10/22/26: Troops Evacuated Amid Iran Escalation, Prof Pape ON Trump's Iran Gamble, AI Cybersecurity Nightmare

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Over breakingpoints.com you can sign up for the newsletter at the top for free today good morning everybody happy thursday we have an amazing show for everybody today what do we have crystal Holy.

Moly, there is a lot going on in the world, abroad, everywhere in between. Things looking like they may pop off very soon with Iran. Trump making new threats. Netanyahu also making new threats. Troops and diplomats are being evacuated from the region as we speak. So we will bring you all of the news updates. And then Professor Pape is going to join us for his analysis of the calculus that Trump is going through right now. He's prepared a PowerPoint, I understand. So I know everyone will look forward to that.

We've also got crazy things unfolding in the cybersecurity world. It's being called Black October and being described as the most serious cybersecurity incident in history. So we'll break down what we understand about what is going on there that could affect as many as 70% of all websites worldwide. We also have our eyes on the midterms. Rich Barris, who is a MAGA-friendly pollster who's gotten a lot of things right, has been sounding the alarm about Republicans.

He's going to join.

Us to do a deep dive into what he's seeing in the polls. There are a lot of new polls out this morning. There was a big poll out for The New York Times. Sienna yesterday that's taken very seriously that shows a massive Democratic lead on the generic ballot. And we're also going to get him to weigh in on the impact of that deplorable, disgusting, vile ad that Vivek Ramaswamy released yesterday about Amy Acton and her mother.

There is a mounting backlash growing, including from other Ohio Republicans.

So we'll get into that.

And then we've also got our eye on the housing market where sales have just completely collapsed. You've got mortgage rates, obviously, that are really high.

So we wanted to keep an eye on what is going on there as well.

Yes, big picture, very important, obviously, especially in all of this economic turmoil. Thank you to everybody who has been subscribing to the show, BreakingPoints.com. We've got our free month trial going on. I just checked the numbers. We are more than 50% of the way there for our Fish Show concert. A reminder, Ryan Grimm will attend the Fish Show at Madison Square Garden, and you could be one of those people. If you're one of those 1,000 who signs up, you can bring a friend and our existing premium subscribers. Remember, you guys need to encourage people to go out gift subscription or something because you will also be included to be eligible along with a guest. Seriously, thank you to everybody. We got an overwhelming amount of

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It really helps other people find the show. But as Crystal said, we're going to start with the chaos in Iran. Significant amounts of news that is breaking overnight. We're going to start with this from NBC. Let's put A1 up here on the screen. Multiple outlets, including Agence France-Presse, which was the first to do so, coming out and saying that U.S. troops and diplomats are now evacuating the Middle East.

So you have Saudi Arabia, Bahrain, Qatar, and Jordan evacuating where you had multiple people who were told to leave, usually family members, dependents, and non-essential staff. Remember, the United States got significant amounts of criticism for launching the war on February 28th, where not actually pulling many of the dependents and families out of the region, which caused significant amounts of chaos after flights were canceled and there were drones launched. and missiles flying everywhere. And now by issuing this order, we can combine it with multiple other pieces of news. Let's go to the next one, guys. This is from our friends over at Dropsite. This is A3, actually.

And it's very important, this interview. Shout out seriously to Jeremy Scahill, who landed this interview. Brian Grimm as well, where they say Iran believes the U.S. and Israel may strike before the midterms. The top security official, General Raisi, tells Dropsite Iran has new targets in its sights. And really, I think what I want to focus on in this interview is Iranians' belief that if you look, and we will get to this from The New York Times and others who are reporting about these purported strike plans, which are there about previous attempts from Netanyahu and other statements.

It seems all but certain that a renewed bombing campaign is going to happen. The only question is whether it's going to happen before the midterms or after the midterms. So in this interview, General Raisi lays out a couple of different things. Number one, he says a goal is not to survive until the end of Trump's term, but to reinstitute or basically reestablish. reconfigure their entire deterrence to the Western world. They do not view this as a Trump problem. They view this as a Western world problem from France to the EU. Remember who before the Iran war were themselves quite hawkish on Iran. Number two is that they still remain open to the memorandum of understanding.

They just want it to be properly implemented. But number three, and this might be the most significant, Iran is ready for the war and will retaliate. Civilian infrastructure will also be a target. And also data centers basically saying we will take aim at any institution or others which is supporting the U.S. war with Iran. And, Crystal, that fits exactly with what the renewed strikes on Iran would look like. Remember, any expansion of strikes are going to fulfill the Trump promise of hitting critical energy infrastructure. Now, in some ways, you know, Iran or at the very least, you know, the Iran axis, I guess, whatever you want to call it, has already been doing that. I mean, literally, while you

and I are recording this, the show this morning, we get the news that Saudi Aramco has just told all of its Dharan employees, yeah, you guys are all working from home, which I don't even know how that works. I don't even know if you can pump oil from home, but you know, maybe you can. But nonetheless, critical infrastructure has already been hit. Energy infrastructure, the East-West pipeline by the Houthis, it remains a civilian infrastructure target of the United States and of Israel. And the open question now is just before or after the midterms. All of this news this morning, sending the stock market cratering by at least a percent in the future and Brent crude oil up to one hundred and twelve dollars per barrel, which

will easily hit four fifty a gallon in the next couple of weeks or so if that sticks.

Yeah.

