Insider Trading? Or Just Another Day in Trump’s America?

Summary

Bulwark Takes Episode Summary: "Insider Trading? Or Just Another Day in Trump’s America?"

Release Date: April 10, 2025

In this incisive episode of Bulwark Takes, hosts from The Bulwark delve deep into the murky waters of insider trading allegations amidst the tumultuous landscape of Donald Trump's America. Hosted by JVL and Sam Stein, the discussion navigates through recent market anomalies, potential legislative oversights, and the broader implications for the U.S. economy. This summary captures the essence of their conversation, highlighting key points, notable quotes, and critical insights.

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1. Pause on Trump Tariffs and Market Reactions

The episode opens with JVL and Sam Stein addressing the recent pause in Trump's tariffs, a move that has sent ripples through the financial markets.

JVL sets the stage by acknowledging the partial and uncertain nature of the tariff pause:

"The Trump tariffs are paused. Kind of, sort of maybe for some people. We'll see, huh?" [00:24]

Sam Stein elaborates on the market's response, highlighting suspicious trading activities preceding the official announcement:

"It began picking up steam last night where people noticed that early in the day, Trump had, before he did his complete reversal, he had tweeted something akin to a it's a great time to buy." [00:56]

He underscores the possibility of insider trading:

"Some revelations will happen. It's time to ban insider trading in Congress." [02:51]

2. Potential Insider Trading and Legislative Oversight

The conversation shifts to the integrity of congressional trading practices. Sam points out the heightened scrutiny on lawmakers' stock transactions:

"All member of Congress who purchased stocks in the last 48 hours should probably disclose that." [02:34]

JVL brings in a sense of urgency and frustration regarding regulatory bodies:

"It's a good thing we still have three people left of the SEC to, to go in." [02:51]

They discuss the broader implications of such activities, questioning the ethical boundaries within the current administration.

3. The Thin Line Between Market Influence and Manipulation

Delving into the complexities of market manipulation, JVL references Matt Levine's perspective from Bloomberg, questioning the definition and boundaries of insider trading:

"And the point Matt Levine deals with this is. He says everything is securities fraud." [04:28]

Sam concurs, highlighting the potential legal ambiguities:

"You just legalize the fraud." [05:15]

They draw parallels with high-profile figures like Elon Musk and Roaring Kitty (famously associated with the GameStop short squeeze), illustrating how influential actions can sway market dynamics, often blurring the lines of legality.

4. The Crucial Role of Bond Markets and Economic Stability

A significant portion of the discussion centers on the bond market's reaction to Trump's policies. JVL emphasizes the bond market's fundamental role in the economy:

"The bond market is the market for debt, right? And it is how credit is allocated." [07:02]

He elaborates on the recent surge in the 10-year treasury yield:

"Since we began this amazing tariff adventure, the Yield on the 10 year treasury went up 17%, which is a tremendous amount." [07:25]

Sam and JVL debate the Trump administration's apparent misunderstanding of market mechanics, critiquing the belief that political maneuvers can effectively negotiate with or manipulate market forces:

"You can't coerce the market. You can't manipulate it for a little bit in the short term." [08:31]

5. Long-Term Implications for the U.S. Economy and Global Standing

The hosts delve into the potential long-term consequences of the current administration's policies. JVL warns of the erosion of America's standing as a safe haven for global capital:

"The bond market seems to have rendered a verdict. America is not a safe place to do business day to day anymore." [08:39]

He further articulates the peril of losing the U.S. dollar's status as the world's reserve currency:

"Maybe we need a basket of currencies, maybe we need Euros, maybe we need renminbis, then that is going to fundamentally alter the entire economics of the American economy." [12:52]

Sam echoes the gravity of these developments, stressing that while these issues may seem esoteric, they are of paramount importance:

"But it's incredibly, deeply, deeply important." [13:13]

6. Concluding Thoughts and the Path Forward

In their closing remarks, JVL and Sam highlight the perilous path the U.S. is treading under Trump's leadership, marked by short-term gains overshadowing long-term stability:

"You can't run a country like that in a successful way." [11:14]

They caution that the dismantling of established financial and legal safeguards may take decades to rectify, underscoring the urgent need for systemic reforms to restore trust and stability.

