I’m Naomi O’Leary, Europe Correspondent for The Irish Times based in Paris, filling in for Denis Staunton while he is away.
A small group of people are profiting from a constant stream of unpredictable announcements from the White House that cause market prices to move. For the rest of the world, the volatility is costly.
A suspicious pattern
On January 2nd, a user logged on to an online prediction market service and bet $32,500 that Venezuelan leader Nicolás Maduro would no longer be in office by the end of the month.
He would know: the user was Gannon Ken Van Dyke (38), a serving soldier and part of the team that was planning to carry out the raid that would capture Maduro in his Caracas compound just hours later, according to an indictment by the US department of justice.
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The bet won Van Dyke more than $400,000, according to the indictment. He was arrested last month, and has pleaded not guilty.
The case illustrates the risks of insider trading and conflict of interest in online betting markets that allow users to take punts on daily news developments and have boomed in popularity over the last year.
On Wednesday alone users of leading prediction market Polymarket traded €6 million in bets on how long it will take the US and Iran to reach a peace deal, and $2 million on the price of crude oil, according to its online tracker.
Media investigations have pointed to a pattern of unusual trading on futures markets and online betting services just before US president Donald Trump has made key announcements.
Very lucky, or very well-informed, users made windfall gains from betting on a series of key developments in the Iran war, from the timing of the first bombardment by Israel and the US to the assassination of Ayatollah Ali Khamenei.
The White House has rejected as “baseless” any implication that officials could be exploiting information. The administration reportedly sent out an internal warning to staff instructing them not to use insider information for prediction-market bets in March.
Where the Biden administration sought to crack down on such services, shutting down Polymarket in the US and forcing its relocation to Panama, the Trump White House has a warmer approach.
The president’s son Donald Trump jnr is an adviser to both Polymarket and rival start-up Kalshi, and his venture capital firm has invested in Polymarket.
The constant stream of announcements from the White House – deal, no deal; tariffs on, tariffs off – causes wild swings that are attractive to adventurous traders on traditional markets too.
But it’s a policy problem for governments around the world who are trying to deal with the economic fallout of the war.
“It is turbulent times. All these things are changing every hour,” Cypriot finance minister Makis Keravnos told reporters as he arrived at a meeting of EU finance ministers this week, brushing off questions about how long economic turbulence could last.
“It is not easy to make any projection, because everything is moving so fast.”
The 27 finance ministers were meeting after new economic data revealed an ominous combination of slow growth and accelerating inflation across the EU, driven by an 11 per cent jump in energy costs due to the Iran war.
Volatility was the theme of the day.
“I believe the main problem is the uncertainty caused by the very erratic US policy. It’s something new every day,” Austrian finance minister Markus Marterbauer told reporters.
“That’s the main problem: the uncertainty it creates, with negative economic consequences.”
One example of erratic policy is the Iran war itself, which was launched abruptly, without any warning to allies of the US or, apparently, much deep strategic forethought.
The forbearance of those who traditionally looked favourably towards Washington has been steadily eroded.
Swedish finance minister Elisabeth Svantesson said she had raised her displeasure with the Trump administration directly during a recent Washington visit.
The Iran war is shaping up to be a “long conflict”, she told reporters, irrespective of whatever the US may want.
“That comes with a cost for Sweden, Swedish citizens and all countries around the world, especially the poor ones,” she said.
“I told [treasury secretary] Scott Bessent exactly that when I met him in Washington because I’m quite tired of unpredictability that makes it difficult for all of us, and comes with a cost.”
Please let me know what you think and send me your comments, thoughts or suggestions for topics you would like to see covered to denis.globalbriefing@irishtimes.com
