Source: Yahoo Finance
Donald Trump over the weekend threatened Iran with severe retaliation if his government did not open the Strait of Hormuz within 48 hours, a deadline that would expire in Washington on Monday evening. Specifically, he announced that the US would begin bombing power plants – plants that supply electricity to Iran’s civilian population – unless the strait was cleared.
But at 7:05 a.m. Monday, Trump shut down the entire case for five days, he said, but many believe the threatened action, which would have been a major war crime, has now stopped.
He claimed that the reason for this face-off was that the US was engaged in meaningful talks with Iranian officials – although this seemed to come as a news to the Iranians, who denied that any such talks were taking place. In this case, I am sad to say tried to explain Tomorrow, the fanatical, brutal Iranian regime is more credible than the President of the United States. Is he lying or living in a fantasy world? Neither possibility is comfortable.
But in any case, Trump’s sudden rise to the top was shocking. Who could have seen this coming?
The answer is, the person or people who bought large amounts of stock market futures and sold large amounts of oil futures about 15 minutes before Trump’s announcement. As CNBC report,
Around 6:50 a.m. in New York, a sharp and isolated surge in volume was recorded in S&P 500 E-mini futures trading on CME, breaking from an otherwise subdued premarket backdrop. With low liquidity in the early trading hours, the sudden surge resulted in one of the biggest volume moments of the session up to that point.
A similar pattern was seen in oil markets. West Texas Intermediate May futures also saw a notable increase in trading activity around the same time, with an isolated volume spike disrupting the otherwise calm conditions.
This “sharp and isolated surge in volume” – which you can see for the oil futures market in the chart at the top of this post – was particularly bizarre because there were no major news items – no major… publicly available News item – to trigger sudden large market transactions. The story would be shocking, except that it has an obvious explanation: Someone close to Trump knew what he was about to do, and exploited that inside information to make huge, immediate profits.
This was not the first time something like this had happened during Trump’s rule. There were large, suspicious moves in the forecast market Polymarket before the previous attacks on Iran and Venezuela. But this frontier of American policy was actually much larger: financial Times It is estimated that the selling of oil futures at that magical minute on Monday morning will amount to approximately $580 million, and that does not count the buying of stock futures.
When executives of a company or people close to them exploit confidential information for personal financial gain, it is insider trading – which is illegal. But we have another term for situations in which people with access to confidential information related to national security – such as plans to bomb another country or not – exploit that information for profit. That word is “treason.”
Why is profiting from inside information about national security decisions actually a form of treason? First, it is hard to think of a more fundamental principle for officials to whom we entrust important decisions, especially those involving national security, than that they or people they know should not be allowed to abuse their positions for personal gain.
Second, financial trading based on secrets that must be closely kept reveals information to current or potential foreign adversaries. To exaggerate a little, but only a little, who needs to bribe agents within the government, or recruit them through honey traps, when you can infer the same information by keeping track of transactions on the futures markets?
In the end, there is not that big a difference between using knowledge of national secrets to conduct lucrative financial trading and selling those secrets to the highest bidder. Once you cross the line that says you should not personally benefit from access to information that is or should be highly classified, the line between doing business based on state secrets and outright selling those secrets becomes blurry.
In fact, I would like to know who was making these deals yesterday morning. Were they directly knowledgeable people, or billionaires/businessmen who paid knowledgeable people for tips?
I’m sure we’ll find out once Kash Patel’s FBI conducts its careful, no-holds-barred investigation.
To those devoid of humor, he was a joke. However, I believe that once the Democrats come back to power it will be easier to identify the culprits and they will also Sure Apply the full force of the law to those responsible.
One question that may be difficult to resolve is to what extent the possibility of insider trading can actually influence policy. Are decisions about war and peace partly serving the purpose of market manipulation rather than national interest? If you dismiss it as unimaginable, it means you’re not paying attention.
There is a broader lesson here: You cannot rely on a corrupt government to protect national security. And our government is now thoroughly corrupt: it is difficult to find a single senior official, from the President on down, who treats public office as a serious responsibility rather than an opportunity for personal self-aggrandizement and profit.
Among other things, deeply corrupt governments are very bad at waging war, no matter how much they praise the “warrior ethos” and “lethality.” When we do the post-mortem of how the Iran debacle happened, arrogant ignorance may still take the top spot. But the grotesque gruesomeness will come in a close second.
musical coda
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