Front Burner - Is Trump rigging the markets?

Episode Date: March 30, 2026

Experts, market watchers and the authorities in Iran have accused the U.S. President of engaging in market manipulation surrounding the Iran war by timing military announcements around market opens and closes.On top of that, there have been questions of possible insider trading in connection to Trump’s moves. Last Monday, a spike of highly suspicious and extremely lucrative oil futures trades and prediction market bets took place minutes before Trump posted about the war winding down. It follows a pattern seen before around tariff policy, and the attack on Venezuela. To parse the accusations of market manipulation and insider trading, we’re joined by Mike Bird, the Wall Street editor at The Economist and co-host of The Economist’s Money Talks podcast. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

Every language is a note in the symphony of our heritage. Together, they create a harmony. SILENCE. TN. Languages TV channel. This is a CBC podcast. Hi, everyone. I'm Jamie Poisson. Depending on when you're listening to this on Monday, the big financial markets may not be open.

But regardless, it's likely that in... investors across the world are monitoring Donald Trump's social feeds. That is because many experts say the Trump administration is engaging in market manipulation surrounding but not limited to the Iran War. They've accused him of timing military announcements, for example, around market open and closed times. Last Monday, a spike of highly suspicious and extremely lucrative oil futures trades took place minutes before Trump posted about the war winding down.

There are also enormous prediction market bets that many say look to be made by people with insider information. And there are similar examples around tariff policy and the attack on Venezuela. Today, we're going to parse these accusations of market manipulation and insider trading with Mike Bird, the Wall Street editor at The Economist and co-host of the Economist's Money Talks podcast. What does he see happening here? And how different is it from stuff that we've seen before? Mike, hey, it's great to be. to have you on the show. Thank you very much having me. Good to be here. There are a number of questions

being asked right now, as I mentioned about both market manipulation on the president's part, as well as possible insider trading by those close to him and also the betting stuff. But let's start with the accusations of market manipulation first. This became a huge story last week after Trump sent out this post last Monday morning. Writing on truth social, Trump said he was pleased to report that the US and Iran over two days had had in-depth, detailed and constructive conversations. Iran later denied this, and this post actually came after a bunch of Trump comments over the weekend about escalating things. And so what did you make of that post last week and the timing? Yeah, so it's that move in oil futures very shortly before the post that I think got people

most agitated. Trading volume remained low until about 6.49 a.m. Eastern. When over just a few minutes, trading volume jumped almost 10fold. That spike went back down until about 15 minutes later when President Trump announced he was postponing strikes on Iranian power plants and energy infrastructure. And that caused a surge in the oil markets. Got to be careful in what we can say and what we cannot say about those sort of things. What we can say is that that was an enormously fortunate moment for someone to make a very, very large position. in all the futures market. The oil price move that came after that announcement

was a roughly 12% fall, which is enormous, absolutely huge. We've seen a lot of volatility, but that really is a very, very large move. You usually don't see anything like that in oil markets. So there was the potential to make a huge amount of money. We don't know who made the trade. It's certainly a pattern that would suggest

that maybe someone was either very confident about something about to happen or was actually informed that something was about to happen. I think what it speaks to is this fascinating and dangerous area where politics and financial investment and these new investment potential, these new speculation potentials around prediction markets all intersect with one another.

Because the prediction markets are very new, that's adding in a new element to it. But I think that the main thing that comes across from the Trump administration, and all of the news around this, is both, the administration is making a lot of decisions that are enormously market moving. We saw this with Iran, we saw it with Venezuela, we saw it with the tariffs. And you also have an administration that has lots of people in and around it, whose financial interests are very, very deeply tied up with things that the administration has a huge amount of influence on, whether it's crypto, whether it's prediction markets, whether it's all manner

of other business interests. This is a really sort of new thing. in the US. It's really not similar to any administration in modern history. And I think that's where a lot of the speculation and the concern about potential market manipulation comes from. On that oil futures trade, the really big one that you were talking about, you know, why do we not know who would have made that trade? Can anybody investigate that? Considering so many people think it's so suspicious, I mean, Paul Krugman, that, Nobel winning economist called it like potentially treason, right? Yeah, treason in the futures markets, I think was what Paul called it.

