The Insiders
Audio Recording by George Hahn
Trump Casino: When Markets Become the House Game
In the war between Trump & Musk, I’m rooting for the bullets. However, the whole thing is (again) a distraction from the significant damage being levied on the country. It’s tempting to believe America will emerge from the Trump chaos unscathed. It won’t.
The defining features of this presidency are cruelty and chaos — but chaos with a purpose. Share prices plunge following tariff threats, only to rally when he backs down. The White House attempts to bar Harvard from enrolling international students, then gets blocked by the courts. Trump calls for Fed Chairman Jerome Powell to be fired, then insists days later he has “no intention” of terminating him. Even if most of his promises go unfulfilled, the long-term damage will be severe.
TACO
If Trump were a poker player, he’d swagger to the table talking shit, go all in, then fold before his opponents respond. It’s easy to dismiss this behavior as crazy or incompetent. But it raises a troubling question: Is this a deliberate effort — straight out of an autocrat’s playbook — to create volatility that the autocrat and his acolytes can exploit? What if this isn’t incompetence, but a strategy?
Financial Times columnist Robert Armstrong coined the perfect term: the TACO trade — Trump Always Chickens Out. But Armstrong told us on Prof G Markets that chaos may be the point: Trump and his team have such contempt for the system, they don’t see any downside risk in burning the village to save it.
These policy gyrations have created an association of “toxic uncertainty” with brand USA. Announcing more than 50 new or revised tariff policies in a matter of months makes no sense, until it does. Trump’s market manipulation operates like a carnival game — it’s rigged. The house always wins, as it knows when the music is about to stop.
The Numbers
Trump’s ability to trigger wild swings in stock prices has created an environment ripe for insider trading, undermining trust in U.S. markets and eroding a pillar of American prosperity — the rule of fair play. When Trump shocks the market and then retreats, it gives his inner circle, both in Washington and on Wall Street, an opportunity to place trades with asymmetric upside. They have information the other players (whether they’re buying or selling) don’t possess.
Trump’s tariff proclamations have created some of the most extreme market volatility in decades:
- April 2-3, aka Liberation Day: The markets posted their worst day since June 2020, during the Covid-19 pandemic. The S&P 500 dropped 4.8%. The Dow tumbled about 4%. And the Nasdaq fell 6%. Three days of losses wiped out about $10 trillion in wealth — equivalent to roughly 10% of global GDP.
- April 9-10, Trump Blinks: In a stunning U-turn, the president walked back some tariffs, triggering a historic market rally. The S&P soared 9.5% in one day — its biggest gain since 2008, while European markets staged their biggest jump in more than three years.
Multi-trillion-dollar swings happening within hours of his statements aren’t market forces — they’re signs of manipulation with a presidential seal. The markets are essentially reacting in real time to his policy announcements and reversals, creating unprecedented uncertainty for investors … and opportunity for those who are inside.
Inside Job
A string of incredibly prescient trades has sparked concern that Trump’s allies may be trading on material nonpublic information. ProPublica reported that more than a dozen high-ranking officials made well-timed trades following Trump’s inauguration — most selling stock before markets tanked.
Attorney General Pam Bondi sold $1 million to $5 million in Trump Media stock on April 2, the same day the president announced his Liberation Day tariffs. The timing of her trades that day is unclear. But think about that: The nation’s top cop is selling stocks the day an announcement by the president ignites a crash in prices. Trump Media slipped 13% in the following days, before recovering.
Wow. What. Luck.
Most damaging: On April 9, Trump posted a message to followers on Truth Social: “THIS IS A GREAT TIME TO BUY!!! DJT.” Less than four hours later, he announced a tariff pause, sending stocks soaring. Billionaires tracked by Bloomberg enjoyed their best day ever, adding more than $300 billion to their combined net worth.
Maxine Waters, the California Democrat, zeroed in on suspicious call option trading in the 10 minutes before Trump’s announcement. “No rational investor would have purchased these options unless they had prior knowledge of the president’s impending reversal on tariff policy,” she and her House colleagues wrote in an April 10 letter to Securities and Exchange Commission Chair Paul Atkins requesting an investigation.
Damage Control
Less than two weeks later, Treasury Secretary Scott Bessent, speaking at a closed-door investor summit hosted by JPMorgan Chase, said he expected a “de-escalation” in Trump’s trade war with China. Stocks, which had already started recovering after a sharp drop the previous day, soared after Bessent’s comments were reported.
Elizabeth Warren demanded an explanation. The Massachusetts senator argued in a letter to Bessent that Trump’s opaque tariff decisions and “frequent, seemingly random changes of course have created a scenario where wealthy investors and well-connected corporations can get special treatment, receiving inside information they can use to time the market, or obtaining tariff exemptions that are worth billions of dollars — while Main Street, small businesses, and America’s families are left to clean up the damage.”
