Learn. Share. Evolve…

0:00:03 Support for the show comes from LPL Financial.
0:00:07 What if you could take that dream vacation or take that idea and go start that business?
0:00:10 What if you could grow your career or your company?
0:00:14 When it comes to your finances, your business, your future, LPL Financial believes the only
0:00:16 question should be, what if you could?
0:00:19 Visit LPL.com to learn more.
0:00:24 LPL Financial, member FINRA, SIPC, no strategy assures success or protects against loss.
0:00:27 Investing involves risk, including possible loss in principle.
0:00:36 It’s hockey season, and you can get anything you need delivered with Uber Eats.
0:00:38 Well, almost, almost anything.
0:00:41 So no, you can’t get a nice rink on Uber Eats.
0:00:44 But iced tea, ice cream, or just plain old ice?
0:00:46 Yes, we deliver those.
0:00:47 Goaltenders, no.
0:00:48 But chicken tenders, yes.
0:00:51 Because those are groceries, and we deliver those too.
0:00:55 Along with your favorite restaurant food, alcohol, and other everyday essentials.
0:00:56 Order Uber Eats now.
0:00:58 For alcohol, you must be legal drinking age.
0:00:59 Please enjoy responsibly.
0:01:01 Product availability varies by region.
0:01:02 See app for details.
0:01:06 When does fast grocery delivery through Instacart matter most?
0:01:10 When your famous grainy mustard potato salad isn’t so famous without the grainy mustard.
0:01:13 When the barbecue’s lit, but there’s nothing to grill.
0:01:17 When the in-laws decide that, actually, they will stay for dinner.
0:01:19 Instacart has all your groceries covered this summer.
0:01:23 So download the app and get delivery in as fast as 60 minutes.
0:01:27 Plus, enjoy $0 delivery fees on your first three orders.
0:01:29 Service fees exclusions and terms apply.
0:01:30 Instacart.
0:01:32 Groceries that over-deliver.
0:01:37 I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:41 I believe Trump’s economic team is stupid, but they can’t be this stupid.
0:01:47 I believe this is artificially constructed market volatility, such that he and his cronies can
0:01:52 engage in unprecedented market manipulation and insider trading.
0:02:07 In the war between Trump and Musk, I’m rooting for the bullets.
0:02:14 However, the whole thing is, again, a distraction from the significant damage being levied on the country.
0:02:20 It’s tempting to believe America will emerge from the Trump chaos unscathed.
0:02:21 It won’t.
0:02:31 The defining features of this presidency are cruelty and chaos, but chaos with a purpose.
0:02:38 Share prices plunge following tariff threats, only to rally when he backs down.
0:02:44 The White House attempts to bar Harvard from enrolling international students, then gets blocked
0:02:45 by the courts.
0:02:52 Trump calls for Fed Chairman Jerome Powell to be fired, then insists, days later, he has no
0:02:54 intention of terminating him.
0:03:01 Even if most of his promises go unfulfilled, the long-term damage will be severe.
0:03:12 If Trump were a poker player, he’d swagger to the table talking shit, go all in, then fold before his opponents respond.
0:03:14 It’s easy to dismiss this behavior.
0:03:19 It’s easy to dismiss this behavior as crazy or incompetent, but it raises a troubling question.
0:03:29 Is this a deliberate effort, straight out of an autocrat’s playbook, to create volatility that the autocrat and his acolytes can exploit?
0:03:44 Financial Times columnist Robert Armstrong coined the perfect term, the taco trade, Trump always chickens out.
0:03:49 But Armstrong told us on Prof G markets that chaos may be the point.
0:03:58 Trump and his team have such contempt for the system, they don’t see any downside risk in burning the village to save it.
0:04:06 These policy gyrations have created an association of toxic uncertainty with Brand USA.
0:04:14 Announcing more than 50 new or revised tariff policies in a matter of months makes no sense.
0:04:15 Until it does.
0:04:19 Trump’s market manipulation operates like a carnival game.
0:04:20 It’s rigged.
0:04:25 The house always wins, as it knows when the music is about to stop.
0:04:42 Trump’s ability to trigger wild swings in stock prices has created an environment ripe for insider trading, undermining trust in U.S. markets, and eroding a pillar of American prosperity, the rule of fair play.