The honest answer is twofold. The first is that it's not the responsibility of a futures exchange to say whether a given trade is particularly suspicious or certainly not the whole responsibility. Those trades are not completely public. If you wants trade in oil futures or I want to trade in oil futures, I don't necessarily want people to know what I'm trading. So it's not open information. And unless they have a reason, a really, really good reason to reveal who's making certain trades, I think the general practice would not be to do it, unless there's a sort of legal order or subpoena,

something like that, which currently we have nothing like that. And the second part of the answer is that these are large global commodities markets. People operate through dealers and brokerages and intermediaries, and even in that case, it's not always obvious who's directly responsible. Even if you were a party to that trade, it wouldn't necessarily be obvious who you were making the exchange with. So, you know, you might hear about these things and think maybe there's some authority, some individual company or, you know, agency that has responsibility over these things. The answer is that it's always going to be muddier, a little bit more unclear. And a lot more private than people would say.

On Trump's part, these announcements that he's making sort of time to the opening and closing in markets, I saw a post that you wrote where you said, I think the fact that military action and major announcements now seem to be coordinating around market open and closed times is going to be one of the most fascinating and telling tidbits about this era slash administration. And just tell me more about what you meant there. Yeah, I think it's to get back to the fact that there are so many unusual financial interests segmented into big market moving events. Let's start with the fact that the Trump administration seems to be quite sensitive to market movements. We saw this during the tariff announcement last

April. We saw a very sharp decline in stock markets, in a number of other markets as well, in the value of the dollar, and we saw reversal about a week later. And this gave rise the idea of the taco trade. Trump always chickens out. Oh, isn't that I chicken out? I've never heard that. So this idea that Trump is quite sensitive to market movements and the administration is quite sensitive, is informing things here. Then again, with the extraction of President Maduro of Venezuela,

you saw this happen over the weekend. And lots of people talked to the time about the fact that it was interesting that it seemed to be timed around the fact that financial markets were closed at the time, even most futures markets were closed. And then since the attack on Iran, you've seen a number of instances in which announcements are either made immediately before, immediately after market closes. There seem to be quieter events during the week, and things seem to sort of peak around the beginning and the end of the weekend when futures markets are just about opening and just

about closing. Again, we don't have, you know, administration officials saying we're deliberately timing this around market events, but it doesn't seem to be particularly random, especially when these are really big market-moving things. Is there a more charitable explanation for why they're doing this than what a lot of people are jumping towards, which is personal enrichment? The charitable explanation, and it depends on the individual event that we're talking about, the charitable interpretation for some of them, for example, the extraction of Maduro would be, if you can get it all done during the weekend, you don't cause any market disruption, right?

market disruption is not good. The volatility causes all sorts of spillover effects. If you can do this while markets aren't trading, it's probably better to do it when markets aren't trading, right? With what's been happening in the last few weeks, that becomes very, very difficult to assemble as a sort of explanation as an excuse. But that would be the most sort of strong-maned way of thinking of this. It strikes me that Iran is like a much different beast here than the Trump tariff announcements and even Venezuela. Like, it just seems like the administration had more control over those events than their current event because, you know, it takes two to be able to do this, right?

Absolutely. I'm thinking about Mohamed Ghalibaf, Iran Speaker of Parliament last week, who just responded to that post by Trump saying that they were in talks by being like, no, we're not in talks. This is fake news intended to manipulate financial and oil markets and to escape the quagmire in which American Israel are trapped, right? Yeah, yeah. I think that's absolutely right. And I think both in the case that Venezuela was a military operation that was effectively over in a matter of hours.