And between what's going on with the Iran war and the cybersecurity incidents, the stock market is really in a kind of free fall this morning. And to your point, oil prices spiking. It's worth noting a couple of things about this drop site article as well. They rely primarily on sources from within Iran, but they do mention that also they spoke with a U.S. official who believes that U.S.

and Israel are preparing to resume attacks on Iran and may even launch operations before not just our midterms, but next week's Israeli elections. OK, that happens next week in mere days. So there is a lot going on there. And we'll get to in just a moment the way the Israelis are intentionally trying to provoke and intimidate the Iranians with some provocative military maneuvers. But I think that's really significant. And then the other thing Ryan keeps pointing to is he said, take a look at the White House's statement. They say that the White House, that the U.S.

administration is not planning any strikes before the midterm elections. They don't say that Israel isn't. So very noteworthy the way that their denial here quoted in this piece was ultimately phrased.

Exactly. And, you know, the denial is fits entirely with what we know. Before we even get to the New York Times, we of course need to look over at the Israelis. The Israeli election, unfortunately, may have more influence over all of our decision-making than our own elections. Let's put A4 up here on the screen. This was some very noteworthy comments from Netanyahu. And for the 99th time, probably, in Netanyahu's history, he says, Tehran is now beginning to develop nuclear weapons. And Katz says, If Iran attacks Israel, Iran will burn. The Iranian regime still has not learned his lesson. Moitaba Khamenei has decided to follow in his father's footsteps. He has taken off the safety, and Iran is once again trying to develop its weapons of death,

Netanyahu said at an IDF officer school in southern Israel. Quote, therefore, there is only one way to remove this threat once and for all, to topple the regime, and that is my directive to the IDF, the Mossad, and the security agencies. The defense minister also said, quote, in recent days, we have identified attempts by our enemies, foremost among them Iran and its proxies to carry out terror attacks that would affect the results of the elections in Israel. The Iranian regime is at its weakest point ever, and we identify that weakness could lead to it to make the most extreme measures. So that is obviously very important. Now let's put some of these other pieces together, some other indications

of just how close the United States is to reengaging Iran. Let's put A5 up here on the screen. So it appears that while Pete Hegseth was visiting Israel two days ago, that they conducted one of the largest Air Force exercises in Israeli modern history. This exercise took place, quote, beyond Israel's border and was directed by the IDF chief of staff and the Israeli Air Force commander from the IDF Underground Command Center in Tel Aviv. Both Netanyahu and Hegseth closely monitored. the exercise. We do not have the full details.

What we do know is, let's put A6 up here on the screen, is that this was a power projection operation near the Iranian border 800 miles away from Israel. We're not exactly sure which border here that they're talking about. We do know that the IDF path consistently flew through Syria, Syrian and Iraqi airspace. As the aircraft approached the border, they turned around and returned to Israel. Obviously, this was a probing operation to test Iranian air defense systems, to basically do a practice run for what we now know is a planned massive bombing campaign by the United States and Israel. The only question is when those plans will be enacted, Crystal. And I do think it's very important to talk about the logic of this, and it fits

very much with Professor Pape's analysis. It is a literal carbon copy of everything from the first 33 days of the war. It's a short bombing campaign. It's three days. They will just go in, we'll go in, we'll take them out, come back. They're not going to do anything about it. And it just shows we are stuck right back in the same stupid place. They're like, this time they'll give us concessions, even though they have been hardened more than anything over the last eight months and are even more in an existential crisis for themselves.

Yeah, let's go ahead and take a listen to Trump on what his plans are. You know, obviously, the White House put out this very definitive statement to Dropsite and has been leaking to the press that, oh, no, we're not going to do anything before the midterms. But Trump sounding a different note yesterday. Let's take a listen.

Well, against Iran, we have a little we have a little conflict against Iran. I think I'll send Evander the real deal over there. but we're doing very well militarily and financially against Syria.

Is there any developments with those negotiations? I mean, are they ongoing with Iran at this?

Iran?

A little bit, but we'll see what happens.

Are you over it? Are you over negotiating with the Iranians at this point?

No, I think we're not negotiating with them. We are going to have something one way or the other that will happen fairly soon. Most people seem to think it's after the election, and we're going to see what happens. But I will say this. What we've done with Iran is amazing.

So Trump there saying we're not negotiating, something is going to happen fairly soon. So a lot of very negative and troubling indications there. And then you've got to factor the Israeli election situation for Netanyahu into this whole thing. Guys, go and listen to Ryan and Emily's interview with Noga yesterday, evaluating what the political landscape looks like in Israel.

Netanyahu is not doing well in the polls right now.

You really think he's just going to sit back and accept some form of defeat on election day?

No.

What does he do when he's in trouble, whether it's politically or whether it's with his corruption trials? He goes to he starts a new war. He starts bombing something. He creates some sort of a security incident. So that he can once again either push off the impending doom for his political future or to be able to posture as I'm the only one who can keep you safe from these threats. So would it be any surprise if Netanyahu's October surprise is, by the way, we're going to go back to war with Iran. And of course, what Sagar was talking about before, that he's already laying the rhetorical groundwork talking to IDF saying, hey, they've decided once again they're going to develop nuclear weapons. It is a

very dire landscape when you take a look at these things. Some of the speculation, Sagar, about what was going on with that show of force from the Israeli Air Force was that they may have actually been hoping to provoke a response from Iran and that would give them an excuse to go back to an all-out bombing campaign. They were hoping the Iranians would actually fire at some of the jets that they sent over near their border and may have been disappointed that there was not such an attack that would give them a ready-made excuse for going back to war.

