Treason in the Futures Markets
paulkrugman.substack.com
paulkrugman.substack.com
Even if they found the culprits, what's a judge's verdict against a presidential pardon?
This is bad logic. A presidential pardon at least exposes the corruption, and exposing the corruption is more important than a prison sentence.
We've very little doubt its happening, and it does us no good if there arent actions taken against it.
Flynn just got large payout as reward for breaking the law for Trump.
That is why.
The question is not if it can be investigated it’s if it will be and what will happen with the findings.
The first thing the Trump admin did in its second term was gut the anticorruption offices and the cftc.
This is actually not new in this administration. Last year the president posted on social media telling people to buy stocks a few hours before he announced tariffs (https://apnews.com/article/trump-truth-social-djt-tesla-musk...).
The bigger problem isn't whether or not it can be traced, or if it should be traced. It can and it should. The central issue at stake here is the sale of government secrets to private and (presently) anonymous groups for profit. The author is stating that since we don't know who the trader of that commodity is, and because that commodity's price is tightly coupled to actions related to the war, that trader could be helping enemies of the U.S. Without the knowledge of who the person is, or how they knew to make such a huge market movement, a claim of treason can be argued.
The biggest problem is the intelligence community is heavily rooted in trust. Movements like these signal there's an intelligence leak to the general public, or more appropriately, someone with $580 million lying around. An intelligence leak reduces trust; allies are less likely to share information if it's leaked. Conversely, trust is returned when the leaks are found and plugged, and measures put in place to prevent those leaks in the future. The author is stating that these leaks are unlikely to be plugged, which will reduce trust in American intelligence. After all, as the president said, "Let's say I was gonna do it or let's say I wasn't gonna do it, why would I tell you?" (https://www.bbc.com/news/live/c4gqjyk0vx3t)
Except he is telling someone, and that someone is making a lot of money.
"US SEC's ex-enforcement chief clashed with bosses over Trump cases before leaving, sources say":
* https://www.reuters.com/business/finance/us-secs-ex-enforcem...
"SEC enforcement director quits":
* https://www.cfodive.com/news/sec-enforcement-director-abrupt...
The head of the SEC didn't want the SEC's investigation division to investigate (certain things).
2. Crypto is a unique and new player in banking and securities. Specifically, the ledger is open to all and very transparent. In order to know which wallet owns what and how much, you need to be able to look at the ledger to confirm. This design is intended to prevent fraudulent transactions. Banks and brokerages don't keep an open ledger, they keep an extremely private and heavily secured database.
3. People are heavily disincentivized to disclose this information. See: Epstein, and the people and companies that did financial business with him. Openly telling the public you sold stock to someone who trafficked underage girls isn't good for your reputation.
4. Futures in this case are similar to stocks. It's literally a market: You put in a bid to buy or sell something, someone else accepts, and both parties agree to a contract. Digital trading systems match buyers to sellers, and does so on behalf of both parties. If you trade using Fidelity and place a bid for 1,000 units of Corn at $500/unit, you might end up buying from Chase. Even if the transaction is in-person, the trader may be acting on behalf of someone else. In the case of the $580 million deal, it was spread over 6,200 contracts.
5. The STOCK Act of 2012 was supposed to prevent this, at least for members of Congress. The PELOSI Act that's currently introduced for voting is supposed to further prevent this.
6. To my original point: the problem isn't that these trades occurred. The problem isn't even that it's almost certainly insider trading. The problem is that government secrets are being leaked. The authors argument is that it almost certainly won't be investigated and any attempt at investigation will be blocked, because the level of corruption in the current administration is such that the sale of state secrets for others to profit off of is permissible. In fact, they can brazenly do it in the open while still ensuring that their privacy will be kept because of #1.
Very interesting. I wonder how much good a publicly transparent trading system would do. And what downsides there are, of course.
The CME uses a system where orders (and fills) are entered via a direct TCP/IP connection between the trading system and the exchange. There is no opportunity for any system besides the trading systems (computers, switches, etc) on each side to see the order.
The CME then distributes the market data to a variety of paths in the form of price updates to an order book. That is the price and quantity of buy and sell orders at each price point. While these data feeds aren’t public, the cme gets paid for the data, it is widely disseminated, but it’s had the trading system identification removed. This whole story comes from people with market data contracts observing these feeds.
There are other exchanges that provide more information about who is entering orders but infrequent but large participants don’t like this because it allows the market makers an information advantage against them. And large block participants tend to correlate with real economic activity (oil producers and consumers for instance).
If a market maker knows an order is for one of these participants they can presume the size is going to be bigger and thus charge more for liquidity (in the form of of widening the price on their bid/ask spread offerings). Half the job of a modern HFT is predicting this sort of thing.
So the cme keeps it this way so one set of their market will keep using them. It’s part of the balancing act a two sided exchange has to navigate.
The fact that nobody seems particularly surprised by it suggests that the damage is long since done.
The current administration does, however, throw the term around against its political enemies quite a bit, as have people in general pretty much throughout history.
In the past we had to pretend to be civil, and that illusion let us get back to work between elections. The utter disregard for the law forces us to grapple with the fact that they have so little respect for us that they will not care if there isn't another election.
How about when combined with all the tariffs, which seem designed to be market levers and/or just vindictive acts?
Pushing businesses to the edge, plunging people into poverty, so your cronies and you can drain money from the stock market?
Or taking bribes using crypto? Or ...
They all seem treasonous - actively harming your own country to enrich yourself.