And in the case of the tariffs, because the administration announced tariffs and most countries didn't retaliate, it was really a sort of single player game. you know, what what Donald Trump decides and what the administration decides matters and what anyone else decided was sort of irrelevant. So you could simply say, you know, this is on, this is off, markets move very dramatically in either direction. And it's extremely telling that the very announcement we're talking about, whether it was the suspicious looking oil futures bet immediately beforehand. All prices dropped by 12, 13 percent that day. By the end of the week, all prices had come back to exactly where they started the week, right? So the impact of that sort of immediate announcement sort of fades over time.

You can't keep having the same effect if you keep making these announcements again because there's multiple players here and because Donald Trump isn't the only person who gets to decide whether things are being resolved by negotiations. There is, by definition, another partner involved. Language is a note in the symphony of our heritage. Together they create a harmony. Scan Languages TV Channel. This message comes from Viking,

committed to exploring the world in comfort. Journey through the heart of Europe on a Viking longship with thoughtful service, destination-focused dining, and cultural enrichment, on board and on shore. With a variety of voyages and sailing dates to choose from, now is the time to explore Europe's waterways. Learn more at viking.com. So now let's dig into the predictive markets a little bit more here. The Guardian on Monday reported that there were a series of bets made last weekend by eight newly made polymarket accounts in favor of a U.S. or on ceasefire before there was any sign of one on the horizon indicating possible insider knowledge.

Eight new accounts on the crypto betting platform, Polymarkets, placed similar bets totaling about $70,000 on a U.S.-Iran ceasefire within 10 days. If successful, those bets could bring in around $820,000. On top of that, bubble maps, a blockchain analytics firm, as reported by CNN's Marshall Cohen, found that one trader on Polymarket has made almost a million dollars on the platform since 24 on a collection of well-timed five-figure bets, mostly on U.S. military actions, before they were announced with a win rate of 93%. And just, I know that you kind of address this a little bit already, but like talk to me more about how these prediction markets present a whole new

profiteering opportunity for those with privileged information. Yeah. So think of it this way. If I'm trying to make a bet on something happening in oil markets, and I'm thinking about that from the perspective of what the U.S. government might announce, there are a million things that influence oil markets. There are any number of things that could move them at any given time. What prediction markets offer is extreme precision where you can narrow down exactly what you're betting on, right? You can narrow it down to an extreme sort of binary yes or no outcome, which makes it extremely valuable if you know what that outcome is already, right? It's wildly useful for that. It means there's a proliferation of the number of things you can bet on.

Again, instead of thinking about it through the perspective of the normal asset market, where there's a few things that you might wager on, there are thousands and thousands and thousands of different questions. You can even start to, you know, make your own market in these things, establish your own question and take a side in it. So it's extremely useful for that reason. It's also extremely useful because this stuff is very, very rapidly growing and it's not regulated in the way that mainstream vanilla financial markets would be. It's partly because, for example, if you're trading in securities, you will come under the supervision of the Securities Exchange Commission in the US. Most prediction markets would not be classed as securities. And even the commodity futures trading commission, which does have most of the regulatory responsibility of prediction markets, is sort of playing catch-up because these things have been booming and it's not been a big area of focus for them. So there's a lag, there's a huge lag between regulation here and the activity that's actually happening, which is uniquely useful to people who are informed, you know, what you might call insiders. Legally, it's not clear that they are insiders.

Because again, that really just applies to securities law, but who are informed traders who know what's going to happen. So the opportunities for sort of avarice and making money on this with privileged information are enormous. Do you get the sense that regulators are trying to catch up here? I think they, I think American regulators, whatever you think of the current administration, none of them want to look at sort of poorly functioning winner-takes-all asset markets or any kind of market that is becoming sort of distrusted and, you know, aggressively speculated on. I don't think they do.

