How the U.S. govt may be helping JPMorgan do insider trading

If the cliff the S&P 500 index and the world’s premier cryptocurrency, Bitcoin (BTC) fell off of in the immediate aftermath of the publishing of the latest inflation data on Wednesday, April 10, is an indication, having an early look at the numbers might be invaluable for any trader.

S&P 500 and BTC 5-day sharts showing contained but steep drops on April 10. Source: Google

As it turns out, there may be a select number of Wall Street firms – allegedly known as ‘Super Users’ – that are allowed a glimpse of the data ahead of the general public.

These firms include the banking giant JPMorgan (NYSE: JPM) and the asset-managing-behemoth BlackRock (NYSE: BLK), per a report from late April 9.

The bulk of the correspondence associated with the ‘Super Users’ mailing list and emanating from the Bureau of Labor Statistics (BLS) concerns CPI calculations – particularly those about housing and used car costs.

The mailing list, which the BLS clarified it does not officially maintain, is also reported to include many other prominent firms including the likes of Citadel and Brevan Howard (LON: BHMU).

Is insider trading becoming endemic within the U.S. government?

While not necessarily indicative of any insider trading and certainly not revealing much new about the special relationship between the government and systemically important companies – its nature has been generally understood since JPMorgan received the 5th biggest bailout to the tune of $25 billion in the aftermath of 2008 – the BLS mailing list again brings the matter of inequitable access to sensitive information into the light.

The matter, and the tendency for U.S. officials to apparently take a rather liberal approach whenever they gain access to lucrative and sensitive data ahead of the broader market has increasingly become a matter of public debate in recent years.

It is most evident in the many oddly-timed and highly successful trades made by elected officials – Nancy Pelosi being the most prominent one – which have seen them beat the overall market with returns several orders of magnitude larger than the benchmark indices.

While, again, it remains unclear and unconfirmed whether any of the frequently-cited trades constitute insider trading, many, including Jordan Belfort, the ‘Wolf of Wall Street’ himself apparently think it does.

Finally, the U.S. government’s decision to ban TikTok – the most popular social media platform in America by far – has also again put a spotlight on the worrying relationship between the country and some of its largest companies given that no similar decision was made pertaining to Meta (NASDAQ: META), despite Facebook’s abysmal track record with sensitive data.