Let's put actually the New York Times terror sheet up here on the screen, which details so much of this. This says, U.S. and Israel draw up plans for renewed strikes on Iran after the elections. I've teased some of the details, but I'll read it again. Planning for a short but intensive progress, the U.S. and Israeli militaries are stepping up the exercises, flying planes to practice strike maneuvers, and meeting at the highest level between Hegseth and Netanyahu.

The targets would include Iranian energy infrastructure, nuclear facilities, missile and drone arsenals. Some officials say that one more big round of attacks could push Iran's economy over the brink and force the country to make diplomatic concessions after eight months of conflict. But of course, there are reasons to be skeptical. They say it is far from certain Trump will approve fresh strikes. Repeatedly, he has now vetoed plans for a return to major combat operations, including this month when the U.S. and Israeli militaries were already ready to attack.

This apparently happened about 12 days ago on October 10th. And when there was a planned renewed strikes, both from the Israelis and from the United States, That is when Trump put out that message saying, hey, there will be no strikes before the midterm elections because he's caught in this vice. I mean, even the leaking of all of these plans demonstrates that the news itself is enough to send the price of oil skyrocketing to some hundred and twelve dollars per barrel. And if you do have a renewed strike, not just renewed strikes.

Remember this.

You know, the first U.S.

Strikes happened.

With Israeli strikes, it was supposed to topple the whole regime in 48 hours. They literally believed that. I mean, completely idiotically, right? So 72 hours of strikes, rough strike plan, we'll take out the energy infrastructure. And then miraculously, Tehran's security infrastructure will decide, you know what, this time, after all these bombs, after all of this, and after all the blockade, this time we'll pursue diplomatic concessions. I mean, It is completely delusional. But that appears to have basically, you know, Trump appears to have somehow been convinced of this.

At least that's what's coming out from the Israelis. Obviously, you need to take all this with a grain of salt. A lot of this could be leaving leaked for different reasons. Let's put a seven up here on the screen. This is from the Israeli media. They say White House sources in the past few hours, there has apparently been a change in the American position in favor of a, quote, preemptive strike on Iran. White House sources explain the change mainly due to the great weight that Trump gave the assessments and intelligence that Hegseth presented to him upon his return from Netanyahu. And so obviously we know exactly what this is, is that they ran the exercise. Then what they probably said is Netanyahu, especially you can just imagine

him sitting there, of course, in his perfect English, talking to Trump and to Hegseth and be like, look, they couldn't shoot us down. They can't do anything to us. You know, look at them. You know, we were able to do this massive sortie of right around their border, come and back 800 miles. This shows the air supremacy, you know, that we didn't have the last time around.

And they're weak. And obviously, if you're Iran, they're cautious. Like, that's ultimately what doesn't fit with a lot of their narrative. They don't want to be bombed. So, no, they're not going to just shoot down all these planes, unless they actually do cross into their border, they're basically in a waiting game with the Stratiform Moose and trying to choke them off in a vice, all while trying not to be bombed themselves and just have all their energy infrastructure destroyed.

But if it comes to that, they have plans that are ready-made to hit all of this other civilian infrastructure all across the Gulf. And I mean, I think people just don't understand that in the White House. One thing, you know, that's possible, all of this is being leaked. potentially, for, you know, to try and push Tehran again to come to the negotiating table. It's not going to work. Every single time they come out and they reject it. I take a look at the drop site interview. I mean, if you're going to talk about credibility, they have a lot more credibility on this subject. They don't care. Tanker for tanker. OK, fine. We're just going to keep shooting.

And guess what? You're the people who ultimately we called your bluff and you haven't bombed us in 20 days or something like that.

So.

You know, I take their word much more than anything from the U.S.

Side.

And we'll see, obviously, where this goes. But it's nothing good. It's not good.

I have a black cat perched over my shoulder now as a sort of a bad omen, I guess, of what things, how spooky bad things may get. Yeah, I mean, look, you may look at this and go, could Trump really be this stupid? Could he really be this stupid? Like, how many times does he have to stick his hand in the fire to before he realizes this war is a disaster, there is no military solution here. If you try to bomb them, it is very, very, very, very likely to just make things worse than they already are.

Could he really be so dumb as to do this?

Especially days before a midterm election where he is already set to have his party completely wiped down, as we will discuss with Rich Barris later in the show.

And the answer may be yes.

And this is a good transition to Professor Pate because he has all of the logic of how this could go down, sort of spelled out, including how the political dynamics factor into the equation. But Trump is in a corner. He has no other way out. He may be susceptible to once again, Be convinced by the Israelis that this time it's going to be different. This time you'll be able to secure some sort of a victory that's going to force the Iranians to make concessions they haven't been willing to make so far. This will give you the ability to declare mission accomplished going into your pivotal midterm elections.

Is Trump that stupid? It is absolutely possible that we will.

Find out he is.

Yeah, and I actually will highlight from our friend Dr. Trita Parsi. He says, I have pointed out many similarities between now and February when the U.S. was engaged in diplomacy, but Trump had already decided to attack. There is one significant difference. Back then, Trump was driven by hubris and criminally erroneous Israeli advice. Today, he appears driven by another emotion, revenge.

