Rigged?

News broke this week that the president of the US has been selling insider information.

For a hundred grand a month people can buy advance access to his Truth Social posts, seeing them before they go live online. Since what the leader of the foremost economy says matters to the markets – launching military strikes, enacting tariffs or changing regulations, for example – the posts can move billions in moments. Knowing these things before others constitutes opportunity. And a crime, of course.

If Trump were a CEO selling advance knowledge of quarterly earnings, he’d be in jail.

But, there it is.

Through his media company Trump’s data feed, “Truth API” sells the info to high-frequency trading firms immediately before it’s published, giving enough time for a gush of trades. This advance knowledge of government actions, policies and intentions allows the wealthy to act and profit on market-moving facts before the public is even aware.

Apart from the obvious fact this is the most corrupt leader in American history, it kicks up a vital question: can you trust the market, when even the president cheats?

As mentioned here in recent days, equity investors have had an awesome time lately. Stocks have handed over double-digit returns in recent months and are ahead about 30% in the past year. Huge gains by tech and AI issues have been bolstered of late by a rotation into more traditional sectors, helped along by massive data centre spending. Oil has popped due to the Iran mess. Our banks have been shooting the lights out as usual. It’s ben a party on Wall and Bay.

But some people (actually, a lot of people) warn the stock market is not the economy. They’re right. It isn’t. The market can, however, be a barometer of economy activity. And it’s forward-looking, as investors are always more interested in what comes next than where we are. That’s how you make money – which is obviously easier if the American president tips you off.

A big problem here, as a result, is credibility.

Is the market rigged?

The answer is simple. No. ‘The market’ is actually a lot of markets – equities, bonds, commodities, futures, options, currencies and more – in a host of countries. The US stock market alone has a capitalization of $75 trillion. The bond market is close to $60 trillion. In other words these two markets alone are bigger than the economy of the entire world. Nobody, nothing, anywhere can manipulate this beast.

But that doesn’t mean it’s fair. Or democratic. Overwhelmingly it is the wealthy who have liquid, marketable assets while the less-wealthy obsess over illiquid real estate which usually has massive debt attached to it.

In the States, for example, 50% of the entire stock market’s capitalization is held by a scant 1% of the population (which includes a mess of billionaires). The top 10% of people (by wealth) own more than 85% of the market. And, sadly, the bottom 50% of people own less than 2%.

At the moment economies are struggling with inflation, lower GDP growth and a mounting burden of unrepayable public debt. Affordability is a major issue as wages struggle to keep pace with prices. And yet stock markets romp higher and those who own these assets see their portfolios and wealth ascending.

This is the K-shaped world we’re in. That’s an economy in which different groups recover from a crisis (like the pandemic) in radically different ways. The top part of the ‘K’ shoots higher based on invested wealth and market returns. The bottom part struggles with inflation, job loss, debt and declining real estate prices.

The bad news for the saggy part of the ‘K’ is that this will probably continue. Stock market advances are telling us that corporate profits are robust and likely to grow more (the current prediction is for a 50% earnings romp among S&P companies). Interest rates are unlikely to decline making real estate easier to carry or worth more. Wealth will continue to be concentrated where it has already settled.

The US is now focussed on supporting and promoting business investment, through tariffs, tax cuts and AI-friendly policies as well as massive government spending on defence and internal operations (like ballrooms and detention centres). In Canada the Carney government is intent on getting ‘major projects’ built and operating to lessen our dependence on the States while it also ramps up military budgets. All of this pretty much promises that billions and billions flying around will deliver even-higher market returns.

Those with market wealth will get more of it. Not fair. Reality.

Trump’s overt and undisguised insider trading criminality should tell you all you need to know about investing.

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Source: https://www.greaterfool.ca/2026/08/14/rigged-2/