0:04:55 When Trump shocks the market and then retreats, it gives his inner circle, both in Washington and on Wall Street, an opportunity to place trades with asymmetric upside.
0:05:03 They have information the other players, whether they’re buying or selling, don’t possess.
0:05:10 Trump’s tariff proclamations have created some of the most extreme market volatility in decades.
0:05:14 April 2 and 3, aka Liberation Day.
0:05:20 The markets posted their worst day since June 2020 during the COVID-19 pandemic.
0:05:24 The S&P 500 dropped 4.8 percent.
0:05:26 The Dow tumbled about 4 percent.
0:05:29 And the Nasdaq fell 6 percent.
0:05:38 Three days of losses wiped out about $10 trillion in wealth, equivalent to roughly 10 percent of global GDP.
0:05:42 April 9 and 10, Trump blinks.
0:05:49 In a stunning U-turn, the president walked back some tariffs, triggering a historic market rally.
0:06:02 The S&P soared 9.5 percent in one day, its biggest gain since 2008, while European markets staged their biggest jump in more than three years.
0:06:10 Multi-trillion-dollar swings happening within hours of his statements aren’t market forces.
0:06:14 They’re signs of manipulation with a presidential seal.
0:06:28 The markets are essentially reacting in real time to his policy announcements and reversals, creating unprecedented uncertainty for investors and opportunity for those who are inside.
0:06:38 A string of incredibly prescient trades has sparked concern that Trump’s allies may be trading on material, non-public information.
0:06:50 ProPublica reported that more than a dozen high-ranking officials made well-timed trades following Trump’s inauguration, most selling stock before markets tanked.
0:07:03 Attorney General Pam Bondi sold $1 million to $5 million in Trump media stock on April 2, the same day the president announced his Liberation Day tariffs.
0:07:09 The timing of her trades that day is unclear, but think about that.
0:07:18 The nation’s top cop is selling stocks the day an announcement by the president ignites a crash in prices.
0:07:24 Trump media slipped 13 percent in the following days before recovering.
0:07:37 Most damaging, on April 9, Trump posted a message to followers on Truth Social, quote,
0:07:44 This is a great time to buy, DJT, unquote.
0:07:51 Less than four hours later, he announced a tariff pause, sending stocks soaring.
0:08:02 Billionaires tracked by Bloomberg enjoyed their best day ever, adding more than $300 billion to their combined net worth.
0:08:12 Maxine Waters, the California Democrat, zeroed in on suspicious call option trading in the 10 minutes before Trump’s announcement.
0:08:23 She and her House colleagues wrote in an April 10 letter to Securities and Exchange Commission Chair Paul Atkins requesting an investigation, quote,
0:08:34 No rational investor would have purchased these options unless they had prior knowledge of the president’s impending reversal on tariff policy, unquote.
0:08:45 Less than two weeks later, Treasury Secretary Scott Besant, speaking at a closed-door investor summit hosted by J.P. Morgan Chase,
0:08:50 said he expected a de-escalation in Trump’s trade war with China.
0:08:56 Stocks, which had already started recovering after a sharp drop the previous day,
0:08:59 soared after Besant’s comments were reported.
0:09:03 Elizabeth Warren demanded an explanation.
0:09:10 The Massachusetts senator argued in a letter to Besant that Trump’s opaque tariff decisions and, quote,
0:09:14 frequent, seemingly random changes, of course,
0:09:20 have created a scenario where wealthy investors and well-connected corporations can get special treatment,
0:09:30 receiving inside information they can use to time the market or obtaining tariff exemptions that are worth billions of dollars,
0:09:38 while Main Street, small businesses, and America’s families are left to clean up the damage, unquote.
0:09:47 In late May, stocks dropped again after Trump threatened to raise tariffs to 50% on goods from the EU.
0:09:53 But when the president subsequently said those tariffs would be delayed until July,
0:09:58 his comments triggered a global rally over the next two days.
0:10:07 The White House has announced a flurry of new and revised tariff policies since Inauguration Day in January.
0:10:14 But I’m willing to bet that very little will change over the next year or two when it comes to trade policy.