There is a vindictive element to his calculations because of his anger over how Iran has ruined his presidency. and he is likely to suffer humiliation in the midterms. So the push toward a new war is no longer being driven by a flawed geopolitical calculation, but rather by one man's need for revenge against a country that Trump himself chose to attack. I actually think that's very important because you're asking about the stupidity that assumes rationality and calculation.

That's just not what's happening. I mean, I think he has literally been stewing in the White House for the last three weeks, after ship, after ship, after ship, after ship has been struck in the Strait of Hormuz. And he's like, I can't deal with this anymore. And so a lot of that is actually very understandable. I mean, you ask, you know, how could anybody be this dumb? Unfortunately, we have so many examples that we can ask even Professor Pape about throughout history. Lyndon Johnson was much smarter than Donald Trump, and he fell for this exact same problem.

There have been many leaders throughout our history who reached for the bomb because they just can't stomach the alternative. And, you know, here we are again. The last thing I want to mention is about Saudi Arabia. Let's put A8 up here on the screen, where you actually had two foreign nationals yesterday who were killed and two others who were injured after air defenses intercepted a drone attempting to target the facility of Saudi Aramco in one of their oil fields. As I said, Aramco this morning had issued a guidance that some of their employees were should be working from home. And in addition to all of that, you have multiple other strikes at different airports and at different oil facilities in Saudi Arabia overnight. Remember, we are

not getting the full picture. There's no video. There's nothing because they will literally throw people in jail, even American citizens, for recording any of this stuff and for reporting it back to us. So that is also a very significant part of the picture. And it's putting huge, obviously major pressure on oil prices this morning. So you put all of that stuff together and markets and others are poised potentially for a major dip, you know, if hostilities do completely break out again. And on top of that, oil is now, there's no slack left in the system. It's been nearly eight months now left of this. If we do resume complete hostilities and there's just no more exports, anything like that, we will reach potentially catastrophic levels after

a few more months of something like this, of actual all-out war. It'll be horrible. Joining us now is our great friend, Professor Pape of the University of Chicago, to discuss the ongoing geopolitical situation. Professor, thank you for stopping by again. We understand you've prepared some slides, which I know the audience loves.

Well, yeah, so everybody's watching what's going to happen on November 3rd.

I'm looking forward.

What are the implications of November 3rd for after November 3rd? And I think they're quite important. They're very important to put in front of people. And this is what I'd like to do today. So the central question is, will Trump roll the dice? You see, people are talking a lot about Trump's incentives, but I don't think they're quite getting it right. And mostly what they're doing, folks, is talking about it from the chess game version of strategy, which is an important version, an important dimension, but they're missing the domestic politics driving U.S.

Strategy.

We are in an escalation trap. We're not just simply playing a chess game with Iran. For eight months, we have watched as a limited strike led to Iran gaining power and then U.S. doubled down in a whole variety of ways. And now Iran has been gaining still more power. And the key question is, is America going to accept defeat or are we going to escalate? And notice that so far, every rung on the ladder, Washington has gotten weaker.

So this is not about is there a way out of the war to get victory? The best way to understand the escalation trap is not as a chess game. Think about it as roulette. Think about it as a gambler who is losing. And then as the gambler loses, does the gambler just walk away or does the gambler double down? Put more chips on Red 36, looking for a spectacular strike to make amends and actually come out ahead, looking for the one spin that wins it all.

Well, we've seen this in history. So a lot of.

People wonder, how could Japan attack America at Pearl Harbor? Well, this is something I teach long seminars about at the University of Chicago. We have all the documents, folks. Japan did not go into this sleepwalking into a major war, not understanding America could come back and club it.

The other way around.

You see, what happened is Japan had already been making moves. Americans don't really pay attention much to that until Pearl Harbor happened. And that had led to Japan being in an escalation trap. And then they were about to see their regime crumble because the oil embargo was crushing.

That's what led them, that deadline, to double down.

We saw this in Vietnam, a series of escalations by Lyndon Johnson. And basically notice him saying, I'm not going to be the president who saw Southeast Asia go the way China went. That is a major tell here. They are betting in both cases that because they're going to lose everything, there's a small chance they can win. That's why they're putting the money down.

And what are we seeing in the new polls that just came out yesterday?

Across the board, it doesn't really matter whose polls you look at, which is this is a political.

Bloodbath coming for the Republicans.

And it is all dramatic. Now, of course, there can be the shy Trump voter. We don't know for sure what's going to happen, but expectations are driving the train. And those expectations are a political bloodbath coming on November 3rd. And that means that President Trump, what he does next is going to be driven in large part by these expectations.

And for President Trump, causing chaos through escalation in Iran, this is a risk he is increasingly likely to accept.

You see, if he doesn't.

Create some change to the game politically, then he faces a certain loss, a crippling loss, not just for other Republicans, but for his administration with subpoenas as far as the eye can see, likely removals of cabinet members, and also down the road, President Trump may truly be on the bump here with MAGA because MAGA supported him as a winner.

What if he now really is demonstrated to be the ultimate Jimmy Carter? And the bigger the strike, the more the chaos, And that means doubling down like the losing gambler. And the odds of this aren't just 50-50, and they are not steady, folks.

They grow.

And there exists a risk today, that's absolutely true, that we could see escalation before November 3rd. But what you see is the risk grows after November 3rd all the way through to January. This is not, oh, we just need to get to November 3rd or November 4th. And then everything is fine because after November 3rd, Trump suddenly has very little to lose. Before then, over the last few months, you can see if Trump struck, he might lose something in the November 3rd vote. That changes on the night of November 3rd when the polls close. This means that election day is the starting gun.