Maybe that's naive of me to say. But I think for the most part, this is a combination of things. It's the speed of a growing industry. It's the fact that because America has multiple financial regulators, the emergence of any new asset class, any new market, begins this bun fight between them over who exactly is in charge of them. Now, we've already had Paul Atkins, the head of the SEC, saying that, hey, actually some prediction markets will come under our jurisdiction.

Prediction markets are exactly one thing that where there's overlapping jurisdiction potentially, and you're right, it's mostly, at least currently on the CFTC side, but we need to be harmonized in the way we're addressing this market. In the same way that stock futures, for example, come under their partial jurisdiction. They say if you've got a prediction market, for example, where it's saying, I bet the S&P 500 will be above or below this level, that's essentially a futures contract. and they probably will want to have some involvement in this. I think most of it is just lethargy. It's just these are slow-moving regulatory institutions, and it's tough for them to be across everything all the time.

I think I will say that the Trump administration's regulatory cast of characters have a very, very naturally more sympathetic line to the idea of allowing financial innovation, even if it means letting regulation fall behind a little bit. They're very, very pro-financial innovation. The people I know at these regulators would not want to slow down the development of prediction markets by, in their view, over-regulating them. So they're happier playing catch-up than they are trying to sort of get ahead of things. In some cases, which when you have problems like these, I think, yeah, it can exacerbate.

The White House, of course, says that they don't tolerate any administration official illegally profiting off of insider knowledge. But I also want to talk about the Trump family's own ventures in prediction markets, right? So, I mean, you know, you have people in these positions that have kind of like an ideological view of regulation. But like Don Jr. is a strategic advisor to both Kalshi and Polly Market and an investor in Polly Market. And just what kind of concerns have those connections raised? Well, I think those connections are honestly just one of a number of. of extremely concerning business, sort of political nexus links.

The New York Times reported on March 13th that Jared Kushner is trying to raise $5 billion from governments in the Middle East for his own private equity ventures. He's the president's son-in-law. He's also peace envoy. He meets foreign dignitaries on behalf of the president. The same, more or less is true of Steve Whitkoff, who's another peace envoy, who co-founder of World Liberty Financial, which is the, Trump family partially owned crypto company. It's the issuer of the USD1 stable coin. It also took a

$500 million investment from an Emirati royal. You know, there are enormous, completely conflicted financial interests at the very highest levels of the administration. And prediction markets are one of them now. And there really is no historical comparison, I would say, for any of this, at least in modern history. You know, there's the long-running joke about the fact that Jimmy Carter was made to give up his peanut farm. Like, it feels like a very, very long time ago that that sort of concern about financial impropriety was so common at the highest levels of the U.S. government. Yeah. And just like some of these bets on January 2nd, a trader made $400,000 off a 32,000 bet that Maduro would be taken by the U.S.

the night before it actually happened, right? February at account trading under the username Mega, My Man made half a million bucks placing bets on Polly Market about Iran and its supreme leader just before Israel killed him. If everyone gets better at spotting suspicious bets, also couldn't America's enemies do so as well? Yeah, absolutely. I mean, okay, so to go to one of the original arguments around insider trading, there's always been an argument. from people who have a really free market orientation, that it's better to have insider information traded on because it means there's a more informed market price, right? So if you have the CFO of a company buying stock in a company because he happens to know the results that will be

released in in two weeks are really, really good, then that's better because it allows for more efficient market pricing reflecting the reality of things. Now, the last thing you want, if you're a national security official, is for the pricing on prediction markets related to U.S. reaction to reflect the reality of things. The reality of things is exactly what it is your job to disguise before they happen. So I think this will be another big element here, that there is a serious, there is a serious incentive on the behalf of the US government, especially in and around diplomacy, national security, defence to crack down on employees doing this. I think the main question is, if it's not done at a sort of central level, how do you monitor the fact that