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Key Takeaways

• Insider Trading Concerns: The episode raises serious questions about potential insider trading activities linked to Trump's tariff actions, emphasizing the need for stricter regulations and transparency within Congress.

• Market Manipulation Risks: The discussion highlights how influential figures and unpredictable political decisions can distort market operations, posing risks to economic integrity.

• Bond Market as Economic Indicator: The volatile bond market serves as a barometer for U.S. economic health, with recent spikes indicating diminished investor confidence.

• Long-Term Economic Stability: The potential loss of the U.S. dollar's reserve currency status could have dire ramifications for global economic dynamics and domestic financial health.

• Call for Systemic Reforms: The hosts advocate for robust reforms to safeguard against market manipulations and restore the foundational stability of the American economy.

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Notable Quotes:

• "You can't coerce the market. You can't manipulate it for a little bit in the short term. In the long term, it's too big and diffuse and powerful." - JVL [08:31]

• "Maybe we need a basket of currencies, maybe we need Euros, maybe we need renminbis, then that is going to fundamentally alter the entire economics of the American economy." - JVL [12:52]

• "But it's incredibly, deeply, deeply important." - Sam Stein [13:13]

This episode of Bulwark Takes provides a thorough analysis of the intersecting issues of insider trading, market manipulation, and economic policy under Trump's administration, offering listeners a critical perspective on the challenges facing the U.S. economy today.

Transcript

[Ryan Seacrest]

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[JVL]

No purchase necessary VGW Group void where prohibited by law 21 + terms and conditions apply. Hello everyone, this is JVL here with my bulwark colleague Sam Stein. And the Trump tariffs are paused. Kind of, sort of maybe for some people. We'll see, huh? And Sam, in the wake of this, as everybody is picking up the pieces today, it seems that some people did really well in the markets yesterday.

[Sam Stein]

Yes. So this was kind of, wow, what great luck. Yeah, it was either expected or corrupt or both, I suppose. But this was, it began picking up steam last night where people noticed that early in the day, Trump had, before he did his complete reversal, he had tweeted something akin to a it's a great time to buy. And that kind of, you know, piqued interest, obviously. And then it was observed that right before, like, you know, 90 minutes, maybe less, before he actually issued that statement on truth saying, hey, I'm going to go with this pause, an inordinate amount of trading activity took place. Yeah. Now look, I'm just a simpleton who knows, right? But it strikes me that this is the easiest way to make a huge amount of money, which is Trump gives you a heads up that, hey, I'm going to actually put a 90 day pause on these things. And the first thing you do is you say, you know what, I bet the Dow is going to skyrocket off of this. And, and lo and behold, it does. Now the reason it got kind of juicy though is that first of all, there, you know, there's going to be some revelation about whether members of Congress made transactions in this time period because they are required to divulge what kind of transaction they did. And last night, Alexandra laws are super duper straight. Yeah, exactly. Very, very straight, very tight. There's no way to get around it, Alexandra. But Alexandra Casa Cortez, I will just say this, this is very intriguing. She tweets last night, any member of Congress who purchased stocks in the last 48 hours should probably disclose that. Now, I've been hearing some interesting chatter on the floor. Disclosure deadline is May 15th. We're about to learn a few things. It's time to ban insider trading in Congress. We can get to that last point later. But it, it seems like, look, there's a lot of chatter that went down and I am guessing that at some point some revelations will happen.

[JVL]

Yeah, I mean, this is my Claude Rains moment. I am shocked, shocked. You know, it's a good thing we still have three people left of the SEC to, to go in.

[Sam Stein]

Do we even have that many? Yes, we have the 3 commission. Yes. Okay.

[JVL]

It's, you know, so there is, there is an interesting philosophical question here about what is, what is insider trading? What is market? And my, my boy Matt Levine from Bloomberg wrote about this earlier in the week. Roaring Kitty. You may remember Roaring Kitty from the, the film Dumb Money. He was the Redditor who basically organized the short squeeze on GameStop.

[Sam Stein]

Okay.

