Surviving Global Mega Sell-Off
404: Equities and Cryptos Nosedive on Geopolitical and Social Fears
**EMERGENCY POST**
Hope everyone had a good weekend. Buckle up though.
Global markets look horrific. Today’s post will synthesize the most important news updates from the last 24 hours — and there are many to mention. On top of that it seems the globe is falling apart at the seams in a new region every 24 hours.
Global markets are faltering and maybe breaking globally — all major indices had a terrible week as fears of a recession grow, compounded by the tinderbox that is the Middle East.
This week we’re not off to a better start.
Japanese markets went into free fall overnight — MUFG was down over 20% and the Nikkei Index is set to have it’s worst two days of trading in history after it faltered on Friday larger than the black Monday crash of 1987. US Futures are cratering. South Korea halted all sell orders. Whether it was contagion related or sentiment crypto went into an all out nose dive — Ethereum dropped over 18% in minutes. Bitcoin and alts followed as well. Over $800M was liquidated in 24 hours. Those losses surpass $1B as of 9am ET Monday morning — and price is still dropping.
The volatility index, $VIX, is now trading above 65, a level only seen 2 previous times in history. The only 2 times the $VIX has traded above 65 were the 2020 Pandemic and 2008 Financial Crisis (Kobeissi Letter).
The economy in general is beginning to show cracks in the labor market and jobs data.
Goldman Sachs increased its prediction of a US recession in the next 12 months up from 15% to 25% — the labor market is weakening, and major companies are announcing layoffs, including Intel who is cutting 20,000 jobs. Nvidia NVDA 0.00%↑ is officially down 30% from its all time high in overnight trading (Kobeissi Letter).
The UK is breaking out into absolute civil chaos in the wake of the stabbings that left three young girls dead. Immigrant centers are being set on fire, police are raiding homes, and bands of Muslims are roaming the streets with knives, makeshift staffs, and clubs (don’t believe me just check X). Native Brits are lashing back violently in the streets while the UK government cracks down on what they call “ far right agitators”.
This is a unique combination of macro chaos and slipping markets — there is much uncertainty and panic at the moment.
This will be a super important post for traders, investors, and anyone that’s getting a bit worried about what’s going on globally right now. It’s entirely possible the selling is just getting started and we are going to have a long bloody week of trading ahead of us.
The X Factor in this sell off unlike the one we saw during Covid, is that there are multiple factors driving us lower — the situation with Israel and Iran, the spreading fear of a recession, global social unrest, the rising odds of a Kamala Harris victory in November, and weakening economies.
We’ve been covering these concepts for months now in Arb Letter in order to try and give somewhat of head’s up on how things are trending.
Some of the key themes discussed over past months have been:
The opportunity for Defense stocks (which are currently mooning)
The possibility of larger correction before Fall in crypto
The growing threat of a world war sparked by Israel & Iran
The social unrest we are seeing resulting from political and racial tensions
The structure of the upcoming US election
If you’ve missed these posts historically — don’t slack, a large swath of what we cover is tracking as predicted (for what it’s worth). Legacy media isn’t going to call it like it is — instead they will lie, obfuscate, misrepresent, and invoke unnecessary fear. It is more important than ever to have good information and our track record of accuracy speaks for itself.
You need to know what’s actually going on — these are not normal times we live in.
I think folks are starting to realize how dire the times are that we live in — they can make or break you depending on how you approach them and the decisions you make day to day.
Today we’ll cover the latest updates to be aware of as WWIII inches closer, we’ll review just how bad this sell off (and my thoughts on how to come our alive), and touch on the Orwellian riots in the UK. In crypto and equities specifically we will talk about what you need to do in order to survive and make it out to the other side.
Lot’s to cover and time is very much of the essence in this environment — let’s get into it starting with the bloodbath that is global markets.
“Predicting a downturn is not critical. The important thing is what you do when a significant downturn happens.”
— Naved Abdali
Crypto & Markets
Absolute chaos and panic — that about sums it up. Entire portfolios eviscerated, leveraged long positions vaporized in minutes. The markets are in nosedive mode and it’s starting to look concerning for anyone in financial markets.
People are losing SERIOUS money.
The question on everyone’s minds at this point is — are we going lower? If so — how low will markets fall.
I can tell you this.