So, sir, what fits with that is some of the latest news that just came out. B5, we just talked about this previously, is about the new plans to draw up for renewed strikes on Iran after the elections from the New York Times. One of the you know, I'm curious if you could contextualize this because Crystal and I were saying it's very difficult to see how despite, you know, the corollaries you just gave about Japan or Vietnam, how they can really still believe of a short three day, 72 hour bombing period, which will miraculously drive Iran to the table. And yet that does seem to be the logic here. Obviously, it fits perfectly. within the escalation trap.

But I mean, what is the mindset of someone who can still believe that after eight months?

Let me explain the disconnect in the media. They're focusing on the word three-day air plan, and they're comparing it to 40 days of previous war. This is just a disconnect in the media. What you're seeing are white belts trying to pretend they're black belts when it comes to air power. So this is, this three-day air plan looks a lot, once you look under the hood of the details, like the instant thunder air plan in 1991 that kicked off the first Gulf War against Saddam Hussein. And what that plan was, was not just to try to kill Saddam Hussein, kill one leader. It went after a widespread command and control attack.

Against the military nodes in Iraq.

Now, you'll say, well, didn't we do that back in March? The answer is not very thoroughly, no.

And why?

Because what's the change is we now have had eight months where hundreds of thousands of our intel and DIA, other intelligence agencies, have been able to identify the command nodes in the Mosaic plan that Iran has. I really have no doubt. And I'm not saying we should do it, by the way. I have no doubt that when you turn 300,000 Intel folks who work 24-7 on this problem, you are going to identify a lot of command and control nodes for the IRGC that we did not know about.

And I think that is what is coming. And that three-day plan, again, the media is focusing on this word three.

They're missing it.

The plan on instant thunder started as a three-day plan. It went all 43 days of the war. So again, the media is focusing on the wrong number because it's a good thumbnail soundbite, three-day.

You see what I mean?

And the problem is there's just more to it than that. And you need to talk about this with actual air power experts, not just military experts or not marine. I mean, this is instant thunder 2.0. And what we're missing is what would be compelling to Admiral Cooper. And why is General Kane going along with this? Almost surely this is what is going on. We've probably identified hundreds of nodes of the IRGC that we didn't... So remember, in February 28, this was a start from scratch war. We didn't spend six months preparing for this war. Donald Trump just literally...

On a Friday afternoon at 315 said strike tomorrow morning. And that happened. You don't have the time to identify all this. I'm not saying this plan is going to win. I'm saying that this is what's sucking them into the escalation trap from the military's perspective.

Gotcha.

And so, Professor Pape, Trump is obviously not the only world leader who's facing a critical election in the coming weeks. Prime Minister Benjamin Netanyahu is as well. We had an Israeli political analyst on yesterday who was indicating he is behind in the polls and may be feeling quite a bit of pressure there. How does that factor into your analysis?

Well, so Netanyahu did try, it looks like on October 10th, to start a strike.

And then we pulled back.

And I think that this is because of what I'm saying, that Trump still thought he's what Trump is trying to do in these final weeks is jump up enthusiasm among the base. That's why that's what you do in a midterm. And that's exactly what Trump is doing. And so what he's and so he just made the call. that he wants to wait. But Pete Hegseth went, met with Netanyahu.

It looks like Hegseth was being given some very top secret intelligence. That's at least the leaks that I'm seeing. And then this is planning for strikes after, at least after the Israeli election. And that's why that curve I just showed you, there is a serious risk now, but it's just steady up all the way through January 3rd.

So the key thing to know is Trump has less and less to lose and more and more to gain by this politically, domestically every day we go forward from here.

Right.

Professor, you said you're not you're not saying it's going to work. Your point, though, about why the military would get sucked in actually makes complete sense to me because, you know, that that tracks for why Pete Hegseth is in Israel. He's doing this air power exercise with Bibi. They're convincing him this time around we've got a target set.

But you also said, I'm not saying this is going to work. So what do you expect the fallout from this to be from the Iranians?

A gigantic disaster. Gigantic disaster. Much worse than I think people are really expecting. Because see, they're focusing on the word three. They're not understanding what happen in the past. So they're just focusing on three. Well, how bad could it be? And they're distracted by November 3rd. So even the best people here just are not understanding what would happen with that so-called three-day air plan. And what is likely to happen is you will see the economy likely continue to go south even more rapidly probably all the way through, if we do this, all the way through April to June. So this is not just, oh, it'll be a bad few days with oil prices. Everything will just snap right back. Because what happened with Instant Thunder

is we could never shut down Saddam Hussein's Scud missile attacks. As that leadership campaign went on, And so those scuds kept hitting Tel Aviv. They killed 28 of our troops in Riyadh. So this plan, I think, is very seductive. It's the seductive part of the escalation trap. But the bottom line is military will say, well, wait, we degraded.

We lowered the number they could fire. Well, that's still going to wreck the economy.

Professor Pate, my last question for you is, you know, you indicated that if there is a massive midterm reckoning for the president and his party, that he will have increasingly less to lose and that will only increase the likelihood that he will escalate. In alternative view, you know, the world I'd like to live in is that there is a reckoning over the Iran war that the democratically elected president looks at that and says, I better change course because this is not what the people want me to do. and goes in a different direction. Why do you feel that Trump will take this moment to escalate?

And why would he think that would rescue his political situation in some way?