In late May, stocks dropped again after Trump threatened to raise tariffs to 50% on goods from the EU. But when the president subsequently said those tariffs would be delayed until July, his comments triggered a global rally over the next two days.
The White House has announced a flurry of new and revised tariff policies since Inauguration Day in January. But I’m willing to bet that very little will change over the next year or two when it comes to trade policy. I also predict that Trump will fail to follow through on most of his threats, on everything from tariffs to Harvard, as he backpedals or gets stymied by the courts.
Bad Cop
The country’s top securities cop will get to the bottom of it … at least, that’s how it’s supposed to work. But at a time when suspicious trading activity is mounting, the SEC is being defanged. Trump earlier this year signed an executive order to “rein in” independent regulators, including the SEC, and make them accountable to the administration. The order forces the agency to report to the White House for approval.
At the same time, thanks to buyout and retirement programs offered by the administration, the SEC workforce is being slashed. SEC divisions reportedly lost up to 19% of their staff over a period of just several weeks. The fox isn’t just in the henhouse — now he is the farmer.
And don’t expect a strongly worded letter from Senators Chuck Schumer and Elizabeth Warren to light a fire under Atkins, the pro-business crypto enthusiast Trump picked to head the SEC. You can bet Atkins will take a lighter regulatory approach than his predecessor, Gary Gensler.
Golden Age of Insider Trading
Insider trading has long been a scourge. James B. Stewart chronicled the 1980s insider trading scandals in his book Den of Thieves. Sheelah Kolhatkar’s 2017 book, Black Edge, tells the story of billionaire hedge fund investor Steven A. Cohen, his former firm, SAC Capital Advisors, and the largest insider trading investigation in history. SAC pleaded guilty in 2013 to fraud charges and agreed to pay a record $1.2 billion penalty. While Cohen wasn’t charged, he agreed to a two-year ban on managing outside money. In 2014, his firm was reborn as Point72. Six years later, he bought the New York Mets.
But the conditions today threaten to usher in a golden age of insider trading, inviting well-connected investors to cheat. I predict that the next set of results from the nation’s hedge fund managers will show that some of them have made a killing, raising questions about whether they’ve capitalized on insider information to achieve those gains.
The Real Cost
The collateral damage happens to the people on the other side of these trades. They are losing fortunes. As Pulitzer Prize winner Anne Applebaum argues, American policy is “being transformed, not to benefit Americans but to benefit the president, his family, and his friends.”
In our conversation last month, she said that fighting corruption depends on connecting it to ordinary people’s lives, showing “they are poor because the Trump family is rich.” She noted that Alexei Navalny, the Russian opposition leader who stood up to Putin and died in a remote prison above the Arctic Circle, successfully linked Russia’s kleptocracy to bad roads and poor healthcare.
Ensuring America has a fair playing field is key to its success — that’s why we have five times Europe’s risk capital for startups. It’s why our companies garner $26 in value for every $1 dollar in profit. Russia is a kleptocracy. The total value of its stock market is around $80b, vs. $52t for the U.S. The erosion of faith has disastrous consequences. Corruption is contagious. It starts with one infected trade, spreads to cabinet members, then metastasizes through Congress and the donor class. America under Trump hasn’t just caught the disease — it’s becoming a superspreader event that will infect global capitalism.
Mean girls breaking up makes for good reality TV, but it’s a misdirect from the grift that will reduce our prosperity and limit our ability to protect others at home and abroad.
Life is so rich,
P.S. I’m sitting down with Microsoft’s chief scientist, Jaime Teevan, to discuss the topic on everyone’s minds: AI’s impact on our jobs. RSVP to AI and the Future of Work for free. Hosted by Section.
Good post, really great to see the data behind the corruption and have the mechanic of this administration’s chaos explained so clearly. Is Trump really so much worse than everyone else, or is he just doing it more blatantly? Would love to see some data-backed analysis of insider trading during recent presidencies.
I used to enjoy your commentary until you left the room and started down the MSNBC route… I suppose the lefties will lap it all up, but I am done .. you might as well join The View. After this response, I am hitting the unsubscribe button. You are afflicted with TDS. Hope you look for treatment.