0:10:18 I also predict that Trump will fail to follow through on most of his threats,
0:10:24 on everything from tariffs to Harvard, as he backpedals or gets stymied by the courts.
0:10:29 The country’s top securities cop will get to the bottom of it.
0:10:32 At least that’s how it’s supposed to work.
0:10:35 But at a time when suspicious trading activity is mounting,
0:10:38 the SEC is being defanged.
0:10:45 Trump earlier this year signed an executive order to rein in independent regulators,
0:10:50 including the SEC, and make them accountable to the administration.
0:10:56 The order forces the agency to report to the White House for approval.
0:11:02 At the same time, thanks to buyout and retirement programs offered by the administration,
0:11:06 the SEC workforce is being slashed.
0:11:13 SEC divisions reportedly lost up to 19% of their staff over a period of just several weeks.
0:11:16 The fox isn’t just in the henhouse.
0:11:18 Now he’s the farmer.
0:11:25 And don’t expect a strongly worded letter from Senators Chuck Schumer and Elizabeth Warren
0:11:27 to light a fire under Atkins,
0:11:31 the pro-business crypto enthusiast Trump picked to head the SEC.
0:11:38 You can bet Atkins will take a lighter regulatory approach than his predecessor, Gary Gensler.
0:11:43 Insider trading has long been a scourge.
0:11:50 James B. Stewart chronicled the 1980s insider trading scandals in his book Den of Thieves.
0:11:59 Sheila Kolatkar’s 2017 book Black Edge tells the story of billionaire hedge fund investor Stephen A. Cohen,
0:12:07 his former firm SAC Capital Advisors, and the largest insider trading investigation in history.
0:12:16 SAC pleaded guilty in 2013 to fraud charges and agreed to pay a record $1.2 billion penalty.
0:12:23 While Cohen wasn’t charged, he agreed to a two-year ban on managing outside money.
0:12:29 In 2014, his firm was reborn as .72.
0:12:33 Six years later, he bought the New York Mets.
0:12:40 But the conditions today threaten to usher in a golden age of insider trading,
0:12:43 inviting well-connected investors to cheat.
0:12:50 I predict that the next set of results from the nation’s hedge fund managers will show
0:12:52 that some of them have made a killing,
0:13:00 raising questions about whether they’ve capitalized on insider information to achieve those gains.
0:13:06 The collateral damage happens to the people on the other side of these trades.
0:13:09 They are losing fortunes.
0:13:12 As Pulitzer Prize winner Anne Applebaum argues,
0:13:15 American policy is, quote,
0:13:18 being transformed, not to benefit Americans,
0:13:22 but to benefit the president, his family, and his friends.
0:13:23 Unquote.
0:13:27 In our conversation last month,
0:13:33 she said that fighting corruption depends on connecting it to ordinary people’s lives,
0:13:34 showing, quote,
0:13:38 they are poor because the Trump family is rich.
0:13:39 Unquote.
0:13:42 She noted that Alexei Navalny,
0:13:45 the Russian opposition leader who stood up to Putin
0:13:48 and died in a remote prison above the Arctic Circle,
0:13:54 successfully linked Russia’s kleptocracy to bad roads and poor health care.
0:14:01 Ensuring America has a fair playing field is key to its success.
0:14:05 That’s why we have five times Europe’s risk capital for startups.
0:14:12 It’s why our companies garner $26 in value for every $1 in profit.
0:14:15 Russia is a kleptocracy.
0:14:20 The total value of its stock market is around $80 billion,
0:14:25 versus $52 trillion for the U.S.
0:14:30 The erosion of faith has disastrous consequences.
0:14:33 Corruption is contagious.
0:14:37 It starts with one infected trade,
0:14:39 spreads to cabinet members,
0:14:44 then metastasizes through Congress and the donor class.
0:14:48 America under Trump hasn’t just caught the disease.
0:14:53 It’s becoming a super spreader event that will infect global capitalism.
0:14:59 Mean Girls breaking up makes for good reality TV,
0:15:04 but it’s a misdirect from the grift that will reduce our prosperity
0:15:10 and limit our ability to protect others at home and abroad.
0:15:14 Life is so rich.
0:15:26 Life is so rich.