In the paid version of Truth, Trump becomes a film villain. Brunello Rosa speaks

“The hope is that it will end up like in the film "Wall Street", when the young trader who grew up in the shadow of Gordon Gekko gets himself arrested and has the whole clique arrested for insider trading, corruption and I don’t know how many other financial offences, but we’re not at the cinema and I fear it will be very difficult to pin the sale of posts on Truth on Trump.” Brunello Rosa, an economist and co-founder, alongside Nouriel Roubini, of an international investment consultancy (based in London), comments as follows on the news of the lawsuit brought by two organisations against the sale of US President Donald Trump’s posts to stock market traders. “In the United States, companies are queuing up to sign up for the service without even knowing yet whether it is illegal or not. For seventy years, this country has sold us the illusion that, in the end, the good guys win and the bad guys go to prison. Today, however, America is a place where all market rules can be broken – in short, a place where you can cheat.”

Karoline Leavitt’s resignation as White House spokesperson is therefore not the only headache Trump will have to deal with in order to keep a tight rein on communications within an administration built in the image and likeness of Trump and the MAGA movement, which, according to Rosa, “remains impervious to allegations of illegality”. The facts are that two organisations – not even among the most prominent in the media world – the news outlet The Intercept and the non-profit organisation Freedom of the Press, have taken legal action against Trump over the new service on Truth – his personal social network – which allows subscribers to access his posts in advance for $100,000 a month. The lawsuit has been filed in a New York court and is based on the argument that this practice is “corrupt” as it grants privileged access to sensitive information that has a direct impact on the economy and financial markets.

“It’s as if, in a running race,” Rosa gives as an example, “one of the competitors were allowed to hear the starting gun in advance – even if only by a fraction of a second – giving them an advantage in the competition. Even in these sporting events, acoustic systems have been introduced to ensure that the starting gun is heard at exactly the same moment by all participants. In the world of investment, which relies on highly sophisticated technologies and where decisions are made at breakneck speed, giving certain traders information a thousandth of a second in advance is equivalent to giving them the chance to make billions of euros.” The White House defends itself by arguing that this case makes little sense because the information disseminated by Trump is already being distributed by many other platforms and press agencies, which offer paid services. “This strikes me as a very weak argument. These platforms disseminate information that is already public or about to be disclosed, capitalising on the speed of transmission. In the case of Truth, it is the US government itself that is providing the news, which stems from its own decisions. Unfortunately, however, under US law, criminal prosecution is not mandatory as it is in Italy; federal prosecutors report to the Department of Justice, where Todd Blanche – Trump’s trusted lawyer – has just been appointed.”

To put it simply, if, back in Nixon’s day, the Attorney General had been one of his lawyers, the Watergate scandal would never have happened. It is precisely films such as those starring Robert Redford and Dustin Hoffman, or “The Big Short”, which exposed the mechanisms behind the Lehman Brothers collapse, and the Madoff case – concerning the biggest financial fraud in history – as well as a whole host of TV series – from “Billions” to “House of Cards” – have shown the general public that the history of American finance has been littered with individuals prepared to flout regulations and the US Constitution to make money. “But if you were caught, you’d face twenty years in prison because all it took was to come under the scrutiny of a federal prosecutor or be reported to the SEC,” observes Rosa. “The point is that that world – where illegal acts took place but, if discovered, were prosecuted under the law – seems to no longer exist, or perhaps never existed at all. It is very sad for me to say these things. I belong to that generation of European economists who have always regarded statistical data and information from American sources as the ‘gold standard’, that is, the pinnacle of reliability. The risk now is that market operators will regard them on a par with those from emerging markets. And the incredible thing is that nobody seems to realise that this is an unprecedented blow to America’s reputation. It will take years, perhaps decades, to remedy this.” How will international investors react to all this? “Those responsible for allocating large amounts of capital do not have many alternatives. The US market remains the most attractive in terms of size, liquidity and diversification. Europe, which today outperforms it in terms of transparency and regulatory certainty, could represent a viable alternative for investors if only Eurobonds were available, but the use of this instrument is still very limited, which is a real shame. The only hope, in my view, does not lie in legal action – which is difficult to win with Trump having placed his people everywhere – but rather that, in the long term, investors’ confidence in US debt will be undermined by this behaviour and that the political class will receive signals strong enough to bring about a change of course. We have already seen some signs of this in the Treasury market.”