Yeah, so number one, I'm not telling you it's inevitable. I'm showing you the risk curve.

That's the best we can do.

I know people wanna polymarket everything and try to make money on this. It's not what I'm doing here. So number two, the fundamental problem Trump has is that his whole administration, not just the economy, his whole administration is about to go off a cliff. Now, the cliff doesn't, it doesn't, the ship of the administration doesn't go off the cliff on November 3rd. That's when it starts going off the cliff. It really goes off the first week in January. Because if the Democrats win big, if they take both houses of Congress, then what you're going to see is that people will the administration will just come unglued.

Pete Hegseth, whether Pete Hegseth resigns in December to avoid being impeached and removed won't matter.

That would only be.

More blood in the water for Washington, which loves these frenzies.

You see what I mean?

So once you get the frenzy of Washington going, there's no stopping ripping apart the Trump administration politically. And that's just going to go on and on and on. And the Democrats just aren't going to sit back and say, oh, sure, in order to calm things down, we're going to let Trump off the hook. We're going to treat him real nicely.

That's what you would have to have. You'd have to have the Hakeem Jeffries and Nancy Pelosi go to Trump and say, look, we're just going to help you build your library. You want to raise a billion dollars? We'll help you raise that billion dollars. That's not happening. No, it's going to go the other way around. Trump knows it.

And that's when the ship goes off the cliff. It's January 3rd to 6th, somewhere around there. And that deadline of the certain death of the Trump administration politically, that is the gambler's problem in spades.

Think about that.

This isn't just you're losing money. This is you're about to go bankrupt anyway you've got a few chips left what are you doing with these chips that's the real problem that we face with and by the way this was what the Japanese face this is what Lyndon Johnson face ultimately they go till the chips are gone Lyndon Johnson ran this all the way to the end until he became the ultimate embarrassment. He had to withdraw from running for president. Richard Nixon then won twice as a result of that. Think about the consequences here for the Trump administration. This will be the legacy. And this will be called either Jimmy Carter on steroids or Lyndon Johnson on steroids. this is going to be the worst political

shattering of an American administration since the 60s and 70s. This is going to start to look like the Nixon unraveling.

Wow. Well, sir, as always, we appreciate your time. Thank you for the slides and everything. We'll see you again. Thank you.

Yeah, well, thank you very much. And look, I too hope for a soft landing, but the only way we're going to get there is understanding what's in front of us And for the Republicans to stand up and say no.

Well, I don't see that anytime soon.

Well, you said what's the solution? There is a solution.

No, you're right. We agree, but it's just unfortunate.

This is not a Democrat party problem. You see what I mean? This is a Mike Johnson problem.

Yep, exactly right. Thank you, sir. Appreciate your time.

Thank you. Thanks, Professor.

Cybersecurity experts are calling it Black October and saying we may be experiencing the worst cybersecurity incident in history. Let me do my best non-technical attempt to explain exactly what is going on. Let's start with this Wall Street Journal that kicked this whole cycle off. So the headline here is AI just found a bug that puts up to 70% of the world's websites at risk. Artificial intelligence tools help find one of the most severe online bugs ever. Cyber experts are racing to patch it before hackers use AI to exploit it. I will read a little bit of this article to get some of the technical details here.

So they say that the creators of PHP, a technology that powers as much as 70% of the world's websites, disclosed a critical security issue Wednesday that could be leveraged by hackers to take control of any system running its software that would allow an attacker to steal information or launch a cyber attack on anyone visiting a hacked website.

Security researchers found the vulnerability using AI. Now web administrators are scrambling to protect themselves from the vulnerability which cutting edge AI systems.

Could quickly exploit.

And so there's a lot to unpack here. However, what I understand of what's going on here is a lot of kind of like older websites that have been around for a while, you know, sort of stayed built on top of a WordPress system. Those are the types of things that will be impacted by this security vulnerability. There's already websites for governments, for major companies around the world that have been taken down in order to try to patch and deal with this potential exploit before it is in fact exploited. It is a massively impactful thing. And you can imagine, Sagar, just my understanding of this in layman's terms is typically when one of these potential vulnerabilities is found, then you issue a patch and it takes

some time for everybody to implement it. But you're dealing on the other end of things with humans who would be the ones who would come in and exploit it. It takes time for them to look at the patch, figure out, okay, what is the vulnerability here? How can I exploit it? And so that provides some time for you to create a defense against this. Now, On the one hand, you've got very powerful AI tools that are able to identify these vulnerabilities.

But on the other hand, anyone.

With some basic hacking knowledge, you don't have to be the best of the best, can take a look at the patch, can immediately figure out what is the exploit and can begin to take advantage of it. So that is the way that AI has changed the game. Let me go ahead and put this next post up on the screen. This is the first element, the new one, Eric, in this block that lays out some of the ramifications of what's going on here. And this is not just to do now with the PHP exploit that I was just describing, but you've got all kinds of issues just over the last 48 hours. So this person says this is the most serious 48 hours in cybersecurity history, Black October, they're calling it. It seems every hour there is a

new incident that in a typical year would be one of the biggest incidents of the entire year. Summary of the last 48 hours. Here are the year-level incidents. In a typical year, these would be among the biggest incidents. So PHP to Shell, that's the one I just described, the hole in the software behind 70% of websites. Governments are taking sites offline. Then you have a hole as you've got a California situation. Data on every public school student since 2023 was stolen, including Disability status. You've got a railway incident. Hackers stealing customers' secret keys from a hosting platform used by millions of developers. You have Zboard.

