Postcards: About That Grey Swan...

It's not good optics when the largest IT failure in history happens on an options expiration day. But hey... I'm all out of conspiracy theories these days. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: About That Grey Swan...]( It's not good optics when the largest IT failure in history happens on an options expiration day. But hey... I'm all out of conspiracy theories these days. [Garrett {NAME}](floridarepublic) Jul 19 floridarepublic   [READ IN APP](   Market Update: Hoo boy. This one hurt. Somehow, a Southwest put spread we sold at Republic Insider returned all the way back today to finish barely in the green as an overall position, but the IT failure by Crowdstrike (CRWD) through Microsoft (MSFT) updates did a doozy on the markets and the broader economy. This is an important reminder that you must consider the things that fall outside your control and have a plan. --------------------------------------------------------------- Dear Fellow Expat: At the end of the HBO mini-series drama Chernobyl, Valery Legasov (brilliantly portrayed by Jared Harris) makes a stunning monologue before the Soviet courts. After months of investigation into the worst nuclear accident in human history… after a fallout that left large portions of Belarus and Ukraine desolate wastelands… after a near-complete meltdown that could have killed all of Europe… and an incredible effort by nuclear scientists to contain the plant… Legasov has his moment. He’s in front of the cameras… the lights… government leaders… he explains how the nuclear reactor exploded, with a last moment reaction that vaporized all of the water in the plant’s cooling tankers and turned its oxygen into a bomb. At that moment, he explains how the core reactor’s boron-made control rods - the things that are supposed to stop a major nuclear reaction - are tipped with something deadly. Graphite… this metal accelerated reactivity and helped create the chain reaction leading to the explosion. When asked why the Soviet government uses these graphite-tipped rods instead of safer alternatives, he contradicts his previous testimony before world courts… and says, “Because it’s cheaper.” It is a damning moment, the one screaming from the rooftop that Russia’s communist system and his scientific world contradict one another. He was banished for this admission but firmly admits the danger of lies… and centralization. And now… in the U.S. - where we’ve just experienced the worst IT meltdown in our economic history… we must reach similar conclusions. Why are so many people and businesses connected on security patches - overly reliant on the centralized technology and protection software of just a handful of cybersecurity names all operating through Windows operating system. It’s cheaper. Blindly… today, Chief Cybersecurity Officers and people within companies received a software update from Crowdstrike - and they simply accepted the updates. Why? Because it’s easier. On Hackers Today was not a hacking episode. But I remind everyone that years ago, I down with four hackers in a Chicago bar and asked them]( what the most dangerous thing they could do with their cell phones was. I had expected them to say they could turn all the TVs off in the bar and cause havoc (which they later did for fun). Instead, one of them said that with a Raspberry Pi (a piece of hardware) and their cell phone, he could easily shut down Hartfield Airport in Atlanta, Georgia - maybe by overriding the sprinkler system, or just bringing down the communications system of where travelers need to be at any moment. Today is a damn important reminder of just how overreliant we are - in business, in society, in government - on technology. And it’s incredible that people continue to forget so many essential things when the lights go out. It’s not being a prepper to have a landline. It’s not being a prepper to own a generator. It’s not being a prepper to have cash and gold on your person. Yet, there’s still this growing system of people so locked into their digital world - that they may have no idea what the world will look like if and when the lights go out - if and when we engage in a real Digital 9/11-style or Three Mile Island cybersecurity event]( easily our largest threat to society (even greater than COVID). Because there is a very thin line of defense that has stopped these types of events almost every day for the last decade. We had an open trade in Republic Insider that was losing heading into today, and the IT event hurt Southwest (LUV), the airline company on which the trade operated. We made out okay in the end, barely making a gain on the trade but being assigned the stock in the process. The thing is… today was a major options expiration day, and brokerages around the nations were struggling. There needs to be a much harder look at centralizing our networks, systems, and security. We can’t afford another Grey Swan event like today. It was a wake-up call… for everyone. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()