>paying what in retrospect will have been an excessive price
This can be said about any negative price movement. You still get the same amount of oil you agreed to regardless of if the price goes up or down afterwards.
So if this sort of "insider trading" is bad, what does this mean for other sorts off strategies hedge funds do to get an edge, like flying helicopters to look at how full oil storage tanks are? Should that be banned too? The article basically argues that any sort of edge is bad because it disincentivizes others from participating.
edit: see my subsequent comment. I'm not saying corruption is good. The whole point of the article is that it's bad beyond just corruption, and that's the point I'm pushing back on.
> "The Trump administration is making no real effort to crack down on whoever is trading using inside information, and these inside traders are operating with a complete sense of impunity, assured that they can get away with it."
> At 3:40 AM ET today, nearly 10,000 contracts worth of crude oil shorts were taken without any major news... At 4:50 AM ET, just 70 minutes later, Axios reported that the US is “close” to a “memorandum of understanding” to end the Iran War.
Depends on what your brokerage allows, see timestamps.
What if it's not insider trading and in fact the Trump inner circle has been compromised and foreign actors are trading on the news? You might think they wouldn't want to expose themselves just to make some money on oil futures, but at this point, they are bringing in billions.
Look at Adobe stock 10 minutes before the Claude Design announcement came out… the volume spike there is out of the ordinary and I find it hard to believe it’s a coincidence, someone knew something. The level of blatant insider trading at the moment is pretty wild
Insider trading laws are for the plebs. Tip off your cousin about an acquisition by a public company? Go to prison. Tip off your cronies about war? Business as usual.
I remember one take I had in 2024 after the election.
We're all familiar with some of the "defund the police" experiments that went too far in places like Portland and San Francisco and resulted in things like epidemics of casual shoplifting.
Well, what we just did is basically the white collar crime equivalent. We now have a wide open free for all for all forms of white collar crime. You can just insider trade, launder money, commit investment fraud, anything you want, the way you saw random people just walking into CVS drug stores years ago in SF and grabbing stuff and walking out.
But as usual when someone steals $100 worth of stuff on the street that's a national crisis and those people are scum, but when people steal billions that's fine cause they're wearing suits.
The corruption is a welcome byproduct of Trump's role as a Reality TV host who has to keep the conflict going and Hormuz closed.
The fact that he is talking peace again now is just because he cannot attack before the meeting with Xi in mid May.
The real issue is US energy dominance and control of the sea routes. Which Krugman does not mention, because the effort is bipartisan and he probably likes it. The US literally has a National Energy Dominance Council:
It is designed to subjugate and increase EU and Asian dependencies on US exports. The EU committed to buying $750 billion in US energy exports. LNG terminals in Alaska are being approved to make Asia dependent on US energy.
This process is accelerated by the emerging forever conflict that will keep Hormuz closed. It won't be a full scale war, just pinpricks so that shipping companies don't dare to cross Hormuz.
Maybe China is able to pressure Iran in a way that the US can no longer pretend it has the right to intercept Iranian ships. But Russia is another factor:
The closure of Hormuz benefits both Russia and the US and the EU is too incompetent to negotiate Trump-style and threaten (it does not necessarily have to happen) to resume Russian imports. In an ideal world it would also block US vessels from entering the Baltic sea, because since the Greenland and now the overt Gulf energy threats the US is no longer an ally.
Look in the general sense that retail traders lose money you are right but that applies to all markets, sports betting and casinos. However I and many of my friends live in houses paid for with profits made from futures trading and none of us have inside info or supply commodities. It takes discipline, skill, risk management, emotional management and drive to make it happen but it does happen.
What if the whole point of the war was planned to generate trading opportunities? Every crazy tweet or announcement another cash out.
It's like every time you see a poorly run business and you think, how can they stay open? The answer is it's usually a laundering operation, a tax shelter, and who knows what else. The message to us poors is, nothing these people do is as it appears; there's always a bunch of stacked, leveraged advantages.
Heard of the documentary, "Everything is a Rich Man's trick"? It's quite eye opening, and makes this similar conclusion with evidence pointing to the Rich Men through history. Highly recommend a watch.
