, Book guides, and much more.

You can find it all HERE.

Before we get into an overview of the situation at the Southern Border today — I want to highlight that Arb Letter has been on top of this indicator and scenario for some time. Several of our older posts touched on these themes WELL ahead of mainstream media sources and influencers.

If you’re interested in getting this commentary before it breaks — consider subscribing.

Global Markets

Markets continue to rally for equities with a mildly underwhelming performance from Bitcoin and other crypto assets after the major ETF approvals earlier in the month.

BlackRock holding webinar tomorrow about Bitcoin for financial advisors, calling the ETF approvals “a pivotal moment for investors" (Bitcoin Archive)
Paramount’s CEO announced layoffs this week as cost pressures, and talks about going private build - CNBC
US Government files notice to sell $130 million worth of Bitcoin seized from Silk Road
Microsoft is laying off roughly 1,900 people, or about eight percent of staff, from its gaming division

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Nvidia, $NVDA, Microsoft, $MSFT, Google, $GOOGL, announced they have partnered with the US government on AI research programs and developments
Yahoo Finance reports that Amazon founder Jeff Bezos saw his wealth increase by about $70 billion in 2023, which is the equivalent to $191 million a day or $7.9 million an hour (Spectator Index).
The White House announced a "temporary pause" on pending approvals of American LNG export terminals.

On the equity front I am sitting comfy with long plays on MSFT 0.00%↑ AMZN 0.00%↑ and NVDA 0.00%↑ that I have held for some time. They make up 65% of my long term brokerage account. As one of our subscribers noted — gun and ammo stocks may not be a bad play given the growing insecurity and potential for unrest this year in the US and around the world.

If you are finding yourself unimpressed with crypto price action since ETF approvals you’re probably not alone. It’s easy to get caught up in the hype and think that we are going to teleport to $100,000 the same day that the ETFs go through but this isn’t realistic.

To be frank, I am not really surprised we’ve seen chop and sell offs since then — there are a number of major institutional players dumping large amounts of Bitcoin and sentiment is still mixed at the moment.

The halvening is approaching in April and we know that the ETF providers have cited massive demand for Bitcoin products since approval. This is simply the shake out period. As usual in crypto markets weak hands will be rinsed and the whales will continue to accumulate in preparation for the coming bull run.

My strategy is simple — continue to acquire BTC/ETH and other blue chips and wait.

Panicking now will short hand you when these assets rapidly appreciate later this year.

Global News

While the border crisis in the united States is relatively uncovered in mainstream media it is commanding most attention on social media and X.

Outside that here are some noteworthy global news updates to be aware of.

Trump White House official Peter Navarro gets 4-month sentence for defying House Jan. 6 subpoena (AP News)
BLM protesters who participated in 2020 riots will receive $10 million from Seattle

Bloomberg reports Putin is seeking to signal the US that he's open to talks about ending Russia's war in Ukraine
A national survey by the PRRI reveals that ~30% of Gen Z adults in the U.S. identify as LGBTQ (MacroEdge)
The Florida State House has passed Bill HB 1 to ban kids 16 and under from having social media accounts
Biden last week pressed Netanyahu to scale down the Israeli military operation in Gaza, stressing he is not in it for a year of war (Axios)
18-29 female voters who face little future of having children & family formation are turning to socialism and communism at the fastest pace in 30 years (MacroEdge)

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Troubling trend above that may give us some clues into the rapid deterioration of Western societies — entire voting demographics are changing based on societal trends.

Border Crisis & State Secession

Well folks looks like we have a good ole fashioned Texas standoff (if that’s a thing).

The crisis at the US Southern Border is transforming into what will likely be the top issue for voters in 2024 if it isn’t already.

If you’re not up to speed the following has all taken place this week — the Supreme Court supported (in a 5-4 vote) federal agents in their effort to dismantle razor wire installed by Texas along the Rio Grande — in other words the Federal Government and supreme Court supports REMOVING barriers and wire sealing off the US border.

Think about that. Think about WHY that’s the case.

If you do you will realize it makes little sense.

The state is employing both wire barriers and state agents to prevent Border Patrol from reaching a specific border section in Eagle Pass. Homeland Security is insisting on gaining access to the area by Friday with an ominous deadline put in place by the Biden regime.

To be 100% blunt — this shouldn’t even be a discussion. Developed nations and countries with an interest in security, longevity, and safety of it’s populace support proper borders and immigration procedures. That’s not at all what’s been happening at the Southern border.