your employees aren't doing this at any given time, right? I think probably treating it as seriously as you would treat, making sure that people know that you telling your brother, oh, you should put a polymarket bet on the US attacking Iran, is the same as you like leaking classified information through high profile cases. Maybe that will help. We've had this in Israel recently. Yes, I was just going to say. Yeah. Yeah. An Israeli reservist officer is suspected of using classified information and trading on polymarket in relation to the attacks on Iran last summer. And this is going through a court in Tel Aviv. Now, maybe that sort of thing will make people think, oh, actually what I'm doing is flagrantly

illegal. And I wouldn't, you know, I wouldn't leak government information. I wouldn't sell state secrets. So it shouldn't be doing this either. Maybe that will improve things. But it's so easy to do this that I think it's very, very hard to crack down on. I wanted to ask you about this bill that's going to Congress that would ban members of Congress, the president, executive level government employees and their spouses and dependents from betting on political events.

There's also a Senate bill that goes even further, seeks to ban prediction market bets on elections, sports, government actions, and military moves. I mean, with the Trump family's close ties to the industry and, you know, the people who are in position, around regulation, like, how likely is it that Republican lawmakers will actually back it on mass? I think it's difficult to imagine a very large majority of U.S. lawmakers signing off on something that they themselves want to do. So I think when it comes to, for example, war-related prediction market betting, you could quite possibly get a very large majority of lawmakers to say, yes, absolutely. You know, nobody should be doing these things. Because the vast majority of U.S. legislators, I presume, are not directly corrupt and do not want to trade on

national security secrets to make money. When it comes to stuff that's a little bit more vague, like stock trading in general, where it could be on information that they've gained in a privileged way, I'd be a lot more skeptical of the willingness of lots of legislators to engage in that. There are a lot of legislators that trade in stocks very actively. There are lots of legislators that have become significantly more wealthy during their time in office and have made extremely good financial decisions around their stock trading. I think there's going to be a lot more resistance to passing anything that seriously limits that.

We have the Stock Act, which has passed in 2012, which was designed to stop this to make clear that Congress is subject to insider trading rules, right, that privileged political information does apply here. I think in reality, again, it's so, so difficult to say that the privileged information that a Congress person comes across, for example, is, you know, informing their trading, right? It's so varied. There's so much difference.

It's not usually pieces of information like the price of X stock is going to go up 20% tomorrow. It's vague stuff about the regulation of certain sectors or the deregulation of certain sectors that they might hear ahead of time and be able to trade on. and it's very difficult to draw a complete through line. You have, I think, a lot of public distrust in this area already. You have ETFs, exchange traded funds that try to replicate the trades of Republican and the Democrat. Congress people, I think that stuff is politically poisonous, right? But as long as those people are allowed to trade, there will be people who want to replicate what they're doing.

Yeah, I follow one account that just basically, like replicates everything Nancy Pelosi does. It's interesting that Trump just last month pushed for a congressional stock trading ban. He shouted out Nancy Pelosi, the Democratic Congresswoman. And like, how are you sort of thinking about the ways Republicans and Trumps have recently thrown their support behind banning lawmakers from training stocks, given everything that we are talking about today? Yeah. I think it's a, it's pretty cynical, right, in the sense that, you know, if it applies to legislators, but not to people in the White House, it's like, you know, that's a pretty easy one to pull.

I think there's probably a lot of political thinking here. And you've seen this to some extent from the other side as well, you know, Democrat lawmakers who maybe have not been as concerned as they should be about the potential of Congress people, including some of their own Congress people, trading on privileged political information in their own stock portfolios who are now very, very upset about what's happening in the administration. There are differences of scale here. It's important to acknowledge that. But you're going to see a lot of back and forth based on where people think the political damage is going to land. And I think the administration supporting bans on stock trading among Congress people is a judgment on their part that they think

most of the damage is going to fall on Democrat lawmakers. I would interpret that, yeah, pretty cynically. Mike, this is really interesting. Thank you so much. Thank you very much for having me up. All right. That's all for today. I'm Jamie Poisson.

Thanks so much for listening. Talk to you tomorrow. For more CBC podcasts, go to CBC.ca.