For months now, we've been telling you about three ongoing stories that we believe are of significant global importance - but that aren't getting the attention they should be from the mainstream U.S. media.
Those three stories, of course, are the ongoing skirmish in the South China Sea, the Cyber-Hacking of America saga (in which China has allegedly emerged as a prime suspect) and the escalating threat posed by North Korea.
Well, a development this week appears to have combined the last two into a new story - the "Cyber-Hacking of South Korea."
And here's why you need to pay attention to this story.
First, we've been telling you for months now that cyber-hackers were stepping up their attacks on government agencies, private corporations and ventures of other types. China - indeed, a special branch of its army - are allegedly behind these attacks (though it was said to be seeking trade secrets to improve its competitiveness, as opposed to the state and military secrets it might want in advance of an armed-forces attack).
Second, with stock prices at record highs, with financial crises continuing to pop up all over the world, and with political and financial gridlock continuing as threats here at home, the risk of a "crash" of some sort is very high. It'll just take the right kind of push - an unexpected event that causes the U.S. economy to lock up, and tips stocks into a big sell-off; or an event that causes stock prices to crash, which leads to a "shock" type recession after scared consumers suddenly stop spending.
Third, there are two things the financial markets hate more than anything else: Uncertainty and bad surprises. That's what makes this "surprise downturn" scenario so likely. The three stories we keep telling you about are being underfollowed by the U.S. news media and are being largely ignored by most Americans. Since each of these situations - the South China Sea, the Cyber-Hacking threat and tensions in Korea - could result in a bad surprise, the odds that one or more of these could "sneak up" on investors continues to rise.
That's why we want to keep you informed ... and prepared.
Wednesday's cyber-assault on Korea heightens the growing acrimony between the Northern and Southern neighbors. And it's also a glimpse into the future - at how cyber-assaults will be used to augment other, more-conventional threats.
We've seen a growing number of cyber-attacks in this country. And some of these attacks - the theft of data from the U.S. Federal Reserve is a good example - have been high profile enough to be shocking. But when you think about it, those really have come one at a time, and haven't represented a concerted assault.
But Wednesday's cyber-attack on South Korea was very different.
It was much wider in scope. The fallout was broader and longer-lasting. And it is exacerbating the tensions that already exist between two border-sharing enemies already on a warlike footing.
So it shows us - perhaps for the first time ever - the havoc that a cyber-assault can wreak when hackers go after an entire sector, attack multiple targets at one time, or hit an entire economy or country.
This attack wasn't against South Korea's utilities, infrastructure, government, or armed forces. But it crashed computers at three banks, made it impossible for customers to access ATMs throughout the country, and rendered useless as many as 32,000 computers at three of the country's broadcasting organizations - including KBS, which broadcasts the country's news-and-culture programs to Internet and shortwave-radio listeners throughout the world.
Korean investigators tracked the attacks to a Chinese "Internet Protocol" (IP) address. But here's the problem: They don't fit the pattern of the earlier cyber-assaults attributed to China.
In those alleged incidents, China was said to be looking for commercial secrets that could boost its global competitiveness. But Wednesday's incursions were intended to be disruptive.
That's why investigators believe that North Korea may actually have been the culprit, with hackers using the Chinese IP address to cover their tracks.
Technically speaking, and despite a signed "truce," the Korean Peninsula has remained in a "state of war" since 1953. There have been many flare-ups - a possibility facilitated by armed borders and frequent military maneuvers on both sides.
More recently, the shooting skirmishes have gone digital. Even before this week's hacking debacle, South Korea's National Intelligence Services unit says its rival to the North was responsible for six cyber-assaults between 2009 and 2012. In fact, Seoul intelligence officials believe that Pyongyang runs a cyber-warfare unit whose goal it is to hack U.S. and South Korean computer networks. And it may have started to develop this capability back in the middle 1980s.
(North Korea, for its part, last week says its own Internet servers have been the target of U.S. cyber-warfare attacks.)
Rhetoric aside, the cyber-warfare story is global in scope - and here to stay. As we've detailed in several of our reports this year, it's a development you can profit from (use the links in this report to take you to the relevant recommendations). But it's also a reminder that you need to be vigilant, and that you need to manage your downside. One of the recommendations in our "Seven Investments You Have to Make in 2013" special research report should help fill the bill very nicely on that point.
Have a great weekend.
[Editor's Note: Unless otherwise specified, we recommend readers employ a 25% "trailing stop" on all holdings.]