To put the size of this issue into context let’s look at some numbers:

A record-setting 3.2 million illegal aliens were “encountered” nationwide by the Department of Homeland Security in fiscal year (FY) 2023, surpassing the previous high of 2.7 million illegal alien encounters nationwide in FY 2022 — though the number of un-captured or recorded illegals is likely much higher
The government estimates about 600,000 migrants crossed the southern border without detection. Christopher A. Wray, the F.B.I. director, acknowledged that the increase in encounters with people associated with known or suspected terrorists was reason for concern (NYT)
Since Biden took office in the US, over 6.2 million illegal aliens have been encountered at the nation’s borders

What I don’t understand is how people don’t look at the basic math and begin to panic. We are letting in millions upon millions of illegal, unvetted, and unreviewed people from countries hostile to the US, countries with severe war and violence, and countries that have actively sent the worst they have to offer — criminals, narcos, and rapists.

Where do people think they’re all going to go?

Who’s going to feed them?

House them?

Track them?

How is this sustainable in critic’s eyes?

Hospitals and Democratic “sanctuary cities” are being entirely overwhelmed. Even hyper far left politicians and mayors are saying there’s a problem including Brandon Johnson from Chicago and Eric Adams of NYC. I can tell you from personal first hand experience illegal migrants are all over Manhattan.

But it’s not just a capacity or infrastructure crisis — it’s a security threat of the highest possible level.

12 miles east of Sasabe, Arizona a man of middle eastern origin made threats to a reporter who encountered him at the border. He responded to inquiries from the reporter:

"If you are smart enough, you will know who I am, But you are really not smart enough to know who I am, But soon, you’re gonna know who I am.”

Pretty sinister threat.

Turns out — this guy is a terrorist. Movsum Samadov, head of Islamic Party Of Azerbaijan. He was sentenced to 12 years in prison on October 7, 2011, for attempting to overthrow the government and setting up a criminal group to plan terror attacks.

These are the people who are slipping into our country. Sounds like a good idea.

In an FBI memo that surfaced this week we can see that the FBI warned about the threat of militants and insurgents amassing inside of the United States as a result of the current admin’s border strategy. Within the memo from multiple Special Agents and Directors at the FBI, the threat of terrorism and unrest is cited explicitly:

In 2021, the demographics of those crossing the porous southern boundary started to shift. Young men from around the world traveling alone and holding questionable motivations dramatically increase in number to become the most common profile of those breaching the nation’s borders. A startling number have been found on the terrorist watchlist or are from countries designated as State Sponsors of Terror distinctly unfriendly to the United States.
It is stark to say so, but having a large number of young males now within our borders who could begin attacking gatherings of unarmed citizens, in imitation of the 10/7 attacks on Israel and at the behest of a foreign adversary or terror group, must be considered a distinct possibility. We would be remiss not to call out this potentially grave threat in the most direct terms. The warning lights are blinking.

Never mind housing or accommodation issues — need any more proof that this is a critical threat to the US?

As of this morning - 14 other states have pledged support for Texas — including Arkansas, Florida, Iowa, Idaho, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Virginia, West Virginia, and Wyoming.

It’s not just the Southern Border anymore either — yesterday illegals stormed the beaches of La Jolla, California in a smuggling boat and then abandoned the boat before running into the city, completely untracked.

Those who are paying attention understand how serious this escalation is in Texas. You have multiple states backing Texas and providing troops and supplies. Texas has openly defied the Supreme Court and Federal Government (rightfully so in my opinion) and now the ball is in Biden’s court. In my opinion this is a lose lose — either there is an incident between National Guard troops and Feds or Biden detains and imprisons Abbott to make an example of him.

Either outcome is sure to generate unrest and outrage.

Former President Donald Trump — the clear frontrunner for President — has been asking GOP governors to deploy National Guard troops to Texas to assist the state in it’s defense of the border.

The main issue at hand is 50% (maybe more) of the country believes the current regime is illegitimate and actively facilitating the subversion of the United States. Members of the other 50% has made it quite obvious on social media that they are okay with violent action against the states and groups taking a stand against this absurd border policy and situation (see below).

The ease with which these individuals give their blind allegiance to the Federal Government — a regime that has continued to contribute to the collapse of this nation is frightening. Worth mentioning that these are the true fascists — those that would side with an oppressive regime to silence and in some cases, eliminate, opposition.

One thing’s for sure — this issue is going to accelerate division in this country and potentially lead to some monumental actions taken by the Federal Government or states that have sided with Texas.

We will continue to keep you guys up to date on developments but this situation merits close monitoring due to it’s capacity to spill over into the US Election and potentially end in legal or physical conflict.

Hope you guys have a good weekend — next week will surely be an interesting one as this event develops and markets potentially give us an indication of what’s to come in 2024.