Odd things are happening in the markets. Last Monday, 15 minutes before Donald Trump posted an announcement that “productive talks” with Iran had taken place, oil traders placed half a billion dollars’ worth of bets on the future price of oil. Trump’s statement triggered a drop in crude oil prices, and it seems as if some people knew that the announcement was coming, and so a profitable wager was made. Do not be envious; some people are just born lucky.
We do not know if the transactions were made with prior knowledge of political developments, but it’s a hell of a coincidence. It all appears “abnormal for sure”, an oil analyst told the BBC.
The suspiciously timed trades, if they were indeed placed through insider knowledge, would be only a part of a broader betting bonanza that reduces political outcomes to windfall-making opportunities. Take Polymarket, an online prediction market that took off in the early 2020s and allows you to bet on anything from the result of the Super Bowl, to whether Trump is going to invade another country.
Before the US attack on Iran, several new accounts on the platform predicted the timing of the US/Israeli strikes, just 24 hours before they happened. The same pattern was identified after the US coup in Venezuela in January. A single account, set up only a few days before military action occurred, made more than $400,000. As a result of these transactions, people are naturally asking if it is possible that the president of the United States or his associates are illegally profiting from political power, while also finding that it is almost impossible to answer that question. The White House denies that the Trump family has engaged in any conflicts of interest.
Betting markets are rising in popularity precisely because their activity has low barriers to entry and is hard to track. Wagers are made with cryptocurrency such as bitcoin, and so have fewer traditional, traceable banking footprints or restrictions. And the platforms are decentralised, open to global users and very hard to regulate and shut down internationally from a single jurisdiction. Financial markets have always created and traded speculative instruments based on the anticipation of price movements of an asset, but betting markets turn the future itself into an asset that you can bet on based on an almost limitless number of scenarios, up to and including how missiles will be intercepted.
It would not be a stretch by any measure to speculate about whether some of those suspicious bets came directly from a shamelessly self-enriching Trump administration. Since Trump came to office, his family has launched several cryptocurrency ventures. A New York Times investigation earlier this year found that Trump made at least $1.5bn in the first year of his second term.
This isn’t to suggest that Trump is actively tipping people off, but that wouldn’t appear to be inconsistent with the ethics on display so far. There are other possibilities; he is an addled showoff surrounded by a large, diffuse gaggle of private and professional flunkies. It is not inconceivable that people just hang around and pick up what information he is shedding, and then act on it and pass it on.
But there is a wider cultural shift, one that is being consolidated in the White House and disseminated on betting platforms. One of monetising whatever possible, from the presidency to your online presence, and turning the public into marks. There is a promise that anyone can achieve the same success as the hustlers in charge, which of course came from canny, creative and downright artful deal-making.
It is a whole industry. Influencers in the manosphere sell dubious investment platforms, with the implicit suggestion that this is the route to unlocking the lavish lifestyles they post on social media. The sell is that society’s winners have a formula, a secret sauce, an insider’s edge, and that you need one too.
Underlying the appetite for these schemes is something longer-term: the worsening chance of being able to live a decent life on a nine-to-five that gets you a mortgage, some savings, job stability, and a dignified retirement. And with this, has come the cultural denigration of working for the man, the glorification of being your own boss, of not being a mug with a desk job. Optimise your cash, have a little side hustle speculating on betting markets, get a passive income stream, even the president of the US has one!
Then there is the sort of unreality that Trump has injected into the world. His treatment of everything as entertainment and spectacle has rendered politics another branch of sport. He is at once a moody clown and all-powerful ringmaster of a global circus where each day is a surprise: will it be peaceful, or will people die? Place your bets.
But
US politics has always been bewilderingly lax about regulating the financial interests of those in power. Members of Congress are allowed to buy and sell individual stocks, while being privy to all sorts of discussions and regulations regarding publicly traded industries. Nancy Pelosi has famously amassed a fortune during her tenure, to the extent that a “Pelosi tracker” allows others to follow her trades and mimic them in order to replicate the extraordinary gains she has made. The right to make money extends beyond office. Hillary and Bill Clinton parlayed decades of public service into a money-making machine, earning hundreds of millions of dollars from speeches and consultancies, accumulating more money than they will ever need.
The question that hangs over so much of Trump’s second term is whether he represents an acceleration of the dynamics that preceded him, or a new sort of politician entirely. The answer can be both, depending on the scenario. By openly boosting his and his family’s fortunes, he has violated norms that held that some enrichment from political office was acceptable, but not the brazen transformation of the White House into a private enterprise. In the way he has used the office to sell the Trump brand he has broken with political decorum, but matched and accelerated a wider culture of unscrupulous greed.
We might never know if these suspicious market transactions are directly linked to Trump, but we do know that he is well adapted to the current environment – a deregulated, rapacious, speculative political culture that is turning into one big, global, get-rich scheme.