Even if you don't find them treasonous, you have to admit they're in contravention to the emoluments clause; so Congress should still impeach the evil bastard.
And we haven't even started on his crimes beyond the simple financial ones from the last year!
“Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort.”
So no. None of those things is treason. This administration throws the word around loosely, like many authoritarian regimes, but the founders had direct experience with a dictator who used treason charges as a political weapon and tried to ensure that wouldn’t happen here.
For the administration as a whole... Honestly, as disgusted as I am, I can't think of a case where a significant fraction of the country looked at a treasonous action and said "yeah, I'd vote for that again".
When his supporters turn against him he will be impeached. Until then, it's just the suicide pact called the Constitution.
Wti is much easier. Lots of real economic actors that produce or consume oil are active in those markets.
Even when you are a passive investor you lose. You essentially buy shares at random points in time. When that point happens to fall between the trading of an insider and the public disclosure of the insider information you will get a worse price for that trade.
It isn't even relevant whether the insider buys stocks or other securities directly or trades in futures instead. All information you enter into the market through trades permeates the whole market through arbitrage regardless of where you enter that information.
There's a reason we have banned and prosecuted any hint of insider trading or match fixing for centuries. Yet we play dumb on way more serious risks, allowing betting on whether a country will attack another and labeling it "information hedging and price discovery".
I can't but look at the modern world with worry. We live in increasingly Orwellian and dystopic times. The world has never been so rich and evolved, yet, as a society, we're increasingly unhappy, alone and void of purposes that aren't greed and selfishness related.
We're looking at the decadence of a civilization and all we can do, at best, is post about it over the internet, and that's when we're in the aware crowd not falling for bitter insulting and fighting because somebody else holds different ideas.
I would really want to know what can we do, as average Joes, when the most powerful people in the world fall in line and are terrorized to speak their mind. And that's when they're not actively contributing to the very same decadence.
See how many vile, empathy-void sociopaths are elected across the world because they have the political skills required to make things happen.
What I try in practice is to lead by example, and be a good neighbor/citizen. In my village, 90% of the people would rather bitch about the mayor or public services not cleaning up the park for months or years, when you can simply grab few plastic bags and clean most of it in few hours. I'm glad my initiative has pushed more citizens to actively care and take matters in their hands.
Yet the scope of degeneracy and risks are now at the global stage and I don't think I can do much when people with the wrong incentives are elected in office, if there's elections at all.
The only problem is in the name. It's clearly just to score political points. I'd be surprised if it gets approved.
I can only imagine the GP mentioned the PELOSI act (which, as I recall, was cosponsored by Nancy Pelosi and blocked by Republicans) because it was designed to be partisan messaging.
[0]: https://www.congress.gov/bill/119th-congress/house-bill/5106...
[1]: https://www.politico.com/live-updates/2026/03/25/congress/la...
I'm not trying to split hairs here. There's been plenty of weird coincidences and each should be investigated, and on the balance of probability at least one may well be insider trading at the highest echelons. And in any case, in any financial job you need pre clearance for trades, often justifying why you're doing them if they are odd enough. There are minimum holding periods, day trading is not allowed, and the full record auditable by regulators. It is insane to me that politicians are not subject to such rules and it must change.
But to conclude that a weird trading pattern is definitely insider trading is IMO cheap. It's like TV drama where the unemployed, wife-beater-wearing husband definitely killed the wife, end of story.
The real tragedy IMO is that this is really avoidable. It would take very basic, very standard regulation to stamp this out, and we wouldn't be debating this in a technology forum.
$580 million sales of oil futures and probably similar amount of buys in stock futures means $1T quick billion move.
Nobody makes half trillion __trades__ for weird reasons and this was too short to be movement of sellers in general.
It's not even a given at this point that all these trades come from one person. In fact I doubt they do - because most brokerages would simply not allow you to put this trade. It could well be a huge trade, but a fraction of the 6200 that changed hands, then HFT algos jumping in in the action.
Which is all investigable, and should be investigated.
However as the article notes the time and size of this particular series of trades makes it look suspicious and that’s all one can say with certainty at this point.
How's this a coincidence?
Trump has boasted about this, that's the point we're in.[0]
They're announcing in a newsletter a fund raising where they will share national secrets with donors.[1]
This is literally people paying to get access to privileged information, in a fund raising for what?
Like it's openly being said that if you pay enough money, you will make a lot of money, this is unprecedented.
Trying to normalize it by saying "it's not corruption because it's done out in the open", or to bend reality to make an excuse for this, like it's a coincidence... it's insanity.
This could very well be the end, if the game is rigged at this level - and people trying to get as much out as possible while it lasts, while acting like no one understands what's going on, it's one of the scariest things I've witnessed. It's like we're falling off a cliff and people are shoving money in their pockets while saying "we're not falling, it's just the wind".
This was 6-8x the size all the existing trades on market combined, with zero other publicly available information early on a Monday morning 15 mins before an announcement that significantly moved the market.
Not even the biggest hedge funds in the world with coked up yolo traders go make 1.5 billion dollar bets like that, it simply doesn't happen.
It's egregious and blatant insider trading. The position got closed not long after the news came out.
Those contracts have between 8-15x leverage depending on margin rules.
This doesn’t remove the corruption problem but it brings the number down into realistic values. And while the volumes were odd for the overnight they aren’t that strange for normal hours trading.
There's no doubt it's very dirty business. I just find it lazy thinking to say, hey this one is very suspicious therefore definitely criminal.