I have been thinking about this a lot lately. If you look at effects of geopolitical events and who profits and loses, rather than stated intentions. This global oil crisis, the Ukraine crisis, tariffs ect. It's the equivalent of the "the purpose of the system is what it does".
Oil crisis: Trumps friends profit on insider info, US oil industry (also his friends) profits, Russia profits because they are another big oil producer, USD dominance is harmed (also helps Russia), everyone else in the world eats the costs
Ukraine: Russia bleeds, Ukraine bleeds, arms industry profits, politicians in general get something to grandstand on in front of the voters. Personally I believe that this conflict has been artificially prolonged just to amplify the effects
Tariffs: US public eats the costs, Trump profits politically by appearing strong, Trumps friends profit on insider info
50 comments
[ 2.8 ms ] story [ 76.9 ms ] threadThis can be said about any negative price movement. You still get the same amount of oil you agreed to regardless of if the price goes up or down afterwards.
edit: see my subsequent comment. I'm not saying corruption is good. The whole point of the article is that it's bad beyond just corruption, and that's the point I'm pushing back on.
I think this sums it up.
Depends on what your brokerage allows, see timestamps.
We're all familiar with some of the "defund the police" experiments that went too far in places like Portland and San Francisco and resulted in things like epidemics of casual shoplifting.
Well, what we just did is basically the white collar crime equivalent. We now have a wide open free for all for all forms of white collar crime. You can just insider trade, launder money, commit investment fraud, anything you want, the way you saw random people just walking into CVS drug stores years ago in SF and grabbing stuff and walking out.
But as usual when someone steals $100 worth of stuff on the street that's a national crisis and those people are scum, but when people steal billions that's fine cause they're wearing suits.
Good for them, I guess.
The losses of market participants and the gains from insiders is difficult for me to take seriously as a problem in commodities market
I read all of the cases in the article
The fact that he is talking peace again now is just because he cannot attack before the meeting with Xi in mid May.
The real issue is US energy dominance and control of the sea routes. Which Krugman does not mention, because the effort is bipartisan and he probably likes it. The US literally has a National Energy Dominance Council:
https://www.politico.com/newsletters/west-wing-playbook-rema...
It is designed to subjugate and increase EU and Asian dependencies on US exports. The EU committed to buying $750 billion in US energy exports. LNG terminals in Alaska are being approved to make Asia dependent on US energy.
This process is accelerated by the emerging forever conflict that will keep Hormuz closed. It won't be a full scale war, just pinpricks so that shipping companies don't dare to cross Hormuz.
Maybe China is able to pressure Iran in a way that the US can no longer pretend it has the right to intercept Iranian ships. But Russia is another factor:
The closure of Hormuz benefits both Russia and the US and the EU is too incompetent to negotiate Trump-style and threaten (it does not necessarily have to happen) to resume Russian imports. In an ideal world it would also block US vessels from entering the Baltic sea, because since the Greenland and now the overt Gulf energy threats the US is no longer an ally.
hard to win at a game where 97% fail in the long run.
And every time an article like this is published, HN predictably goes into the same tirade.
What are you actually going to do about it? Nothing. So keep complaining and hoping things change without changing.
- Paul Krugman, 1998
Excuse me if I take the Krug-o-tron's opinions with a grain of salt.
It's like every time you see a poorly run business and you think, how can they stay open? The answer is it's usually a laundering operation, a tax shelter, and who knows what else. The message to us poors is, nothing these people do is as it appears; there's always a bunch of stacked, leveraged advantages.
https://newrepublic.com/post/192244/trump-celebrates-destroy...
Oil crisis: Trumps friends profit on insider info, US oil industry (also his friends) profits, Russia profits because they are another big oil producer, USD dominance is harmed (also helps Russia), everyone else in the world eats the costs
Ukraine: Russia bleeds, Ukraine bleeds, arms industry profits, politicians in general get something to grandstand on in front of the voters. Personally I believe that this conflict has been artificially prolonged just to amplify the effects
Tariffs: US public eats the costs, Trump profits politically by appearing strong, Trumps friends profit on insider info