[JVL]

And he tweeted out or posted I don't even know where, but I think it was a tweet, simply a picture of a video game controller, at which point gamestop stock went whoop right back up again.

[Sam Stein]

Amazing.

[JVL]

And is that market manipulation? Who can say, right? Elon Musk goes out and buys a bunch of dogecoin.

[Sam Stein]

Right?

[JVL]

Dogecoin, not a security technically, so it's not marketing. And then announces, I've just bought $11,000,000,000 worth of doge.

[Sam Stein]

Right.

[JVL]

Dogecoin goes up. Is that market manipulation? Right. And so this is, I mean, again, there is an esoteric question and what the way Matt Levine deals with this is. He says everything is securities fraud.

[Sam Stein]

Would you define, are you in the Levine camp? I mean, it seems to me sort of that it is.

[JVL]

Yeah. I mean, what Matt says basically is that everything is securities fraud. Okay. And I think I kind of go with that. And the point of the government is to try to create arbitrary fences around this in ways that are, that basically make sense to try to protect consumers. Like, that's the. Because the truth is, yes, everything is securities fraud. And not all these rules, like, can be extended all the way out to the horizon. They can't be real, real hard and fast, but you have to make them. I think the Trump administration's view is, no, everything is securities fraud and it's all legal now.

[Sam Stein]

Yeah.

[JVL]

Ain't no law in.

[Sam Stein]

You just legalize the fraud. I mean, this is, to your point. I mean, this is the one of the many downsides of investing all this market moving capacity in one person's portfolio. Right. Like Trump can get up tomorrow and say, you know, what tariffs are back on, like, and I think, you know, if anyone has talked to Trump in the preceding, you know, minutes or hours, they would, you know, move to inoculate themselves from that. So we're in a really bad place when it comes to this type of fraud. When a guy like Walter Bloomberg can tweet something erroneously and the market goes up, 4,24,000,000,000,000, in market value goes up and then suddenly he's like, oh, no, he misread the Fox News clip.

[JVL]

Yeah, this is, Yeah, I mean, it is, it is almost like a classic literary trope. I feel like there's an Evelyn Waugh novel in which some journalist become disgraced because he reports the death of a prime minister and the stock market crashes or something like that, but the Prime Minister is not actually dead. And that's the world we live in for real now.

[Sam Stein]

But then you find out that the journalists had been trading on the news or something like that.

[JVL]

Yeah, right, something like that.

[Sam Stein]

Well, let me ask you, stepping back, what did you make of, what do you make of Trump, I guess, backing down because of the bond market? And what do you think is going to happen in 90 days?

[JVL]

Yeah. So this is the part where everybody's going to click stop on the YouTube. Nobody wants to talk about bond markets, but it's, it's kind of the most important thing. I remember during the Clinton years, I think, I think it was James Carville, but it might have been Bill Clinton himself who complained. The exact quote, I don't remember, but it was something like, it turns out I'm President United States and I can't do any fucking thing without looking to see what the bond market will allow me to do.

[Sam Stein]

Okay?

[JVL]

And so here's what the bond market is. The bond market is the, the market for debt, right? And it is how credit is allocated when so. And without the bond market, you can't get credit. Without credit, financial markets can't function. So this is why the bond market is, is vitally important to the underpinnings of the entire financial system.

[Sam Stein]

Right.

[JVL]

So what does the bond market measure? It basically measures risk. The bond market is where, as William Cohen from Puck says, is where risk goes to hide. And what we have seen was since, in the two weeks since we began this amazing tariff adventure, the Yield on the 10 year treasury went up 17%, which is a tremendous amount. After Trump announced the pause in the tariffs, it only ticked down a tenth of a point.

[Sam Stein]

And then it went back up, right?

[JVL]

I don't think so. I think it's settled yesterday at 4.4. It may be back up today. But the point is, the Trump administration was clearly hoping for more. They were hoping that the bond market will be reassured, and it was not. Because the thing is, you can't negotiate with a market. This is what Trump doesn't quite understand. You know, he like, it's all out of the deal. It's all negotiation. You can't, there is no counterparty in a market. Right. You can't, you can't, you can't coerce the market. You can't, you know, you might be able to manipulate it for a little bit in the short term. In the long term, it's too big and diffuse and powerful.