321,000 accounts breached. Company is shutting down.

And on and on.

We can go to the next page. They then go on to detail. month-level incidents. In a typical month, these would be among the biggest incidents. And you've got issues with Signal, a bug that could leave your mic and camera on after you hang up. Literal stuff of nightmares there, Sagar.

You've got WordPress.

You've got an issue at Palo Alto. You've got an issue with Meta's Muse, where their AI agent exposed users' personal and business secrets. And then you've got some other serious incidents that they flag here, including the State Bank of India. India's biggest bank confirms a data breach. Siemens, the software hole being used to spread malware. North Korea, state hackers launch a new attack campaign on South Korea. So, you know, I just read off a few selected ones, but you can see that we seem to be in a potentially nightmare scenario where AI has developed to the point now, and this is something that, you know, people have been raising flags about really since Anthropic paused their Mythos release. You now have AI with superhuman technology hacking

capabilities that is causing a flood of security incidents across the web. And so, you know, today you may look at this and it really does, Sagar, increasingly feel like we're in the early moments of a sci-fi movie where you're seeing just like the news reports on in the background, the newspapers open at the breakfast table, and you see these headlines that are sort of like troubling, but they're not really sinking into people yet and haven't really massively directly impacted people's lives. But, you know, today it's a bug with signal. Tomorrow it could be a bank that's hacked and accounts are cleared out. The next day it could be an electrical grid that is taken offline with an uncertain amount of time before it's brought back online.

That may be the world that we are rapidly approaching. And that's what experts are raising the alarm about right now.

Yeah, it's actually so interesting on this. But again, we're not cybersecurity experts, but relying on some of the quotes. So apparently, so the guy who found this, who runs the foundation of PHP, he actually compared this bug to the heartbleed bug, which I remember vividly in terms of how much damage that one did. But what's even more interesting is that this was a vulnerability that was known about a decade ago. But the conclusion was, is that it's too hard to exploit. They're like, there's nobody who would be smart enough to be able to find a workaround that obviously didn't anticipate algorithms and AI. And then to your point as well, now that everybody else also has access to the same tools, because remember, these tools

that were found to find this, that were used to find this bug are the exact same tools that you or I use. are used. It's the same tools that our team can use for a variety of business enterprise applications. It just needs a little bit of a cybersecurity background and some technical know-how. What they're saying is the problem is that now with AI, you can actually reverse engineer the patches into an exploit themselves. You don't actually need to know how to do it. You can use the AI But I do think, you know, combining that with the Monday or like the post that you put up there about some of the problems really does show how, look, you know, we're potentially on the cusp of I think it will be banks. I personally think that it's the

banking system, which is extremely vulnerable. I mean, bank I.T. people can sound off. But from what I know about big corporations, there are still multiple Fortune 500s out there that still run off of terminals and IBM software that have all been kludged and patched together from the 1980s onward with some internal security infrastructure. I'm not saying there aren't people who aren't paid millions of dollars to protect it, but they also are still trying to catch up. Some of them obviously are not going to catch up. Some of the executives and others are going to say, eh.

You know, we'll see or, you know, we'll put that off. And it's only after a really big incident that other people start to pay attention. That's at least what some of my friends in IT have told me. Like, for example, put CT.

Yeah, go ahead.

Well, I was just going to say, to your point about banks, I was just looking at a story this morning about how banks are really concerned about all these AI agents that are running loose in their systems already, and in some instances seem to be taking actions independent of what humans told them to. And You can understand how this happens because with Muse in particular, but with any AI agent, you can give it access to your bank accounts and tell it to do stuff. I don't think you should do that. I would really strongly recommend you not do that. But many, many people are. So you've already had a number of banks, I think JP Morgan Chase and a few others that have said we're banning any AI agent access to our system altogether because

They also have a selfish reason for doing this as well, which is one of the fears of the banking industry is right now some of their profit margin relies on the friction of moving your money from their bank to another bank or from your savings account into, let's say, a money market account. And so if AI agents take all of that friction out of the system, then you can imagine a scenario where en masse deposits are moving to whatever happens to have the slightly highest.

Interest rate return on it.

And then if you're reliant on those deposits, obviously, to run your banking business, then you're going to be pretty screwed. So they also are looking at this as like, ah, we got to make sure that people aren't just like pulling their deposits willy nilly now that they have an agent who can do that for them and take the friction out of the transaction. So they have very self-interested reason as well. But you can also understand from a cybersecurity perspective why they're like, you know, I'm not really comfortable with this. So it would not be a surprise.

I've seen so many, you know, so many YouTube videos and podcasts. speculating from experts, speculating about when AI may be able to crack encryption such that all of the encryption that we rely on and become very comfortable with banking online. I mean, like our entire adult lives, this has just been something you do. You don't think about it.

You don't worry about it. That can completely undermine that. There's a question about whether your Bitcoin wallets are going to be safe. So that is an open question as well. And when you see the scale of what's going on right now, it really makes you feel, okay, we're not really ready for what is here, let alone what is to come.