This is to anyone else spewing “TDS” at ProfG. You are all wearing “Trump is god goggles” which has lead you so far up his *@((*@ that you no longer understand basic economics or want to admit that he, his family and every damn appointee are doing everything ProfG is outlining and more, much more. They are proceeding to bankrupt the Federal Government with trillions of $ in debt our kids and grandkids will service. We should all be ashamed for falling for this grift. Now when the Dems regain control of congress, the GOP will be screaming about the bloody debt THEY created. How more hypocritical can you be? While I despise both of them, Musk has the balls to call a spade a spade and elevate the blatant financial smokescreen the GOP congress is selling to MAGA kindergartners like candy.
Scott,
Always provocative. Trump must be freaking smart to pull this off. I don’t doubt but I’m not willing to convict. Question? Where were you when Pelosi and others (Schumer, Schiff) enriched their pockets with stock deals allegedly from insider info? I now have the Pelosi app. And the Russia hoax, the Hunter laptop cover-up and Ukraine extortion, the Hillary emails and Benghazi BS, the Biden cognitive cover-up, the Jim Comey slop … Maybe I missed these shannigans in your posts or maybe they just didn’t merit your scrutiny. At some level, they have all cost us money and more. Keep on. You are brilliant.
Scott, can you once and for all, write your definitive Trump Sucks piece and get it out of your system? man oh man, every week now is Trump-Trump-Trump with you. as if the mainstream media’s obsession was not enough. we get it, the guy suck on every level and you hate him. got it. thanks. the insights, thought provoking witty writing is gone from your columns, man. you’re obsessesd, and it makes. you boring and dull. 2 thing you NEVER were.
can we please have the pre-November 2024 Scott back? you hated him, then, too, but not every column was about him.
Gerry
I am stumped by how erratic the markets are considering this is his thing. Is his first term, Trump did basically the same thing. Are the people who invest in the stock market so unsteady in their abilities they will play this game again and again and again…? I get that a lot of them are making money buying low and selling high (or whatever), but why don’t people stop panicking every time he opens his mouth or uses his thumb for an ALL CAPS post? How can I respect any of these folks, like Jamie Dimon or Ray Dalio, when they panic buy or sell based on a manipulation by the bully in the White House? Are we all just that short sighted?
I’m not for banning insider trading among members of Congress or the Administration. But I am for full, virtually immediate disclosure. Every trade made by members of Congress, their families and staffers, and by members of the Administration should be available for scrutiny within 24 hrs., on a public database. Every day’s delay should result in a fine of $1000/day or 10% of the value of the trade, whichever is higher. In fact, it can be made automatic by requiring the broker to send the information automatically to the public database 24 hours after the trade so it publishes automatically.
No disinfectant like sunlight.
Number one insider = Howard Lutnick. As Trump produces volatility, Cantor prints money. And who has Trump’s ear? Cantor CEO Lutnick.
As far as those the are suppose to act on our behalf, I have been under the impression the our elected Congress persons and Senators have legally been able to take advantage of i sides trading. It all displays an uphill battle which in my opinion started when SCOTUS decided corporations can contribute as much money as they wish to buy elected officials, which tipped the field in favor of the privileged.
Flooding the zone at it’s best. The pathetic narrative Trump displays is proof he takes the American people for fools.
Great post, very enlightening. But why the HELL do you call two men “mean GIRLS breaking up”? Why not e.g. “two alpha narcissistic bros trashing each other….”?
Sexual aspersions are among the most common insults known to humans, Dina.
Remember Tim Walz’s shock when he realized sexual aspersions aimed at J.D. Vance wouldn’t work in a vice presidential debate?
There is no war. Itza distraction. Carole Cadwalladr pulled back the curtain months ago.
As of 2019, according to Forbes Magazine, Elizabeth Warren’s net worth was $12 million. For 2022, she and her husband reported a combined income of $1 million; her salary as U.S. Senator only accounts for a fifth of that sum. As of early 2025, TheStreet.com estimates her net worth at least $8 million.
I wonder how many of these civil servants are really billionaires.
Calling it right now
Anthony Fauci is a billionaire
Scott, you are so on target! Thank you!
I publish my own blog. The topic several days ago was “a day of wellness”. I wrote the following:
“This isn’t about politics; it’s about policies—and the deliberate whipsawing us into submission and accepting the bizarre as the new normal.
“· One moment the stock market is going up and the interest rates are decreasing; the next moment the market is down and the rates up. Billions of dollars go poof, and then billions of dollars reappear! (Sound contrived? You betcha!!! Designed to make certain folks very rich. In earlier days it would be called market manipulation. I do not believe this being done by whims of fancy. It is deliberate in my personal opinion Keep the investor class off balance while we cash in. Remember?: “You better go out and buy stock now!”)
“It is all by design, designed to get you to stop paying attention. I stopped paying attention for a day and felt wonderful! The real question is that by not paying attention there is a lot going on that may be of concern—but if you give up you won’t notice.”