[Sam Stein]

And what's your theory as to why it ticked up? Is it just instability and people were not risk, couldn't trust people, couldn't trust the US Economy in the long term.

[JVL]

Correct. And so what happened is the bond market seems to have rendered a verdict. And that verdict is America is not a safe place to do business day to day anymore because we have no fucking idea what the rules are going to be in five minutes and then in five days and then in five weeks. And without that, you can't, if you're a business, make plans about building a factory. You can't even project what your earnings are going to be next quarter because you don't know what demand is going to do. You don't know what your costs are going to do. And all this is like flashing warning lights saying, don't do business with America. Go do it someplace else where the rules are more stable.

[Sam Stein]

And that's why, and that's why the 90 day pause doesn't really make sense. If we're going to be back in the situation in 90 days. And if this is just a subject of like 70 separate negotiations for individualized trade deals, I can't imagine that's going to provide any sort of long term stability that the people who are interested in the bond market are going to create. So, and also you have people coming out like Kevin Hasset being like, you know what, we're never negotiating this 10% tariff level. It's like you just say, just never.

[JVL]

Negotiating before and then saying, of course we did, because it's all about negotiation. This time we're really never negotiating.

[Sam Stein]

And that's why it's like, you know, this whole notion that, well, he's such a genius and there's no real downside to doing all these, you know, series of negotiations and bluffs and deals. Miller, is because your word Loses value and people don't believe you anymore. And countries aren't going to invest in America because they find it too unstable.

[JVL]

Yeah, and this is the problem. These things don't go back together again. Like, we spent 80 years building up the rule of law and business practices and regulations which made the market a safe haven for capital. And once you break that, it's going to take like another 80 years to rebuild it.

[Sam Stein]

Well, the other, the thing that really tickled me was a couple days ago, the tariffs were still on, but we were in the phase where we were having discussions with countries about individual deals and China was the more, the most hostile one. And I forget who said it, but they're like, you know what, we're going to get all these Asian countries together and we're going to isolate China by crafting a big trade negotiation like that sounds just like the Trans Pacific Partnership that you pulled out of in 2017. We should have thought of that. But to your point, when you don't have long term planning and thinking, you lose that, you lose sight of these things. And I think that's the real, I mean, that's the real problem with what's been happening over the past 10 days is that we're just going to have no long term thinking.

[JVL]

I mean, that's so that's part of it. But the more foundational problem is that Donald Trump does not imagine that the United States has interests independent of Donald Trump.

[Sam Stein]

Exactly.

[JVL]

And so he views, you know, les tassez moi that he is the state. And so what makes him happy in this moment is what's good for America. And there are no long term interests in America that extend beyond his trip on this mortal coil. And like, you can't run a country like that in a successful way. I just want to very quickly dip back into bonds. The Chinese hold something like $760 billion worth of treasury securities at the next auction. If the Chinese just decide to not buy more or to buy fewer, that is going to drive the yield up and it's going to fuck with the bond market in ways which are retaliatory. But Trump can't do anything about, like, he just doesn't seem to have thought of this. And like all of this. The real, like, scary, scary thing is drives at the heart of does the dollar remain the world's reserve currency? Because that is like a nuclear umbrella, like the single most valuable thing America has in the world. And if a decade from now that's gone, like, it's not going to be gone during Trump's years. But if, if America becomes risky enough that the rest of the world decides we can't just go to the dollar, like we have to make alternate arrangements. Maybe we need a basket of currencies, maybe we need Euros, maybe we need renminbis, then that is going to fundamentally alter the entire economics of the American economy because, like, our ability to run debts and deficits to pay for our entitlement programs and Medicare and Social Security just evaporates if that happens. So, like, this stuff is all boring.

[Sam Stein]

But it's incredibly, deeply, deeply important. Yeah. All right, man. Good note to end on.

[JVL]

Yeah, it's great. Hey, good luck, America. Follow the feed. Hit like hit subscribe. Be here with us, the bulwark as we rocket sled to hell together.

[Ryan Seacrest]

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[JVL]

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