I totally agree. And I was going to show people these NSA things like C2, we can show this. This was an announcement literally put out by NSA Cyber itself. Effective immediately, all organizations using PHP are advised to be prepared for an update addressing two critical vulnerabilities. Then the next one, this is from the FBI Cyber Division. Actually, they say two critical vulnerabilities have been identified. They urge organizations to take the following steps. But I mean, how many people are going to listen? Anybody who has a large business, a massive IT department, they're going to pay attention. But, you know, it's the little ones or others, people who may, you know, mom and pop business, they're not going to

pay attention. And they're just so massively vulnerable. now ahead of this in particular. So I think there's a lot of danger here. There really is when we look at it. And I do think the big one will eventually come with the banks. I'm just I'm just I can see it. You know, I don't think it'll be JP Morgan necessarily, but you just have to remember how many credit there's like all these little credit unions and all these things across the country. I mean, I know somebody who has a credit union where they have to pay their credit card bill by like dropping off an envelope of cash over it. I'm like, I'm sorry. I'm There's no way that institution is prepared for this, literally at all. You could outsource it and all of that, but everything is

kludged together in the back end. It's highly regulated, so it's not like they can even update their system necessarily to the point where they want it. The biggest will probably be fine, but there are definitely going to be people out there who are going to have some sort of a problem. And I do think that's when people will really wake.

Up to this. I do.

Yeah.

Unfortunately, it is an argument for having your money in the largest institutions, you know.

Which I don't want. I think it's bad. I don't think people should do it. I'll be, I'll be honest with you. I used to chase for that exact reason, self-interested, even though I know, I remember one of the most insightful episodes I ever listened to was this Austrian economist, a banking expert. I think it was on Tucker show.

where he basically was saying, he's like, look, the biggest problem we have is that we don't have enough banks. He's like, we actually need a lot more banks. Like you need small banks and not these large, too big to fail type institutions, which could create credit. And it's, you know, like things in local community, kind of how it was in the, in the 1940s, 1950s, people could be able to go and be serviced by a local bank, a local banker who has some gives and take and all these national regulations that, and consolidation are actually one of the fuels of not only income inequality, but of lack of business formation and other problems. But yeah, I mean, like you just said, this is one of the arguments, actually,

for just using one of the largest banks because they're probably the only ones who are actually prepared and who are on the cutting edge. It's everybody else. Look at Silicon Valley Bank. You remember that entire fiasco as well. Those are some of the richest, most sophisticated people, allegedly. And the entire thing went bust. And if it wasn't for unprecedented bailout and if Trump hadn't been president, then probably wouldn't have happened.

Well, and that's the other piece, too, is, you know, they're not going to allow a JPMorgan Chase to just like eat the losses. So, you know, unfortunately, too big to fail, I guess, provides a sort of protection mechanism for you there. I mean, it's grim, but it's that's the reality that we're in right now. A few other things we wanted to get into this block in particular.

You know, this fits together with the concerns that the public has about AI.

We can put C4 up on the screen.

We've got some new polling here from ABC News about their people's sentiments about AI in general. Their headline here is most Americans say AI is bad for society and they oppose more data centers. This truly, once again, there are some partisan differences, but you are talking about a majority of Democrats, independents and Republicans who share similar sentiments and concerns about about AI and want to see more regulation.

Let's put the first poll data up on the screen here. So this is a question, is AI good for you personally? People are actually pretty split on this one. It's basically 50-50 of people who feel like it's good for them personally or bad for them personally, which for a new technology, which has incredible promise, is really not a great state of affairs in terms of already how people are feeling before they get to their Concerns for the future. Let's put the next piece up on the screen. Majorities of Americans see high risks with the growth of AI. And lo and behold, what do you think is the number one risk that people are concerned about? It's hacking secure computer systems.

Why?

Because it's already happening. You know, who are these people that say little to no risk?

It's all right here.

So you're clearly not consuming the news and absorbing the world as it currently exists. The next greatest concern is eliminating many jobs and then people losing their ability to make their own decisions without AI. So that sort of ability to keep control of your own decision making and not outsource all of your thinking to AI, that looms large for people, which is interesting. Next, you've got increasing economic inequality. And then at the bottom of the list here, but still with very high numbers that think it's either a very high or a moderate risk. A majority of people here, 65 percent, saying they are worried at some level about the risk of human extinction. Let's put the next one up on the screen. Majorities say the federal

government is not doing enough. To regulate AI, this is a super majority position. 67% of adults want to see more regulation. That is including a majority of Republicans, 54%, even though Trump has really pushed this deregulation off to the races attitude towards AI development. Let's put the next one up on the screen. Most Americans also oppose new data centers being built in the US overall.

And in their communities.

So only 30% support new data centers in the U.S., 66%. So again, a super majority opposed. And then if you ask specifically about a data center in their own community, the numbers get even worse. Only a quarter say they would support that and 72% opposed. So you have a broad range. of fears right now, Sagar, about AI development, about the manifestation of that in data centers, in people's communities.

And the issue is only going to become more and more salient as the public absorbs these significant cybersecurity incidents and is increasingly directly impacted by them.

Yeah, exactly. And the public is, as I say, if anything is lagging behind, they're not paying attention. to all of this. And so when it breaks open, I do expect it to be a big, big moment. It's like COVID or any of these other things. COVID is actually a perfect example. You're January 2020, you know, weirdos like me are buying masks and goggles and gloves and survival rations on Amazon and, you know, telling everybody it's coming, it's coming, it's coming, it's coming. You seem totally insane.

And then literally the entire world shuts down. I'm not saying it's going to be exactly the same, but it does. It has some flavors, I think, of all of that.

10/22/26: Troops Evacuated Amid Iran Escalation, Prof Pape ON Trump's Iran Gamble, AI Cybersecurity Nightmare

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