This is not random or done by caprice. It is calculated to take our focus off the larger issues.
We are in the middle of a chess match, and we are the pawns/suckers being played by some master fiddlers. Enough already.
1) Hunker down and win with AI
2) Vote smarter
3) Believe
What else ProfG?
How can I get in on the cheat
Spot on, Scott. The White House is just a big playpen for Trump, a place where he can stack the building blocks and then knock them over, then toss them against the wall, then throw them at the heads of the kids he doesn’t like. He doesn’t care about the damage because he and his cronies are getting rich off of it. America voted for this — and American will pay for it. Trump won’t pay. He’ll just get paid. Good job, voters.
Maybe Trump ends up being the Yeltsin of the US, maybe $26 dollars of value vis a vis $1 of profit is the thing being exploited and looted
Steve Bannon commented on the Bill Maher Show that having the 2020 election “stolen” from him gave him four years to plan his comeback. Looking back, Trump must be embarrassed by the small-time grifts he was running during his first term in office. Manipulating the capital markets is perfect for him. Trump’s only motivation for meddling in the Russia-Ukraine war is to see what he can get from each side. Zelenskyy already has offered him natural resources but I think he’s holding out for more real estate deals in Moscow. Pardons seem to be going for about $1 million Piece if you aren’t famous. Trump’s new DC club, The Executive Branch, offers membership to right-minded righties for $500,000 a pop. A guy named Galloway recently commented that Trump was making about $1 billion a month from the Presidency. At first I was skeptical. Now I’m a believer.
I’m trying to decipher what Prof’s getting at here, ’cause he’s a very smart guy. But man, to try and (rightly) talk about the evils of rampant insider trading in Congress, and then hold up Maxine Waters as the arbiter of fair options trades, neglect to talk about what Pelosi’s been doing over the past 30+ years?! That’s just too partisan of an approach for me to take seriously
Spot on! I am sure Nancy and her husband made multi, multi millions over 30 years the old fashioned way….. 60% equity / 40% fixed income….. Or, they learned how to invest from Joe Kennedy. (For those that do not know their history, Joe was the first head of the SEC because he was the master of insider trading.)
Absolutely right.
What can be done about all of this other than strongly worded letters from senators? None of them seem to be paid any attention to, and there is never any consequences for all the illegal legality that’s going on.
These rantings of Galloway increasingly wreak of a partisan afflicted with advance stage TDS. No talk of the benefits of cutting out of control, wasteful spending nor the ejection of aliens who have caused nationwide “chaos”. No mention of global actors nor risks of doing business with china. Zero talk of Biden’s blunders. Reading this stuff reminds me of an MSNBC segment with graphs. Partisan drivel from one of NY’s largest egos.
If the market is indeed being manipulated, and insiders trading, and no one can or will stop them, and criminal pals pardoned anyway, then I feel sorry for poor old Martha Stewart’s imprisonment for what may or may not have been illegal insider trading. If only she’d waited till now, when anyone can do anything they want! How do those of us doing the honest, boring old investing get in on the game? Join the club, join Mar-a-Lago? (Disclosure: I don’t play golf). Help me please, I want to be a billionaire, and soon, and without much work, lol.
Does Trump manipulate markets to benefit his friends and facilitate insider trading? Absolutely. What is the risk of insider trading when Trump pardons friends and friends of friends regardless of the severity of the crime. He pardoned Ross Ulbricht, the biggest distributor of fentanyl in the history of our country.
Is it part of a strategy? No. Trump is just too stupid and bad with money for this level of shenanigans. Look at how he has managed his inheritance. For all of the pomp and circumstance around his real estate properties, he has made a fraction of what he could have with even a conservative investment strategy on the money from his dad. If you take away the reality TV money and the memecoin scam, Trump isn’t even a break even businessman.
Trump is skilled at getting attention, he’s been doing it ever since he planted stories about himself in New York tabloids in his early 20’s, but that is the extent of his talent. Sometimes the method behind the madness is just stupidity.
Peter, Trump isn’t as stupid as you think he is. He became President — twice. And now he’s making himself very, very, very rich.
amen
agreed
Peter, how does it feel to have someone so “stupid” and “bad with money” be your president for 8 years?
The problem with the thesis that there has been trading relying upon “material, non-public” information is that virtually none of it has been non-public.
Trump’s style is to make an “aggressive” opening bid and then to walk it back to a level he might never have achieved if he’d started at a “reasonable” point of departure.
He has done it again and again. He has even engaged in a bit of hyperbole — egads!
This is the whole basis for TACO.
What’s non-public about that?
Cheers.
JLM
The timing hasn’t been public.